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Thursday, 12 August 2004
Page: 26301


Senator RIDGEWAY (11:32 AM) —On behalf of the Australian Democrats I want to outline our response to this issue. It is quite extraordinary that Senator Conroy could come in here and make such a pathetic argument for why the Labor Party have gone down the path they have. They have lost sight of the big picture on the free trade agreement, when in many respects it presented Australia with a unique opportunity to carve out those things that are relevant to the national interest, particularly social policy as it relates to the Pharmaceutical Benefits Scheme but also, just as importantly, on questions of cultural and environmental policy.

I heard the minister giving the government response to the opposition's amendments this morning and I agree with him in one sense. What he was saying was they are not needed in the first instance, because the free trade agreement is not really being altered to any great extent. So what we have got here is bodgie and dodgy getting together to give us a sweet FTA. The reality that Senator Conroy ought to understand is that all he has done is give us a sugar pill; it is a placebo. It does not give us any real answers for protecting the PBS in this country. If the Labor Party in opposition are serious about this then they should vote against the free trade agreement. They should have been seeking that the PBS be removed from the free trade agreement right from the very start.

From looking at the particular amendments that have been put forward, I think that Senator Conroy well understands that all he is seeking to do is affirm what already exists in Australian law. In particular, the first two amendments simply codify what is already dealt with and what is standard practice, as I understand it, in the Federal Court. I note that at the media launch Mr Latham and Senator Conroy said they were going to release some legal advice. I still have not seen the legal advice being tabled in public. I do not know whether it has been circulated in this chamber. The reality though is that it is quite easy to get any lawyer to give the client an opinion letter that suits the reasonable prospect of success—in other words, you can get what you want. But proving bad faith will require strong evidence, and well-advised clients will not leave any trail of bad faith. I would predict that no major pharmaceutical company will ever pay under this amendment, most of all because it does not achieve what Senator Conroy on behalf of the opposition says it will. It simply is not going to, and it is fanciful to suggest that the cost of medicines in this country will not increase.

The reality is that, in focusing on one or two things, they have lost sight of the bigger picture on the implications of the free trade agreement in respect of allowing US multinational pharmaceutical companies to be able to have a say in social policy in this country. The free trade agreement, through the various clauses that allow consultation processes to be triggered, allows the US government and more particularly US corporations to have a greater say in Australian policy. This is at the heart of the issue. These are the things the Labor Party ought to have been standing up for.

Senator Conroy trumpets the success of the opposition amendments that have been put forward. I think it is important to remind ourselves that Australia's Pharmaceutical Benefits Scheme is world's best practice. It is one that is the envy of many other countries who would like to replicate it. US pharmaceutical companies of course have attacked it consistently—especially their Australian subsidiaries—because it delivers some of the lowest patented drug prices in the developed world. This has been affirmed by the Productivity Commission, who say that the cost of our drugs is three to four times lower than drug prices in the United States. We do this through a system of pharmo-economic analysis and reference pricing that determines the benefits of new drugs and their national bargaining power. So it is not surprising that the pharmaceutical industry, both here and in the United States, has been calling for changes to the free trade agreement that would strengthen their capacity as part of their industry to increase drug prices themselves.

These are the things that need to be kept in mind. Why, under the free trade agreement, have we accepted another process of review for what is on the Pharmaceutical Benefits Scheme list? If we have a system that already works—and the government know that—why should we allow the Americans to have a second choice? Isn't that just a clause that would allow US corporations to put their foot in the door and force a deal on the question of higher priced drugs entering the Australian marketplace? Wouldn't it force drug prices up both for the PBS system and, inevitably, for Australian consumers?

Senator Conroy also spoke about the $10 million fines that the opposition are proposing. That is pretty laughable. Those fines are loose change when you consider the size of US pharmaceutical companies and the amount of money that is being spent in the United States. Those pharmaceutical companies represent the most profitable and influential industry in the United States—and they have been that way for the past 10 years. In 2003 and 2004 it was reported that the industry spent $US150 million to influence public policy. That is the trend for US pharmaceutical corporations. That is what they already do. Why do the opposition fancifully think that these corporations are all of a sudden going to change their ways and not try to influence health policy in this country?

There are 675 pharmaceutical lobbyists in Washington alone. They spend their time going in and out of congress trying to influence policy. In 1999-2000, during the US election cycle, the pharmaceutical industry spent $20 million on campaign contributions, of which $15 million was provided to the Republican Party. In October 2003 it was reported that President Bush told Prime Minister Howard that raising Australian prices for US pharmaceuticals was important to ensure that consumers in all countries—not just the United States—paid for the high research and development costs. This is telling about what the opposition have come to accept. There is an illusion that they are going to keep the cost of medicines down; the reality, of course, is otherwise.

