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Wednesday, 25 May 2005
Page: 166


Ms GILLARD (10:44 AM) —I foreshadow that it is my intention to move at the conclusion of my speech on the Health Legislation Amendment (Australian Community Pharmacy Authority) Bill 2005 a second reading amendment which deals with the current negotiations between the government and the Pharmacy Guild about the fourth pharmacy agreement and what appears to be the Howard government shaping up to break yet again an election promise. The Howard government once again is not being transparent about its dealings with others. The Howard government is failing to conduct investigations in a timely manner and walking both sides of the street in the course of these negotiations by saying diametrically opposed things on different days.

I should make it clear that we are supporting the bill before the House. The bill amends the National Health Act 1953 and currently provides for the establishment of the Australian Community Pharmacy Authority, known as the ACPA, whose role is to consider applications by pharmacists to supply PBS medicines and make recommendations as to their approval. In making its recommendations, the Australian Community Pharmacy Authority must comply with the pharmacy location rules, which are determined by the Minister for Health and Ageing in accordance with the act. The provisions for the pharmacy location rules, and indeed for the Australian Community Pharmacy Authority itself, will cease to operate after 30 June this year. Obviously that would be a matter of deep concern when there have been no new pharmacy location rules drafted to take the place of the current rules and where the work of the Australian Community Pharmacy Authority in reviewing those rules and making recommendations about new rules remains undone. Consequently, the government has rushed this bill into the parliament to amend the act so that the Australian Community Pharmacy Authority can continue to operate until 31 December.

A commitment made in the third community pharmacy agreement—that is, the agreement that the government has with pharmacists about the dispensing of PBS medications and the payments that flow in respect of that dispensation—is that the Pharmacy Guild of Australia, together with the government, undertake a joint review of the pharmacy location rules. Given that is an agreement of five years standing and there is a commitment in that agreement to have a review, you might wonder why it is that the government was not able to get the review completed in a timely way. That is just the Howard government when it comes to health. The Howard government will respond to a political crisis in health. For example, before the last election the government was suffering very badly in the eyes of the community because of its complete failure in health, its attempts to destroy Medicare and its pressure to ensure that bulk-billing rates collapsed. When the government needed to respond to those sorts of political pressures, then it did act. But, in all of the day-to-day things that really need to be done to make sure that our health system works and important impending issues are addressed, we know only too well that the minister for health never reacts. The time lines slip; things do not get done.

Like with many other government ministers, press releases might come and go but substantial outcomes are not achieved. This is another example of where that has happened. Despite a five-year agreement and a commitment to have a review flowing from that agreement, you cannot manage to get yourself organised to get that done in a timely way. So here we are before the House dealing with a desperate extension to give them another six months by extending the deadline from 30 June to 31 December 2005. We know that the review will take place during those six months, and the explanatory memorandum to this bill states that the extension will enable the government to consider the findings and recommendations of the joint review of pharmacy location rules.

I note that in fact the work of that group was leaked to newspapers recently, which again just goes to show a competency issue or perhaps something even more machiavellian about what is going on in relation to the review of pharmacy location rules, but as a matter of substance the job has not been done and consequently we have the extension being sought. I also note that the bill makes a technical amendment to the Health Legislation Amendment (Podiatric Surgery and Other Matters) Act 2004 to correct a misdescription. That act was enacted last year and enables private health insurance funds to cover hospital expenses for people receiving podiatric surgery.

Once again, people might wonder why the minister for health cannot bring a correct bill into the House. Clearly he cannot, so we are once again being forced to tidy up his errors, through this bill which includes that tidying up. Apart from the description of the bill and the work it is going to do in extending the time line for this review by six months, we need to examine the whole course of conduct by the Howard government of the negotiations with the Pharmacy Guild for the fourth pharmacy agreement. It is due to come into operation on 1 July this year, so we are in a phase when the third pharmacy agreement is winding down—it comes to an end on 30 June—and it is the obligation of the government to negotiate a new agreement with pharmacists to start on 1 July. If we look at the process that has gone into the negotiations on the fourth agreement, we see on display two very clear themes when it comes to the Howard government and health. One of these themes is that this government will say anything before an election and give any promise—indeed give any rock solid, ironclad guarantee it thinks will get it a vote—but then, after the election, what do we see? We see those promises smashed. That was true of the Medicare safety net. We had Minister Abbott’s famed rock solid, ironclad guarantee that the Medicare safety net would not be changed and we saw that undertaking smashed after the election and the minister’s credibility smashed as well. He has been exposed as someone who will say and do anything before an election to try to get a vote but will not honour his word after the election.

