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Wednesday, 4 August 2004
Page: 25684

Senator JOHNSTON (5:50 PM) —Tonight I want to talk about the amendments which Labor has foreshadowed in order to pass the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004. Having dithered now for more than five months on this matter, Labor is engaged in a shameless face-saving charade with these so-called mooted amendments.

It is important to note that the Senate Standing Committee on Foreign Affairs, Defence and Trade considered the US free trade relationship and reported on it as long ago as November 2003. This report was titled The general agreement on trade in services and an Australia-US free trade agreement. There were a number of recommendations made then by that committee which are relevant to the debate attending the passage through the Senate of this free trade legislation—and I shall come back to those recommendations in a moment. So the broad concept of a bilateral trade agreement with the United States has been at large and on the political agenda for almost two years now. The legislation has been available for many months now and the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America has been taking submissions and publishing such submissions for some several months now.

Notwithstanding all this examination, debate and research, Labor has agonised with the decision. It is an opposition that has sought to shirk the issue, to postpone the dreaded day of arriving at a decision. This delay, this wishing and hoping that this issue would go away, has finally come to the day of judgment. Why has it sought, as an opposition, to avoid at every excuse or pretext this decision making day? The answers are these. Firstly, there is a deep and heartfelt loathing of all things American within the parliamentary Labor Party. This loathing finds its voice in the words of its leader and in the intractable attitude of its vitriolic Left faction. Secondly, a number of sensible, responsible members of Labor bring to caucus a reason and rationale which is undeniable in support of acceptance of this bilateral opportunity. The arguments and articulate persuasion of such people are irresistible within caucus but actually serve to underline and lay bare the poison towards and naked hatred of the United States by the Left within the Labor Party. An uncertain, dithering, shoot-from-the-hip leader has done everything he could to avoid collision between these two tribes. Thirdly, as a party which has always been hostage to small, often vested interest groups on the free trade agreement Labor has again been pulled and tugged from pillar to post by such self-interested groups, which it seeks to appease at any cost. Principally, the cost of such appeasement has been good government.

It is against this backdrop that Labor has finally conceded that the free trade agreement bills must be passed. But, as is to be expected with such a weak and vacuous approach to public policy, a face-saving device is sought by Labor. Such a device is necessary to hold aloft to the hardliners so as to be seen to appease those self-interested, but now disappointed, sectional interests. The government has expressed the view that if there is a capacity for such amendments to enhance or value add then it would give due consideration. The government's attitude is reasonable and accommodating, so I suspect the local content amendments would be passed. Senators should, however, be aware that—as is to be expected with any such face-saving device, such contrivance—these amendments actually add nothing to the legislation to enhance or protect Australian content.

I turn to the PBS amendments, as mooted. I have not seen the substance of these amendments. They are awaited with considerable interest, for reasons which will become apparent. Recommendation 13 of the Senate standing committee inquiry last year highlighted a determination to prevent any undermining of the PBS. That was way back in November 2003. I pause to bring to the Senate's attention what various informed and interested parties have said about the free trade agreement and its involvement and relationship with the PBS. Minister Mark Vaile said:

Let there be no misunderstanding on this point. The agreement I signed in Washington on 18 May this year—and the legislation I am introducing today—does not and will not have any detrimental effect on the PBS.

Health Minister Abbott said:

The architecture of the PBS remains completely unchanged ... prices to consumers won't change ... The Pharmaceutical Benefits Advisory Committee remains the gatekeeper to the system and cost-effectiveness remains the criteria under which drugs will be listed on the PBS ... none of that will change.

Journalist Jonathon Holmes on the Four Corners program said:

It's true that there's nothing in the Free Trade Agreement that will dramatically change the PBS tomorrow.

US Senator Jon Kyl said:

The one thing, of course, that they—

the representatives of the Australian government—

were very insistent on was that we not suggest any tampering with the pharmacy benefits scheme. And I think I knew better than to suggest that.

Importantly, Senator Conroy, the Labor Party shadow minister for trade, said at his press conference that after hearing all of the evidence the concerns he originally had had essentially disappeared, and he in fact gave the whole process a clean bill of health.

Lastly, I want to point to something that is important with respect to the position of this Labor opposition in the labour movement. The state premiers, who have retained the confidence of their electorates and who have in each case been re-elected, all want the bill passed, with no mention of the PBS and with no conditions—with no hooks on the wall. They are obviously earnest, professional, skilled legislators and governors, and they see no problems in the legislation. The real difference of course is that Mr Latham does not have the confidence of any electorate to this point in time.

Labor wants to impose some form of penalty regime, as I understand these amendments with respect to the PBS, to prevent the proprietors of patent rights extending the duration of their protection to the commercial detriment of cheaper generic drug producers. It may come as some surprise to members opposite that the general policy of patent and intellectual property legislation throughout the Western world is to reward and encourage inventors whilst at the same time not inhibiting improvements of existing technology by others. This is a crucially important, very sensitive and careful balance. What is apparently suggested by Labor is the quarantining, with a specific code of legislation, of intellectual property in the nature of patents insofar as they relate to pharmaceuticals only. This is in stark contrast to what is to happen to intellectual property at large.

This is a huge legislative task—one that came to life yesterday for the first time, following question time. We have had two years for the Labor Party to produce some semblance of an indication that they wanted to make these far-reaching and very complex changes to intellectual property legislation in Australia. This is, at first glance, a very complex task. More obviously, it is bad law and bad policy to be making it on the run in this fashion. Such amendments fail to understand the diverse factual and legal matrix which would present in each application and which would effectively require the legislation to pre-empt and usurp the role of the Australian judiciary on the adjudication of such intellectual property rights. Again, it is bad law and bad public policy.

I pause to point out that insofar as the United States practice of evergreening is concerned—that is, where the proprietary interest of a patent seeks to modify the intended purpose of that patent with some small or spurious change such that there is an extension of the protection of the patent—the laws of this country are very different. In our own country in this jurisdiction, we have seen nothing that resembles the practices which have prevailed in the United States.

I also point to the High Court decision in Aktiebolaget Hassle v. Alphapharm, decided on 12 December 2002. I refer to this case as one of the most recent which contains some relevance to disputation between generic producers and patent holders. I note that it was an appeal to the High Court from the Full Court of the Federal Court on appeal from orders made by the single judge at first instance. If nothing else, this case highlights how complex the law on this subject is and how easy it is for very distinguished jurists to fall into error.

Codification through ad hoc amendments, as is apparently proposed by the opposition in this instance, is utterly simplistic and plainly in ignorance. I further point out that no amount of legislation will prevent or restrain any person or corporation from issuing legal process or obtaining or seeking to obtain an injunction. I await the opposition's amendments with interest as it will, I suspect, in order to achieve its expressed purpose, of necessity attack and diminish rights to due process. That is the only way I can perceive there would be some capability yielded that would inhibit the necessary time frames for the judicial process to take its course. This is a very ad hoc and knee-jerk policy direction on the part of Labor, made on the run and without any real grasp of the practical requirements of the law to achieve the stated aims. The justification for such amendments is totally misconceived in the face of this legislation—and I pause to express my agreement with the very fine words expressed by Senator George Brandis here earlier this afternoon. This is nothing more or less than a face-saving device, a face-saving pretext.

In closing I say that such a face-saving device can never, ever be a justification for bad public policy or a flaky and wayward understanding of the law in Australia relating to intellectual property. Face-saving amendments such as are mooted by Labor will always be the resort of a confused, vacillating and timid leadership desperate to convince an electorate that the opposite is in fact the case. They fail. This is a confused, vacillating and timid opposition and the Australian people know it.