Dr WOOLDRIDGE (Minister for Health and Family Services)(9.52 p.m.) —in reply—That was fun. It is nice to know there are still a few true believers around. Let me make a few broad comments, and then I will seek to answer some specific queries of the shadow minister, the member for Dobell (Mr Lee). I was interested by the comments of the member for Newcastle (Mr Allan Morris). It was great to know that towards the end of his speech he actually worked out that this was budget legislation. You bet it is, and I make no apology for it. It is budget legislation in an attempt to make the health system sustainable. The fact is that, unless the health system continues to evolve, it will not exist and you will have a crisis such as Canada, Germany and Holland are facing. They have to do drastic things. Unless you can meet the unsustainable growth in outlays that occur in a number of areas, you will find that eventually the crunch will come.

We have tried to avoid that. We have tried, with the pharmaceutical benefits system, to address an area that under the last four years of Labor doubled in cost. That is okay if you have a magic pudding, but eventually someone has to pay for it. We decided, this year, that rather than keep burdening debt on to future generations of Australians we would try to live within our means. I did not like having to do some of the things we did. The only thing I can think of that is worse is to leave Australia an unsustainable economic situation or leave Australia a health system that is not sustainable.

The deficit, I have to say, having sat on the Expenditure Review Committee, is very real. I do not know if the member for Newcastle made a slip of the tongue, but in one sentence he said that we fabricated the deficit and in the next sentence he said that the deficit was going to grow. I would have thought that was reasonably internally inconsistent. The fact is it is very real. In fact, it turned out to be more than $8 billion. When it came in at the end of the last financial year it was $10.5 billion, but we thought that rather than complicate the message we would leave it at the figure we were given on 12 March. The fact is that it turned out to be worse than we said on 12 March—not better.

It turned out that we had gone into the election with the now Leader of the Opposition (Mr Beazley) saying, `Look, everything is fine. The budget is going to be in surplus.' I have been round long enough to remember the Prime Minister before 1993 saying, `You don't have to worry about deficit. It is going to whirr back into surplus.' These things are not real; these things do not happen. You were living in a fantasy land. The fact is we fixed up your mess.

The really interesting thing to me is the result in Lindsay, because we suffered two months of your whingeing, your carping and your nitpicking. Just in case you did not get the message from the people of Lindsay, they dropped your primary vote by another five per cent. As long as you wish to keep carping, nitpicking and whingeing, I am delighted for you to do it because your primary vote will continue to go down and you will continue to be irrelevant.

I will address the specific issues of the National Health (Budget Measures) Amendment Bill first. The honourable shadow minister asked me two questions. The first question was: do countries provide reciprocal health benefit arrangements and is it going to apply to diplomats in Australia? We intend to apply this as broadly as we possibly can. It clearly will apply to any country with which we have a reciprocal health arrangement. For countries with which we do not have a reciprocal health arrangement, my understanding is at the moment it will apply to them, but we are trying to expand the number of countries with whom we have a reciprocal health arrangement because that is in both their interest and ours—particularly for Australians travelling overseas.

The second question the shadow minister asked me was: will you give an assurance that the bureaucratic requirements for pharmacies will be kept to a minimum? Yes, I will. We are having productive and fairly cooperative at this stage discussions with the Pharmacy Guild, and it is hardly our desire to put further work on them.

There are basically two issues in the bill that the opposition will be opposing. That is obviously their right, but let me just talk about them. The first is an increase in the co-payment. Again, this was done simply because of the rate of growth in the pharmaceutical benefits system, and it is pretty frightening. We are paying out about $2.6 billion in pharmaceutical benefits. That is substantially larger than the budget of the state of Tasmania. If not a single new drug comes onto the PBS in the next four years, it will go up 50 per cent in cost. Clearly there will be new drugs.

The best estimate, if we did nothing, is that in the next four years it will double in cost again, as has happened in the last four years. Unfortunately, $2.6 billion is real money. Unless we do something to address that rate of growth, it will simply gobble up every other area of my health budget, and that includes things like Aboriginal health, public health, diabetes and immunisation. In the end, a health budget is finite, and if you have a Medicare benefit system and a pharmaceutical benefits system that are out of control the capacity to do things in other areas is severely limited.

The average number of scripts that a concessional cardholder has is 17 a year. Therefore, the average number of scripts for people who are older concessional cardholders is 30 a year. I absolutely concede that the average concessional cardholder will be $8.50 a year worse off for that. For that extra $8.50 a year, they will get continuing access to the pharmaceutical benefits system, which is now vaguely under control in terms of cost. For the general cardholder, the average number of scripts is 1.6 a year. Going from $17.40 to $20, the average general PBS person who accesses it will be $4 a year worse off.