If only it was only the Medicare safety net, but it is not: it is a series of other things in health. Even today we are calling on the government to do the right thing and honour the commitment it gave before the election to put $30 million in new funding into the better outcomes for mental health program, which enables GPs to offer mental health assistance. It particularly provides assistance in rural and regional areas where often the only person who can offer any mental health assistance is the local GP because other health services are not available. We have heard the Minister for Agriculture, Fisheries and Forestry and the member for Riverina wax lyrical about their love of farmers in the context of the last bill. You would think that, if they really wanted to do something about this professed love of farmers at a time when farmers are under acute pressure because of the drought and when we know many are therefore struggling with mental illnesses including depression, this government would manage to honour its word and put an extra $30 million into the better outcomes for mental health program as promised. But of course it has not done that—the budget papers show that it is $18 million short of the commitment—and that is another example of Minister Abbott giving his word before an election but after the election his word smashed and his credibility trashed. That has happened in relation to better outcomes for mental health as well.

And it is well on its way to happening in the context of the pharmacy agreement. We know that before the election the Howard government, fearing the campaign power of community pharmacists—their ability to hand out leaflets, brochures and petitions in their locations in suburban shopping strips and regional towns and centres across the nation—was willing to issue any promise the Pharmacy Guild wanted as long as the Pharmacy Guild did not embark on a campaign against the government. So the Prime Minister, Mr Howard, wrote to every community pharmacist a letter full of reassurances, particularly those as to the status of community pharmacy, stating that it was not the government’s intention to have supermarkets compete with community pharmacists in the provision of PBS medication.

The government was prepared to issue a very big, glossy promise before the election in a nice letter on letterhead signed by the Prime Minister, but what has happened since? Interestingly, the government was still in reassure community pharmacists mode when the minister for health opened the Pharmacy Guild conference on 4 March this year. His address is reported in the Guild Gazette under the heading ‘Fourth Agreement concerns addressed’ with a very nice photograph of the minister. There we have the description—and these are the words of the newsletter—that the minister ‘gave a reassuring address’.

As late as 4 March this year, the minister was still, when it came to community pharmacists, in reassurance mode, in full bedside Tony mode—he was going to take their pulse, he was going to put a cold compress on their heads and he was going to make sure that they got every reassurance they wanted. Many people would think the minister being in bedside Tony mode might be an extract from a horror movie, but obviously it has reassured some and it was the minister’s purpose when he was at this conference to reassure the Pharmacy Guild. So, of course, the minister looking earnest, as he sometimes does, said things like, ‘Pharmacy is one of the great caring professions.’


Mr Neville —Well, it is, isn’t it?


Ms GILLARD —Exactly, and I hope, when the minister breaks his word to community pharmacists, you are not only saying that in the party room but saying it on the floor of the House of Representatives and surrounded by a battery of TV cameras. But we will wait and see where you are post the negotiation of the new agreement. The minister says, ‘Pharmacy is one of the great caring professions.’ This is the minister in reassuring mode:

Based on this standing and the profession’s commitment to public benefit and recognising the excellent relationship shared by the Guild and the Government, the Minister reiterated his intention to protect traditional community pharmacies.

He said while he had nothing against supermarkets like Woolworths and Coles, he saw an important distinction between general retailing and pharmacy.

Mr Abbott said: Community pharmacy has a well-established culture of professionalism, while the culture of Australia’s general retailers did not appear appropriate when dealing with potentially dangerous drugs.

Mr Deputy Speaker, to facilitate the working of the Main Committee I have been advised that it might be desirable to move my second reading amendment at this stage. It encapsulates a number of the things that I have been talking about. I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House condemns the Government for:

(1)   failure to conduct the negotiations over the Pharmacy Agreement in a timely fashion;

(2)   failure to provide transparency about these negotiations and the savings the Government is seeking to achieve;

(3)   ‘walking both sides of the street’ by commissioning reports that undermine current pharmacy arrangements and simultaneously rejecting the findings of these reports; and

(4)   getting ready to break the Prime Minister’s pre-election commitment to community pharmacy”.


The DEPUTY SPEAKER (Mr Wilkie)—It would be usual for this to happen at the end of the debate. Is the motion seconded?


Mr Danby —Most fervently. I second the motion and reserve my right to speak.


