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Thursday, 21 October 1999
Page: 12169


Ms MACKLIN (3:46 PM) —This opportunity for fraud by `cowboys', as the minister calls them, was created by this minister. The words he has just used in this censure motion hang him, and hang him again. The words he has just used were that `of course this was widely known'—this opportunity for people to take advantage of a budget decision was widely known. It certain ly was widely known, Minister—and radiologists, as a result of your ministerial incompetence, have driven a truck through it.

Let us just go right back to the start of this. The advice that the Minister for Health and Aged Care provided and tabled today as coming from the department was not the original advice by the department; it was not the original advice provided by the Australian Health Technology Advisory Council, the independent technical authority.

I read now from the `Proposal for the expansion of funding for magnetic resonance imaging services in Australia' dated 15 May 1998 from the Royal Australasian College of Radiologists. Under the heading `Managing Supply' it states:

While the RTAC report recognised the need for an expansion of publicly funded MRI services, RTAC also concluded that there is currently—

`currently'—this is back in December 1997—

an excess capacity in Australia, albeit with some geographic maldistribution of units.

That was the original advice of which this minister took no notice. It was the ignoring of this original advice that caused this complete policy failure and opened up the opportunity for a massive fraud on the Commonwealth. Why was this original advice ignored? Because the radiologists did not like it. They did not want the MRI rebates to be restricted to those MRIs that currently exist. That was not their idea of what would be a good extension of Medicare funding. They wanted many more machines to be brought on, even though there was no evidence whatsoever that any of those machines were necessary.

I say again: these problems have been caused by this minister's failure to follow the appropriate advice that was provided to him way back in December 1997. If the minister had followed that advice, we would not be in this huge mess, this scam would never have existed and none of the problems we are now debating would have taken place—absolutely none of them.

Then there is the risk and cost to the budget. The minister likes to suggest that no risk or cost to the budget has been created. He seems to have forgotten that earlier this week, I think it was, he came into the House of Representatives and presented evidence from the Health Insurance Commission to say that there were now 111 MRI machines in Australia. That is a doubling of, a 100 per cent increase on, what RTAC said was necessary. That is a major risk to the budget that has been created by this minister due to his own policy incompetence. Rather than worry about what the risk was to the federal budget, he wanted to make sure that the radiologists were kept happy.

In answer to the Leader of the Opposition's opening of today's censure motion, this minister stated that he has acted swiftly to get things under control. He has acted so swiftly to get things under control that we have ended up with a 100 per cent increase in MRI machines. He has acted so swiftly that we now have a major fraud being perpetrated on the Commonwealth.

He has not acted swiftly. In fact, what can be found through document after document is all the evidence of his incapacity to act, his slowness to act, even though he had been provided with advice. Very interestingly, this document—it has been in the public arena for some time—obviously had not been drawn to the minister's attention. That is a generous interpretation. Another interpretation is that this is a smoking gun; it shows that people knew and took advantage of information. This document was presented to the Senate Community Affairs Legislation Committee by the Department of Health and Aged Care; it was not presented directly from the Health Insurance Commission.

But the minister has presented us with the idea that, `Oh well, I don't know everything that the Health Insurance Commission says. That's not for me. I mustn't get involved; that would be inappropriate.' Minister, this went through your department. My recollection of the way these things work is that usually a minister's office would see each thing before it would go into the Hansard.

This document has been on the record since 22 July of this year. What was the answer to the question from Senator West, exactly the same question that I asked the minister today? She asked:

How many members of the RANZCR negotiating group did not have MRIs at the beginning of the consultation process but ordered them during it?

The answer was:

. . . the HIC has advised that four members of the RANZCR negotiating group (which includes the RANZCR negotiators as well as the additional attendees referred to in Question 35)—

a few more radiologists, that means, were in on the deal—

have applied to become an eligible provider on at least one MRI machine—

so four of them have at least one each—

where documentation—

this is a critical issue—

relating to this machine (this documentation being a signed contract, quotation given, or offer to purchase) was dated between 10 February 1998 and 12 May 1998—

the critical dates, the dates during which the department and the minister were negotiating the extension of Medicare rebates to MRI machines. Remember that the college had made it clear during their negotiations with the department that they did not like the department's original suggestion. They did not like AHTAC's suggestion that Medicare rebates be restricted to those machines currently in operation in both the public sector and the private sector, that that would have been enough to meet demand in Australia. They did not like that. They wanted things changed. They made it clear to the department that they wanted the extension of Medicare rebates to be made available to a lot more MRI machines and, of course, a few people went out and made some strategic investments.