The second major issue here is that of rounding. Rounding was devised by the previous government at a time when inflation was higher. If inflation is high, rounding works reasonably well and you can afford to round down. We are in a time of low inflation, and we hope that will exist for a substantially long time. In a time of low inflation, rounding down means effectively the script stays where it is forever and the intent of the initial legislation is not met. We are not rounding up all the time. We are simply saying it should be rounded up or down to the nearest 10c.

I do not want to be too picky but the $6 per script that the previous speaker mentioned does not exist; the rounding to the nearest dollar does not exist, it is the nearest 10c; and it is not the case that the chronically ill are going to pay more when we are leaving the safety net where it is. All that will happen for the general concession is that they will reach the safety net sooner and pay the same amount of money for the entire year.

There were a couple of other comments that I should address. The member for Shortland (Mr Peter Morris) made much about destroying Medicare as we know it. I would put this in the same sort of category of bleating and nitpicking. People can say it for as long as they like. We have Labor health ministers on the record saying that, if Medicare does not evolve, it is going to die—and it will. Any health system has to evolve. It has to look at new and better ways of doing things.

I am absolutely unapologetic for trying to find a way to give some access to basic Medicare services for the large number of people in rural and remote Australia who have access to nothing whatsoever. That will occur by opening pharmacy agencies, which is going to be ecstatically popular. It will happen; it will happen before the next election; and it will certainly happen substantially by the end of this financial year.

The member said that we are going to close a third of Medicare agencies: yes, we are going to close some agencies. I have not made a final decision on the closure of a single agency yet. As to the fact that a union chooses to release a list—you can take that for what I think it is worth. In many cases—when Medicare opened and offices were located—we were in a period when bulk-billing was substantially less and the need for cash was substantially greater. Bulk-billing has increased dramatically in the last 12 years. Off the top of my head, for vocationally registered GP services, about 86 to 87 per cent of all services are bulk-billed; for non-vocationally registered GP services, about 92 per cent of all services are bulk-billed. The need that might have existed 12 years ago does not exist today.

What I can do is provide access to a basic service. Sure, it is not as good as a Medicare office, but it is better than nothing for the very large number of Australians in rural and remote Australia. I simply cannot provide Medicare offices in every location where people want them. As shadow minister I had an enormous number of people requesting, `Can I have a Medicare office here; can I have a Medicare office there'. I said no in virtually all cases. The simple thing is we will never fund it; we will never finance it. It is a different way of doing things. I think it is a substantially better way of doing things.

The member for Shortland said that pharmacies are extremely concerned. Maybe he talks to different people. As I said, I think he will find that pharmacies can benefit from this proposal, and the pharmacists I talk to are ecstatic at the prospect.

He did make one comment that I think is worth replying to seriously. He asked: what will happen in a town where there are five pharmacies, one pharmacy gets it and the others do not? That is a fair enough question. I do not want to incorporate something that becomes capitalised into the cost of a pharmacy and that gives one pharmacist a benefit over every other pharmacist.

What we are looking to do at this stage where a situation like that existed—it is subject to final negotiations with the Pharmacy Guild—is to choose one pharmacy on the basis of certain merit that will be open and easily contestable. That agency would be contested again every couple of years. So they would have to keep winning it on merit. We will provide certain benefits and certain moneys to the pharmacy for doing that. We will do it to that one pharmacy but, because it is openly contestable every couple of years, it will not get capitalised into the cost. We will let every other pharmacy in the town have access to the same thing, if they wish, at their cost. The benefit will be in terms of a Commonwealth payment, but we will not exclude other pharmacies in that town so that everyone will have access to it. I think it will work very well.

The member for Shortland made some comments about giving health to the states and how we will have eight to nine different health systems. If that is what he thinks, I have to wonder why the previous government attempted to do something on the whole COAG process for the past six years, because they did try and they failed. I might fail but I am certainly going to try. I am going to try because the benefits are very substantial.

If you had a look at the health care system in Australia today and you had to say that one thing was not working, it would be federal-state relations. The different jurisdiction between the Commonwealth and the states in health is leading to very poor outcomes for the public. I will give the House a couple of examples.

