Mr GRIFFIN (8:56 PM) —I could not let the contribution of my friend and colleague the member for Deakin go without a couple of brief reflections. Really, Clyde Cameron! Clyde Cameron is a great Labor figure from another generation and many years gone by. I would have to say that quoting Clyde is very much like quoting Billy Wentworth or, for that matter, Billy Hughes—for either side. Beyond that, however, I do not know that it is really a valid contribution in terms of the political circumstances we face as a country today or of this budget.

I would like to make a number of comments with respect to the appropriation bills, relating particularly to the health area and some aspects that have come to light since the budget. I will start off with the Pharmaceutical Industry Working Group, which was set up some 12 months ago by the government, with the agreement of industry, with the intention of improving dialogue and coordination between industry and government around the question of the pharmaceutical industry. It was a good idea—no doubt about it—and I certainly do not have a problem with the concept.

The first meeting of the group was on 23 June 1998. A press release issued jointly by the then industry minister, John Moore, and the then and current health minister, Dr Wooldridge, states:

"The Pharmaceutical Industry Working Group was established to consult on key issues facing Australias pharmaceutical industry," Mr Moore said. "The Government wants to work with the Industry to encourage more investment and growth in Australia.

"Our aim is to develop the right environment for companies to confidently invest in the discovery, development and manufacture of safe and cost-effective medicines, which in turn will improve the quality of life for all Australians.

"The Pharmaceutical Industry Working Group will help the Government deliver high-quality health care within budget, while maintaining a vigorous and innovative pharmaceutical industry. It will assist in developing a clear, positive policy framework to take the Australian pharmaceutical industry into the new millennium."

It is a good idea and something that we should all encourage and applaud. It comes after the current government gutted the Factor F scheme and replaced it with PIIP, which provides significantly less money and significantly—

Mr Sercombe —What, PIIP?

Mr GRIFFIN —Yes, PIIP. Don't ask! It provides essentially less money overall, which has certainly given industry the pip. That may well be a reason for the establishment of the Pharmaceutical Industry Working Group—which is sometimes known as PIWG or `PIG', I might say. When we look at the Pharmaceutical Industry Working Group, we find an interesting issue. Its first meeting was on 23 June 1998 and, guess what, its second meeting is due on 30 June 1999. Happy anniversary.

Here we have a consultative group, a body designed to improve coordination and dialogue between industry and government in a key industry, an industry that both ministers in their press release have applauded for its major role in the development of Australian industry into the new millennium, yet it has only just managed to meet once more, probably, before the new millennium. This was raised in the consideration of estimates on Monday, when Senator Conroy asked what was actually happening with the Pharmaceutical Industry Working Group.

In response to those questions, a number of points were made regarding the lack of meetings. There had been difficulties around the question of the election only eight or nine months ago now. They are very busy people in the pharmaceutical industry. There is no doubt about that. They are major companies and very large corporations. But it has been a long time. It was asserted in the context of those hearings of the estimates that through PIG, the Pharmaceutical Industry Working Group, there had been a report commissioned by the Australian Pharmaceutical Manufacturers Association, the APMA, with respect to the economic state and opportunities of the industry.

That is very interesting. I will just refer you to APMA's annual report last year, which said that they commissioned this report in May of 1998. As I hope honourable members will remember from my earlier contribution, the Pharmaceutical Industry Working Group was not established until 23 June 1998. So we had a situation where there was considerable confusion from both the minister and the relevant public servant over the question of what this group had done. In fact, upon discussion and reflection, it was discovered that not much had actually been done.

The minister suggested that this was not the role of the group. It was not a decision making body; it was a dialogue body. It was a body designed to improve an understanding. I am not quite sure how you develop and improve an understanding through silence, because that certainly appears to have been the government's role with respect to this industry in the context of this working group.

I think the Pharmaceutical Industry Working Group is a good idea. It is something that government ought to embrace, and I am sure the industry does embrace it, but I think that it takes more than embracing. It takes a situation of some communication. The fact that there is a meeting coming up on 30 June is a good thing and I applaud that. It is about six months too late. I think in the circumstances that is something that hopefully we will not see into the future, and we will see a situation where this group, which is supposed to meet twice a year, does meet twice a year, does consider some of these issues that are of importance to the industry and will consider these issues into the future, in order to ensure that the pharmaceutic al industry, which is a crucial industry for the nation, does get a fair go in government policy into the future.