We have four here, back in July. Remember when the opposition was talking about this? Even up until the end of last week, we thought there were only an extra 31 machines. We thought that was all there were. That is all we have been able to find as a result of an investigation. The minister comes in here and says, `Oh, no. It is not 31—you are very stupid, you lot on the opposition benches—it is 111 machines.' So we certainly do want to know how many of the negotiating team now have MRI machines, how many of them now have signed contracts, quotations given, offers to purchase, dated between 10 February and 12 May. And how many of them have already been cleared of backdating? How many times have we asked this question? We keep asking this minister the question about whether or not the 13 that have been cleared by the Health Insurance Commission fit into this category.

Of course, the minister does not want to answer that question, because this is where he is ultimately exposed. He is exposed on two counts: one is policy incompetence, because he failed to take the advice—the original advice, not the advice of 5 May, after the deal had been done; that was far too late. We know that the deal had been done and the department was doing the right thing by the minister, stitching up a deal. We want to look at the advice that was given early in the piece in December 1997, when the Australian Health Technology Advisory Council said there were enough machines. This minister ignored that advice and, as a result of that policy incompetence, we now have this fraud that has been perpetrated on the Commonwealth. That is the first reason why this minister must go.

The second reason—just as important—is, of course, the nature of the negotiations. We have heard the minister say how difficult it was, how hard it was, to keep these things secret. He had to talk to people who had MRI machines; that was the only way that it could be conducted. Nobody was asked for pecuniary interest declarations or asked to leave the room if they thought they might take advantage of the information that was debated in the negotiations; what the department finally provided the minister with on 5 May was a negotiated settlement that the radiologists themselves all knew about. So is it any surprise whatsoever that those radiologists who were in the negotiating group and the ones that they had talked to—let us not limit it to the people in the negotiating group; as the college itself makes clear, there was a necessity for them to talk to other radiologists—


Ms Ellis —The minister said that too.


Ms MACKLIN —That is exactly right. It was `widely known'—is that the term he used?—that he was going to go out and fund MRIs. As a result of that being widely known, as a result of this minister's being completely incompetent in making sure that this information was tightly kept, radiologists did go out and take advantage of that information. The minister keeps asking for evidence.


Mr Reith —That's the bit you have trouble with; isn't it?


Ms MACKLIN —All he needs to do is look at the evidence provided by the Health Insurance Commission.


Mr Reith —That's your problem.


Ms MACKLIN —I will just go back to it again, because the Leader of the House does not seem to have heard.

Honourable members interjecting


Mr SPEAKER —Order! The House will come to order! The member for Jagajaga—

Mr Griffin interjecting


Mr SPEAKER —The member for Bruce is out of his seat. The Leader of the House, this has been a very civilised debate, and it will continue that way.


Ms MACKLIN —The Leader of the House seems to have missed the point. The Health Insurance Commission advised back in July—some months ago—that there were four people involved in the negotiating team who had gone out and placed orders during the negotiating period. That is the evidence. The evidence is that they took advantage of information they had. They took advantage of the Commonwealth budget. They took advantage of the taxpayer, and they hoped to benefit.

The minister says, `That's terrible that they've done that. That's terrible.' It is a terrible thing. It is shocking. But why was it that they were allowed to do it? They were allowed to do it because of the nature of the negotiations that this minister allowed to be undertaken. That is why it happened and that is why this minister has to go. He has to go because of his policy incompetence, because of the nature of the negotiations and because he exposed the Commonwealth budget to a major fraud risk.

The greatest problem of all is that these people cannot be caught because of the way the minister went about his job. If these people got properly signed-up contracts before the budget, if it all has been done properly and they did not have to sign pecuniary interest forms and they did not have to declare any interest, what are you going to get them on? These are not backdated contracts, they are not shonky contracts, they are not `nudge, nudge, wink, wink' contracts; they are serious contracts that were signed. They were signed because these people had information that this minister allowed to get out because of his inability to set up a negotiation process that was tight enough to make sure that this fraud was not perpetrated on the Commonwealth. That is why this minister must go. We need a royal commission to make sure we finally get to the bottom of this mess, this mess that has appropriately been called the `scan scam'. It is a scan scam, using the minister's own words. It is a scam of massive proportions that will cost him his job. (Time expired)