Senator RIDGEWAY (2:27 PM) —My question is to Senator Hill, the Minister representing the Minister for Trade. Minister, why is the Pharmaceutical Benefits Scheme included in the free trade agreement with the United States when the government assured us it would not be on the table? Can the minister provide an ironclad guarantee that the changes to the PBS agreed under the US free trade agreement will not lead to higher medicine prices being paid by Australian taxpayers? Will the Minister for Trade resign if the prices do increase?

Senator HILL (Minister for Defence) —The PBS is very important to the government, as it is to all Australians. We said from the outset that there were certain areas that we would need to protect if we were to achieve the outcome of a free trade agreement with the United States. We of course wanted that objective because it opens up markets, it facilitates economic growth and it thus contributes to the creation of more Australian jobs, which we on this side of the chamber think is very important. We are very proud of our record in that regard. But we did say that there were a number of areas where we have to safeguard Australian interests for very important reasons. One was the PBS, in terms of the security that it provides to Australians on health matters. Another was the area of quarantine. For obvious reasons, it is very important that we protect Australia's quarantine system. A third reason, which I thought was very eloquently restated by my colleague Senator Kemp earlier today, was to look after Australian interests in broadcasting—the so-called cultural environment. So, yes, we did negotiate an agreement that did not threaten the PBS system, and we are quite confident of that outcome. I restated it in my second reading speech today in the chamber. Through the long and arduous considerations of these matters by two committees—the Joint Standing Committee on Treaties and the Senate committee—we remain as confident as ever that we have been able to properly protect the PBS system and Australian interests.

In relation to Minister Vaile, all I would want to say is that I think he has done an outstanding job in negotiating this agreement—an agreement that can contribute to significant economic growth in this country, an agreement that can continue the path of even lower unemployment in this country. I think that he is someone who ought to be congratulated by all sides in this chamber.

Senator RIDGEWAY —Mr President, I ask a supplementary question. I thank the minister for his answer. He did not answer the question in relation to the prices of medicines increasing. I wonder whether the minister is aware that Catholic Health Australia says that the FTA principles are too heavily weighted towards the objectives of manufacturers, with scant attention to the needs of consumers and Australia's general health benefits. Is he also aware that the Public Health Association says the FTA will undoubtedly undermine the effectiveness of the PBS and potentially lead to two to three times more for the price of medications? Further, is he aware that the New South Wales government has asked for the PBS to be removed entirely from the free trade agreement? Minister, how is it that so many well-informed Australians have got it so wrong, when the government seems to be saying otherwise?

Senator HILL (Minister for Defence) —In negotiating the agreement, it is clear that we did not get everything we want—you never do within a negotiation. What we got is an outcome that gives an opportunity for significant economic growth, that gives Australian business the incentive to grow into the largest economy in the world. We achieved it with a number of safeguards that we believe were in the interests of our country. One of those safeguards was protecting the PBS. We believe that we have achieved that goal. We have seen nothing through the parliamentary process that would suggest otherwise. Whilst I do not want to question the bona fides of the interest groups to which the honourable senator refers, it is possible for others to have differing opinions, but in this instance the government is very confident of its position.