I will turn to another issue which relates to the budget papers and the health budget in particular. It relates to the major proposed cut out of the budget in the health area, which is a component headlined `Quality initiatives for prescribing pharmaceuticals'. It is in Budget Paper No. 2. It relates to cuts over the next four years of prospective expenditure expected on the pharmaceutical benefits scheme in terms of medicines being prescribed. It tallies over each figure: for example, for 1999-2000, there is minus $28.3 million on the forward estimates; for 2000-2001, minus $38.9 million; for next year, minus $55.5 million and following on to minus $64.7 million.

If you add those figures up, you work out that you are talking about a cut over four years of about $187 million. That is very significant. There is no doubt that this is a difficult area for government in the context of the continually rising costs of pharmaceuticals. But $187 million is still a pretty significant cut in the estimates. I would refer people to the minister's media kit fax sheet 8, page 3, which talks about the fact that these savings are net of the incentive payments to doctors which will commence in 2000 and 2001. This is a program where it is proposed that incentives be given to doctors in order to improve prescribing practice and, in that way, decrease the cost to the budget of and the need for prescribing of pharmaceuticals. On the face of it, that is not a bad idea, but there are several issues here that need to be considered.

One is the fact that it suggests $187 million, but that is because, in the figures for those years, something like $78 million of proposed payments to doctors are not shown there. When you look at the actual figures, which were received from the department several days later upon questioning, there is a cut of about $259 million from the forward estimates in terms of PBS costs and some $78 million over that period back to doctors, with that increasing into the following year, and a situation where the figures that are in the budget are misleading.

As I understand it, it has been said elsewhere through estimates again that these sorts of figures were provided but were not included in the budget papers at the end of the day. That is a disappointing thing. Accrual budgeting is something that I support as a concept and as a practice to go forward into the future—as did my colleague the honourable member for Fairfax when we were together, and we are now again, on the Joint Committee of Public Accounts and Audit. We are both very supportive of the concept of accrual budgeting, as first commenced under the government that I was proud to be a member of and continued under this government. But, when we look at what was provided in some of the budget papers in the concept of forward estimates, there are some concerns that need to be looked at for the future. There ought to be a line item of some $78 million in the forward estimates around the question of payments going to GPs. When there is not, there ought to be a proper figure around the question of the expected cut to PBS costs of some nearly $260 million. It is not there, and that is not a good thing in terms of clarity and certainty around what the budget actually contains.

On from that—and why I say that this is an issue which needs to be looked at very carefully—the whole issue of the question of prescribing processes and behaviour of GPs is a difficult one. We would all agree that, where we can, we should be trying to ensure that people are given the medicine they require and the medicine that will do the best for them in the context of their particular illness, but it ought to be medically related in terms of the choice.

The concern here—and I am not saying that this is what will happen—as to what could happen is that, if you have an incentive scheme which is designed to ensure that doctors both improve medical prescribing and at the same time save the budget money by prescribing less, there is a danger around what that will mean with regard to prescribing behaviour. Will it become budget related because there are incentives there? This is certainly a concern that the AMA have about how this scheme may work, and they have put that out in press releases. They are concerned that an incentive program, as proposed, of which we have no detail as yet, could in fact lead us to a situation which is really quite dangerous in terms of prescribing practices in this country.

The detail—rather, the devil in the detail—is still unknown. Upon questioning, the situation with respect to the department is that we cannot really ascertain too much detail. It is a projected figure that has been worked out through a range of formulas in the context of the budget process, which provides them with a base on which to suggest this is what they suspect the saving could be in a scheme they would implement. However, they really cannot give us any details at all about that scheme. In fact, they did agree two days after the budget to provide to the opposition details of formulas, and have since reneged on that proposal on the basis of budget confidentiality.

The fact is that, until those details are available, there will be a lot of questions raised about the nature of how such an incentive system would work and what it means in terms of GP practice. For example, how are these incentives going to be paid? Are they going to be paid to individual GPs? Will there be some overall organisational approach, or regional approach? Is it going to be in a situation of looking at the previous practice of prescribing and whether there are cuts in the levels of prescribing from particular doctors or particular groups of doctors? How are they are going to safeguard a situation where it is not seen as being a cash incentive scheme where a GP can look at it and say, `I will not prescribe because I can get the money back from the government in the context of this.' That is certainly not what I would expect from GPs; I have a lot of respect for GPs. But the fact is that, once you have an incentive scheme which is economically based, you have real dangers around the question of what would be the clinical outcomes. Hopefully, the government have that concern, but I am concerned that at the moment we are expected to just trust them and wait and see when it comes to detail.