It is also galling that during this debate we heard, one after the other, Labor Party senators come into the chamber to talk about how bad this deal is, yet today they arrive to sanction the enabling legislation for the free trade agreement. I remind the chamber again that the House of Representatives did not ever get to debate the free trade agreement or even the enabling legislation. The legislation was just passed through to the Senate. What did we get? We got the enabling legislation but we did not get to debate the free trade agreement because the guys over there in blue carpet land—the executive of government—decided what the free trade agreement would be. They signed off on it and sent us the enabling legislation—and we were expected to rubber stamp it.


Senator Boswell —You can vote against it.


Senator RIDGEWAY —Don't worry, we will be voting against it. Thank you for that interjection because it highlights the contradictions here. Senator Boswell ought to be defending the rights of the sugar industry instead of just paying them compensation. Labor senator after Labor senator came in here and talked about how bad this deal was. Senator O'Brien said:

... this government acted unilaterally and pursued a free trade deal which was more to do with politics than with free trade and with what we describe as an unrealistic negotiating time frame imposed on us by the US electoral cycle ...

Senator Conroy said:

Expert evidence from the departmental officials who negotiated this deal—some of them are in the chamber today—was quite clear: there was absolutely no imperative for this to be signed or rushed. It was quite clear. We could wait until 31 December to vote this bill into legislation and make a decision to support it.

That is laughable because yesterday we changed the hours and routine of business in order to facilitate an expeditious way of dealing with the enabling legislation. We got to the eleventh hour last night and the opposition were not even able to put forward their amendments that were on the running sheet. Why? Because they had not reached any agreement with the government—or, presumably, they were waiting for the sun to come up in Washington so that President Bush could say that it was okay. It is quite laughable to think about that because the Labor Party are talking about being able to wait until 31 December, and this agreement does not come into being until 1 January, so you have to wonder why it is being rushed and why the opposition would support that. Senator Kirk said:

But the facts of the matter are that this government has failed to negotiate the best deal possible for Australia and in a couple of areas there are serious flaws. The government no doubt could have achieved a better deal for Australia if it had pushed harder at the negotiating table, especially on behalf of our farmers.

I am sure that Senator Boswell would agree with that. Senator Kirk continued:

The government sold out many important Australian industries that were counting on the Prime Minister and his government to look after their interests. This free trade agreement has been incompetently negotiated.

That is pretty much at the heart of the matter. The Labor Party know that of the 42 grounds for qualification on the free trade agreement, they have chosen to make two amendments. They have neglected the other 40 and said, `When we're in government we'll look at those things.' As I said to Senator Conroy yesterday, `If you can look into that crystal ball, tell me what mechanism you are going to use in six months, eight months or a year's time when you are in office, to trigger a process to renegotiate the free trade agreement.' That is all rhetoric because the decisions—and the drawing of a line in the sand—have to be taken now. The opposition will not be able to renegotiate the free trade agreement. If they do renegotiate it they will just be dealing with some of the window dressing on the edges while the substance will remain the same.

People ought to be reminded that the free trade agreement effectively removes the parliament from being able to deal with social and public policy in this country particularly as it deals with health, the environment and culture. That is the reality and in effect it is done to the exclusion of the Australian people. In the case of the PBS we would have thought that the Australian public would have been permitted a greater say in what happened to the PBS. Instead, we have been given assurances from the government and have had to rely upon them. As for the opposition—if you can call them that—it would have been an opportunity for them to represent the interests of Australian people. That is what it comes down to.

We will not be supporting the amendments that are put forward by the Labor Party because the free trade agreement is fundamentally flawed. It is not a free trade agreement and I do not believe that anyone can say that it is a fair trade agreement. I note the flagging of amendments that are going to be put forward by the Greens. We certainly will not be supporting those either, because the reality is that no matter how much you tinker around the edges to try to even marginally move it ahead, those things in and of themselves, without looking at the bigger picture of the free trade agreement, will simply not fix the problem that the government have put before us and which the opposition are prepared to accept. Quite frankly, it is a shameful day when the opposition have been prepared to do this. I would hope that they are able to give some explanation on the issues that I have raised and how they see themselves distinguished from the government. All I see at the moment are smoke and mirrors in terms of what they are saying about the cost of medicines in this country not increasing. The cost of medicines will increase. Everyone knows that. Everyone out there has got that gut feeling; you can go with it yourself. Nothing is going to change as a result of these amendments.


The TEMPORARY CHAIRMAN (Senator Lightfoot)—Before I call Senator Boswell, I advise Senator Ridgeway that the memorandum of advice that he alluded to at the beginning of his contribution was tabled in the Senate on the evening of 9 August, last Monday, and can be found in the Journals of the Senate, No. 58, on page 3,850.


Senator Carr —Mr Temporary Chairman, I raise a point of order. I have been seeking the call for some time. It is quite apparent that you find it difficult to look to this side of the chamber. I suggest that it would be more appropriate if you were able to look to this side of the chamber. If the opposition has been discriminated against in this matter, can you give us an explanation?


The TEMPORARY CHAIRMAN —There is no discrimination, Senator Carr, and I am not disposed to accept that criticism. The rules of debate in the Senate are that the call goes from one side of the chamber to the other.