Ms GILLARD —Thank you for facilitating that, Mr Deputy Speaker. I do understand it was an unusual way to proceed. If I can continue to address the second reading amendment and of course the bill itself: on 4 March we have the minister in reassurance mode, but something very strange started to happen some time after 4 March. On 16 May the minister was still offering reassurances to people that he is absolutely convinced about community pharmacy. Running in the newspapers there has been a report dealing with the question of profitability of community pharmacy and, obviously, the minister is asked by members of the press to comment on that report. On 16 May under the heading ‘Govt ‘sceptical’ about supermarket pharmacies’ in an AAP report the minister is quoted as saying:

A confidential government analysis of the regulations—

that is, the regulations that prohibit the opening of a new pharmacy within 1.5 kilometres of another pharmacy—

leaked to a Sydney newspaper today, found pharmacies’ profits had doubled in the past 10 years but they had failed to pass on the benefits to customers.

Mr Abbott today stood by the government’s support for communitypharmacies, saying he was “sceptical” about an argument to open up pharmacies to greater competition.

“The government’s position is that we support community pharmacy, we are sceptical about some of the claims made for opening up pharmacies in supermarkets, and certainly we changed the location rules last year to specifically prevent new pharmacies co-locating with supermarkets,” he told reporters in Sydney.

“We are sceptical about pharmacies in supermarkets; we think there is a strong argument for having a different culture of retailing for potentially dangerous drugs than for general merchandise.”

So we had the minister in reassurance mode in March and on 16 May. Mr Deputy Speaker, you might be a person who can exercise his mind about this in a very intelligent way and come to a conclusion, but if a government report has contended that the profits of pharmacists have escalated in a major way that causes one to ask: who would have leaked that report to the newspapers? One suspects that, if it had been provided to the Pharmacy Guild, it is very unlikely to be the Pharmacy Guild that leaked it to the newspapers, because clearly they would not think that such a report being in the newspapers would be in their interest. It seems to me that if the government has the report and the pharmacists have the report, and it is adverse to the interests of pharmacists and ends up in the newspapers, then maybe by a set of logical deductions you might think that the government leaked this report. Even if the government did leak this report—and we are very short on alternative suspects—on 16 May the minister was still in reassurance mode and still loved community pharmacists.

The minister must have had a conversion on the road to Damascus between 16 and 17 May. Something clearly happened to him overnight, because on 17 May he was reported in the newspapers as saying a diametrically opposed thing. This time he was asked to comment on a report in the Daily Telegraph headed ‘Fatal chemist delay for vital medicines’. There was a suggestion from the Pharmacy Guild that if a new agreement were not properly concluded by 1 July, or if an agreement unfair to pharmacists were concluded by 1 July, it might have major implications for the timely supply of drugs to patients. The Pharmacy Guild is reported as making statements to that effect. Minister Abbott says:

I think the important thing is for them—

that is, the guild—

to focus on what they think is the most effective way of distributing that—

that is, drugs—

rather than trying to frighten the general public.

If chemists did not want to accept the pay deal, the Government could find others who were prepared to dispense subsidised prescription drugs.

But something a little bit odder happened in relation to all of this. It goes from odd to odder. We know that the supermarket chains are interested in having pharmacies within supermarkets and they are prosecuting their case to government that this would be an effective way of distributing medicines. You would expect that. It is part of our democratic process that businesses, community groups and others who think they have a case to make come to government and make a case.

In the course of prosecuting its case, Woolworths commissioned a report from ACIL Tasman—the consultancy group which models economic questions and which consults on economic questions. Woolworths commissioned this group to produce a report demonstrating the potential savings that could be made if PBS medicines were able to be dispensed from pharmacists within supermarkets. So they prepared a report. The report was then put into the public domain. A series of claims about potential savings were made in the report and, as you would expect, the Pharmacy Guild responded to those claims.

Interestingly, I have a letter from Roger Corbett, the Managing Director and Chief Executive Officer of Woolworths Ltd, in which he refers to the ACIL Tasman report and makes the following statement in relation to it:

The information in this report was prepared earlier this year at the request of the Federal Minister for Health & Ageing, Tony Abbott. It was presented to him one month ago to provide additional background during the Government’s negotiations for the Fourth Community Pharmacy Agreement. We subsequently provided copies at their request to certain other ... Government members.