We have asked a range of questions through estimates to try and get some of those answers and find out what is really being proposed in this cut. But certainly there are issues there. There is the question of its presentation within the budget papers and what that shows about this sort of issue and this sort of change in the process of the operation of the PBS. There are also the questions of what it means for GPs, and what the clinical outcomes will be for their patients.

I would like to briefly talk about the situation with the goods and services tax, the deal that has been done between the Democrats and the coalition on pharmaceuticals and the current state of play. The current state of play is, to an extent, characterised by confusion. There is a good deal of confusion in this area as to the end result. A number of different peak organisations have raised with me the question of the treatment of their particular products in this agreement. They say that their attempts to get clarification from government, from the Democrats and from the relevant ministers in this area have been very difficult and, in fact, most frustrating. To give you an example of the sorts of concerns in this area I will quote from an article that was in the Herald Sun recently and which said:

Up to 2500 chemists will have to spend $25,000 on computerised point-of-sale systems to help administer the GST.

Most of these are small businesses in rural areas or owned by the elderly.

The Pharmacy Guild of Australia said the Democrats had "stuffed up" a chance for tax reform.

The guild's Victorian rural liaison officer, Bruce Robertson, said supermarket owners had to deal with food on two levels—with a GST or without.

But pharmacists had a three-tiered problem.

He said products, such as prescribed medicines, would be delivered to chemists GST-free and be sold over the counter GST-free. In other cases, the wholesaler would apply a GST on products, including cold tablets, then the chemists would sell them without a GST.

Thirdly, products such as perfumes would have a GST on them before arriving and when leaving the pharmacy.

"It's going to cause a lot of trouble and cost a lot of money," Mr Robertson, a Wangaratta chemist owner, said.

The fact is there is a great deal of concern. There is an argument developing around this issue, and included in the argument are the questions of the actual clinical value of a medical good, the therapeutic value of particular goods and their treatment with respect to a goods and services tax.

The proposal from large components of the complementary health care industry related to the treatment of all products that are registered under the ARTG—the Australian Register of Therapeutic Goods. It recommended that they be treated as GST free because there was a recognition through that listing that there was some therapeutic value in what they do. However, I might add that that was also the position that was embraced by the Democrats as being a proposal that they saw as being of merit. They moved amendments to that effect within the Senate in the earlier consideration of the new tax system bills. However, the circumstances of the deal that has been done between the Democrats and the government are that they have chucked that out of the window. They have made an extension in relation to schedule 2 goods but they have not considered a range of other goods. They have created a situation where there is even greater confusion about what is covered and what is not.

There are examples, and they have been raised in the parliament and outside the parliament—things such as Strepsils. Most Strepsils are subject to a GST, but Strepsils Plus are not. Mr Deputy Speaker Adams probably needs Strepsils in this weather we are having in Canberra at the moment, and certainly I had one just yesterday. But I advise the Deputy Speaker that he should attempt to get Strepsils Plus if he wants to ensure that the product that he purchases and uses is not GSTed. There are other products such as Mylanta, that absolutely does have a therapeutic value, which will be GSTed. There are a range of products that have very similar activities; one happens to be schedule 2, others are not. In fact, some are GSTed and some are not.

It does not make a lot of sense in terms of therapeutic value or health value. Basically, it is more a question of the arrangements being made to get a deal. We have a situation where the Democrats have backtracked on what they saw as being a major consideration in their earlier amendments. But I guess it is a bit like books: only a couple of days ago there were Democrats who said they read books; now they do not seem to read that much. They do not see the need for a situation where those things are covered.

What I would say is that, when we look at the question of the GST with respect to health care and a range of other areas, there are inconsistencies and there is confusion from within the government about what is affected and what is not. There are also concerns about consistency in terms of policy in this area. There is still a lot of detail that needs to come out. But the concern I have, and I know others have, is that that detail is not there now and that it does not seem that either party really understands the nature of the issues they are dealing with in this area.

We could go to the question of recipes for bread, or salads, or soups, or a whole range of other goods. But the fact is that this whole process has been messy and is starting to unravel to a degree which should be of great concern to the government. I note the members for Wannon and Eden-Monaro are here. Although I am sure the member for Wannon will return at the next election, the member for Eden-Monaro ought to have real concerns about this issue in terms of how it plays out at the next election. Although that is some time to come, there are issues there for the government to have real concerns about. (Time expired)