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Tuesday, 1 November 1983
Page: 2127


Dr THEOPHANOUS —I present the 206th report of the Joint Committee of Public Accounts, relating to Finance Minute on Report 182-Pharmaceutical Benefits Scheme-Chemists' Remuneration, and I ask leave of the House to make a short statement in connection with the report.

Leave granted.


DR THEOPHANOUS —The 206th report contains the Department of Finance minute on the Committee's 182nd report, which reviewed chemists' remuneration under the pharmaceutical benefits scheme. The Department of Finance Minute is the formal documentation of the Government's response to the Committee's recommendations as contained in the 182nd report which was tabled in the Parliament on 16 September 1980. In this inquiry the Committee examined and reported on the circumstances and reasons for a significant excess payment by the Department of Health to chemists in respect of their remuneration under the pharmaceutical benefits scheme between 1973 and 1980. The Committee also examined the concurrent excess payments made by the Department of Veterans' Affairs to chemists under the repatriation pharmaceutical benefits scheme. The combined total of overpayments was estimated at about $253m. Public hearings on this matter were held during June and July 1980. Witnesses who presented submissions included Commonwealth departments and organisations, the Joint Committee on Pharmaceutical Benefits Pricing Arrangements, pharmacy and pharmacists organisations, consumers, chemists and health economists. The Committee found no criminal, malicious or mischievous intent which would have led to the errors that occurred. The findings of the inquiry went beyond the immediate question of errors and excess payments. During the inquiry there emerged several fundamental problems which might directly contribute to the possibility of similar problems occurring in the near future. Besides affecting the pharmacy sector, a number of matters had broader implications for other sections of the health industry.

The principal areas covered by the PAC inquiry were the provision of independent economic advice to the Commonwealth Government on health matters, procedures for determining health fees and remuneration and the structure of the retail pharmacy industry. The PAC's major recommendations covered the following areas: Errors leading to overpayments; basis for remuneration of chemists; a bureau of health economics; and retail pharmacy in Australia. The Public Accounts Committee acknowledges the wide degree of acceptance of matters raised in the 182nd report. This response reflects the Committee's thorough investigation of the issues and the practical nature of its recommendations. The main policy revisions agreed to by Government, and stated in the Finance Minute, are as follows:

The Department of Health's standards of practice for automatic data processing analysis, design, programming, testing, implementation and documentation have been revised and as a result improved ADP standards have been incorporated into the Department of Health's ADP project manual, which has now been reissued; the Department of Health's ADP manpower resources have been strengthened with the creation of 29 additional positions in the ADP branch; a separate internal audit branch has been established in the Department of Health; legislation has been amended so as to establish the Pharmaceutical Benefits Remuneration Tribunal, consisting of three members including a Deputy President of the Australian Conciliation and Arbitration Commission-the Tribunal is currently conducting its fourth inquiry. A joint departmental liaison committee on repatriation pharmaceutical benefits has been established, with responsibility for providing formal communication and consultation between the Departments of Health and Veterans' Affairs. Although the delay in the finalisation of this response is regrettable, the Committee has been kept well informed of progress on the recommendations in the interim.

Mr Deputy Speaker, this 206th report of the Joint Committee of Public Accounts is but one of a continuing number of Committee reports whose purpose within the public sector is to improve accountability, upgrade standards, promote efficiency, assess cost effectiveness and report on the Committee's deliberations on each issue to both the Senate and the House of Representatives. The Committee therefore has a continuing and significant role within the life of the Parliament. I commend this report to the House.