Isn’t this all very interesting? It is reminding me a great deal of the Medicare safety net—the minister out there in full reassurance mode before the election and in full reassurance mode after the election. As late as 16 May, he was in full reassurance mode. Despite being in full reassurance mode, under the waterline, under the table, he was saying to the supermarkets: ‘Get me a report that shows the savings. If you could get that in, thanks.’ And they did. From 16 May to 17 May, it is a Saul on the road to Damascus conversion. He has gone to bed as Saul and woken up as Paul, and there he is in the newspaper with a diametrically opposed view to the one he gave 24 hours before about pharmacists in supermarkets. By 17 May, he was threatening the Pharmacy Guild and community pharmacists that he would find others to dispense PBS medication. And we know who those others are—they are the supermarkets.

So we are in a situation here where you have to ask yourself: ‘What is going on?’ There are a series of possible explanations. Explanation No. 1 is that the minister is doing what he has done so many times before in health—he is preparing to break a pre-election commitment. It might not have been described as ‘rock solid, ironclad’, but it was in a letter from the Prime Minister. He is preparing to break a pre-election commitment—explanation No. 1.

Explanation No. 2 is that the minister has no idea what he is doing from day to day. He is able to say within 24 or 48 hours two diametrically opposed things and not realise that he has said them. That is an explanation which has some attraction for me, but I think the ‘getting ready to break an election promise’ is probably a better explanation.

I think there is something behind the ‘getting ready to break an election promise’ explanation. Yet again, whilst we might be talking about health and, yet again, whilst we might be talking about something as important as the dispensing of vitally needed prescription medicines in a timely way to people in Australia, throughout this vast nation—which is of course a very difficult job; it is a different thing to be able to get your medication when you are living outside Oodnadatta from living in the CBD of Sydney; so we are dealing with the very important health issue here of getting access to medicines in a timely way—there is some evidence that, like a lot of other areas of health, it is actually not Minister Abbott who is pulling the strings.

Do I have evidence to suggest that on other major health issues it was not Minister Abbott who was in control? Well, I certainly think I do because during the election campaign the government announced PBS savings, a new measure in health, which clearly was not generated by the minister for health but was generated by Finance.

We know that with the breaking of the Medicare safety net commitment the minister for health was overwhelmed by Treasury and Finance. We know that where he has been directed to find cuts in other aspects of health, he has danced to the tune of Finance. I suspect that the story behind the story is that there is a big blue within government about the fourth community pharmacy agreement and there is pressure from the minister for finance, and possibly the Treasurer as well—because the Treasurer has a certain view about undercutting Minister Abbott’s credibility—to find major savings in the Pharmacy Guild agreement and to open the door to supermarkets if that can generate savings.

I think that is what is going on here. It would be very interesting to get a cogent explanation, if that is possible, from Minister Abbott about these things. My suspicions about who is in control were heightened when it came to my attention that at the last minute, on 4 May, the minister cancelled a meeting with the Pharmacy Guild.


Ms Hall —What date was that?


Ms GILLARD —That was on 4 May. The meeting was cancelled so late that the Pharmacy Guild representatives flew up for it and then turned around and got the next plane back. So if government ministers conduct themselves like that every day, showing that sort of arrogance and petulance towards busy people who are coming to see them, it is a revelation. And I thank the member opposite for the revelation that the Howard government seeks to treat people with that kind of contempt.

The other explanation of course is that Minister Abbott is not in control; he is getting his marching orders from elsewhere and he did not know what he was going to say to the Pharmacy Guild representatives on that date. He had no idea what version of the so-called truth he would use on that day and so to avoid the embarrassment of being in a meeting where he did not know whether he was Arthur or Martha, at the last minute he pulled the plug on the meeting. We might want an explanation from the minister for health about how all of that has happened, as well.

How does this all matter to Australians? It matters in the following ways. Australians have a right to expect that their national government deals with health policy issues in a competent and timely fashion. They have a right to expect that negotiations about something as important as the delivery of PBS drugs around Australia are conducted in a timely, courteous fashion and with transparency. None of those things is happening. They are entitled to know whether the Prime Minister and the minister for health have, yet again, said one thing before an election with a view to doing another thing after the election.

I understand only too well the issues about PBS sustainability and I understand the need to make savings on the PBS and in relation to the supply chain. I am certainly not saying to this parliament that the Pharmacy Guild should get everything that it asks for. Clearly, there should be tough negotiations conducted to ensure that medicines delivered through the supply chain end up in the hands of consumers at the best possible price—and at the best possible price to taxpayers as well, in terms of how the government subsidises them. But you do not conduct a rational set of negotiations like this. It is inherent in negotiations that your word is your bond and what you say is the truth. We cannot look at this set of negotiations and say that that is occurring.