One example is in palliative care. Eighty per cent of people who are dying would like to die at home. It is cheap for people to die at home. People can die at home for an average cost of $50 a day. That involves backup, if they need it, of up to six hours individualised nursing care per person per day. These figures come from the Silver Chain Nursing Association in Western Australia. You might then ask: if people want to die at home and can die at home for a tenth of the cost of dying in a public hospital, why are a substantial number of people still dying in public hospitals? The simple reason is that the states pay for the public hospitals while the Commonwealth pays for home based care. The two have never been able to get together and agree on a way of doing something that will be of benefit to the public.

Another example is with nursing home care for people who have become frail and aged. While there are 75,000 people who are in nursing homes around Australia, there are another 75,000 people who are being looked after by friends and relatives. The crunch point for the family will be when the person becomes incontinent because then, all of a sudden, the care goes up fairly dramatically. The family will need to find another $2,500 to $3,000 a year for incontinence aids. I can offer that family a nursing home bed at $32,000 a year but I cannot offer the family $2,500 to $3,000 for incontinence aids to keep the person out of the nursing home and let them look after the relative at home. That shows the fundamental stupidity of our present system. We run the nursing homes; the states are responsible for appliances; but the two do not have the capacity to get together and talk about it.

When looking at the long-term future of hospitals, the trend right around the world is to attempt to put as much community based care as possible in place, because it is cheaper and it is what people want. For instance, there are seven health districts in Victoria. The southern health district has managed to get their hospital beds down to two per 1,000 of the population. That is still high by international standards, but it is the lowest in Victoria. They are still providing a good standard of care.

What is stopping them getting that figure down even further is that they cannot provide the home based care to back up what they need to do to further use their hospital beds in a sensible way. That would be okay if we had a magic pudding and did not have to worry about increased technology, an ageing population or any of those things. Unless we seriously try to sort out some of these stupid inequities, the health system will not evolve, it will be unsustainable and it will continue to not meet people's needs.

Mr Allan Morris —So why cut HACC then?

Dr WOOLDRIDGE —The honourable member interjects, `Why are you cutting HACC?' The fact is that HACC has six per cent real growth maintained in it. At a time of incredible budget stringency, we were able to increase the real growth in HACC by six per cent. Yes, we increase user pays, but up to the level that already exists in Victoria. The fact is that if you are a Victorian you will not pay a cent more. It is up to the levels that exist in Victoria already.

I can tell you as a local MP with a substantial aged population that in the four years that the Victorian government has been there I have not received a letter about the fact that Victoria has the highest HACC charges of anywhere in Australia. People are prepared to pay that. They think that they are getting good value. All we are doing is increasing it to the level of other states and maintaining six per cent real growth, which will be a substantial improvement.

The member for Newcastle made some comments on nursing homes that that will cost pensioners $100,000. For full pensioners it will cost nothing, but I could not have expected him to have read the budget documents. Unless your family can find the money, how are they to pay for this? If you are a full pensioner you pay nothing. What is going to happen to the 40 per cent of people who are in for less than six months? How is that going to operate? Very simply—they will pay nothing.

The fact is that we are copying the system you introduced for hostels. Today, hostels contain a substantial number of frail aged people in nursing home categories 4 and 5 and sometimes category 3. You were happy to introduce this yourself, and then you bleat when we take your system, introduce it in nursing homes and put very substantial safeguards in place.

You would have someone in a hostel who pays an entry contribution and then moves to a nursing home on the same site reimbursed their entry fee. How stupid is that. Can I tell you the effect of what you have done. I do not know whether those opposite have been in nursing homes recently, but they are, by and large, falling down.

Bob Gregory did a paper for you and showed that nursing homes around Australia under your scheme would need capital of $1 billion just to get them up to the standards required for basic safety. That was your program and your administration of nursing homes. Elderly people are in unsafe and unfit buildings. Have a look at your own record before you whinge and complain. You can whinge and complain as much as you like and you will in the end get the same result as you got in Lindsay.

The final issue I want to comment on is the removal of pharmaceutical benefits from non-residents of Australia. I am informed that not long ago the Customs Service looked at a charter flight going to an unnamed country. It checked the luggage of every person on this charter flight. Half of them were taking back hoarded pharmaceuticals, under the Australian pharmaceutical benefits system, either for resale in the country or for the benefit of their relatives. Are you seriously suggesting that that should continue?

Mr Allan Morris —Who pays the pharmacists?

Dr WOOLDRIDGE —If you want to whinge, offer something better. The fact is that that happened under your government. You put up with it and you chose to do nothing about it. I am trying to fix your mess and you can whinge as much as you like, but in the end the public knows that after 13 years a lot needs tidying up. I am prepared to do it.

   Question put:

   That the bill be now read a second time.