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Monday, 11 November 2002
Page: 5934

Senator KEMP (Victoria—Minister for the Arts and Sport) (4.21 p.m.)—I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—


The Taxation Laws Amendment Bill (No 5) 2002 will amend various income tax laws to make the following amendments:

There will be a special transitional measure to address the concerns of oyster farmers who use the traditional stick farming method of capturing oyster spat about the difficulties for them in complying with the trading stock rules.

The transitional rule will assist the oyster farmers by attributing a value for the oyster trading stock of these farmers at the start of the 2001-2002 income year, based on a value per stick multiplied by the number of sticks used to capture the oyster spat. The stick method of calculating the value of trading stock allows oyster farmers to avoid excessive compliance costs.

Schedule 2 of the bill will remove the potential for double taxation where amounts are paid for work in progress.

Work in progress will be partially completed work that has not yet reached a stage where a recoverable debt has arisen in respect of the work. It commonly arises in the context of a change in the composition of a professional partnership, for example accountants or lawyers, but the measure is not limited to a particular industry or particular types of entities. Work in progress will not include partially completed goods or partially completed structures.

In the case, for example, of a partner leaving a partnership, a payment for work in progress will be deductible for the remaining partners, and receipt of an amount for work in progress will be assessable income for the departing partner. When the work is completed and invoiced or paid for, the amount invoiced or paid will naturally be income of the partnership.

Schedule 3 contains technical corrections and amendments to the Capital Allowances system to ensure it operates as intended and interacts appropriately with related provisions. In particular, there will be fine tuning of the provision governing the deductibility of blackhole expenditure to ensure it operates as the Government intended.

Finally, Schedule 4 of the bill will make technical amendments to enable the Commissioner to recover all PAYG withholding amounts by making an estimate of the outstanding liability. In addition, it will allow taxpayers to have the estimate of the withholding amount reduced or revoked by giving the Commissioner a statutory declaration. The amendments will apply to amounts due and payable in the financial year ending 30 June 2002 and in subsequent years.



This bill contains a number of amendments to the Health Insurance Act 1973.

Professional Services Review

The main amendments relate to the Professional Services Review Scheme which commenced in 1994.

The Scheme is a process for reviewing and investigating the provision of services by a person to determine whether the person has engaged in inappropriate practice in the rendering or initiating of Medicare services or in prescribing under the Pharmaceutical Benefits Scheme.

The essence of the Scheme is one of peer review to ensure that the technical and professional issues of providing services are appropriately considered in the review process.

The amendments proposed to the Scheme in this bill need to be considered in the context of changes in the Scheme's operation since its inception. The PSR Scheme was substantially amended by the Health Insurance Amendment (Professional Services Review Act 1999) following a detailed review conducted by the Department of Health and Aged Care, the Australian Medical Association, the Director of Professional Services Review and the Health Insurance Commission. The changes implemented following the review were endorsed by all the parties.

Subsequently, a decision of the Federal Court has suggested that the amendments made in 1999 may not have the effect intended by the Review Committee. The proposed amendments clarify the intended operation of the Scheme, consistent with the recommendations of the Review Committee, and address certain issues identified by the Federal Court. Again, wide consultation has been undertaken with all stakeholders who support the provisions in the bill.

The bill clarifies the three operational stages of the review process. The Health Insurance Commission requests the Director of Professional Services Review to review a practitioner's provision of services. Following the review, the Director may decide to take no further action, enter into an agreement with the practitioner or refer the provision of identified services (the referred services) to a Professional Services Review Committee for investigation. It is during the PSR Committee investigation that the conduct in connection with the provision of the referred services by the person under review is examined.

The amendments in this bill make it clear that the Director's review is limited to the services specified in the request, but is otherwise not limited in any way by the initial Health Insurance Commission request. Where the Director has made a referral to a PSR Committee, that investigation is restricted to the services referred to them by the Director, but is not limited by either the initial Health Insurance Commission request or the reasons contained in the Director's referral. In other words, both the Director and the Committee can identify additional conduct arising from the provision of the referred services that may constitute inappropriate practice.

Normal procedural fairness safeguards apply throughout the PSR process, and have been further strengthened by this bill. The services to be investigated are clearly identified in advance, so the practitioner knows where the investigation will focus.

But it is only when a PSR Committee, the practitioner's peers, are able to examine individual services, including interviewing the practitioner and hearing their explanations or reasons for engaging in a particular course, that it is possible to properly assess the appropriateness of their conduct.

The bill provides that before a PSR Committee makes a finding of inappropriate practice, the person under review must be notified of the intention to deliver such a finding and the Committee's reasons for doing so. The person under review must be provided with an opportunity to respond to the proposed Committee finding and the reasons. Further, the person under review is able to make submissions to the Determining Authority before the draft determination stage.

The proposed amendments also validate the investigative and adjudicative referrals which are currently before PSR Committees to the extent that those referrals specify the conduct to be examined and do not involve examination of conduct at large.

Members will be aware that Medicare is one of the largest programs administered by the Federal Government. This investment needs to be protected particularly in regard to accountability, the public interest and the standard of health care attracting Medicare and Pharmaceutical benefits. Providing this protection is the principal objective of the Professional Services Review Scheme and I thank all parties for their continued support of the Scheme.

Cleft Lip and Cleft Palate Scheme

The bill also proposes changes to the Cleft Lip and Cleft Palate Scheme.

The proposed changes will enable eligible persons requiring ongoing treatment for cleft lip and cleft palate conditions to claim Medicare benefits under the Cleft Lip and Cleft Palate Scheme until their 28th birthday. Under the current arrangements, in order to be eligible for Medicare for cleft lip and cleft palate treatment, a patient must be a person who has not attained the age of 22 years.

The current age limit was established on the basis that cleft lip and cleft palate patients would generally have completed most specialist dental work associated with their condition once their facial growth was complete.

However, the age limit of 22 years has created some difficulties, as some patients require ongoing treatment beyond their 22nd birthday as their facial growth continues, or where scheduled surgery had not been possible until after attaining 22 years of age.

The Department of Health and Ageing has advised that only a small number of existing patients would require continuing care beyond that which is now provided and so this measure will have a minimal impact on Medicare outlays.

Miscellaneous/Technical corrections

The bill also contains minor technical amendments to remove redundant definitions in section 3 of the Act relating to health care cards and pensioner concession cards.

Debate (on motion by Senator Crossin) adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.