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Thursday, 24 March 2011
Page: 2020

Senator JACINTA COLLINS (Parliamentary Secretary for School Education and Workplace Relations) (10:01 PM) —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—

Broadcasting Legislation Amendment (Digital Dividend and Other Measures) Bill 2011

The Broadcasting Legislation Amendment (Digital Dividend and Other Measures) Bill 2011 introduces amendments to the Broadcasting Services Act 1992, the Radiocommunications Act 1992, the Australian Communications and Media Authority Act 2005 and the Copyright Act 1968. These amendments introduce measures to effectively implement a reorganisation of digital television channels to realise the digital dividend, and to improve the regulatory framework for free-to-air digital television services provided on the VAST satellite service and the switchover to digital-only television.

On 24 June 2010, the Government announced that 126 Megahertz of broadcasting spectrum would be released as a digital dividend. The digital dividend will be released as a contiguous block of spectrum in the upper ultra-high frequency, or UHF band, in the frequency range 694 to 820 Megahertz inclusive.

This spectrum will become available as a result of the switch to digital-only television and the release of spectrum currently used for analog television. Digital switchover will be completed in Australia by 31 December 2013.

UHF spectrum currently used for broadcasting services is highly valued for delivering wireless communications services, including super-fast mobile broadband.  The Government aims to auction the digital dividend spectrum in the second half of 2012, allowing successful bidders ample time to plan and deploy the next generation networks that are likely to use the spectrum.

In order to release this highly valued spectrum, broadcasting services will need to be relocated out of the identified digital dividend spectrum and organised more efficiently within the remaining broadcasting spectrum. This process is known as ‘restacking’.

On 9 July 2010, the Minister for Broadband, Communi-cations and the Digital Economy made the Australian Communications and Media Authority (Realising the Digital Dividend) Direction 2010. The purpose of the Direction was to provide the Australian Communications and Media Authority (ACMA) with policy guidance on the Australian Government’s digital dividend objectives.

To assist the ACMA to plan and implement the restack of broadcasting services as efficiently as possible, the Government proposes amendments to the Broadcasting Services Act and the Radiocommunications Act to modify the existing planning process for television broadcasting services.  The amendments will provide the ACMA with greater regulatory flexibility during the restack process and also enhance the ACMA’s enforcement powers in relation to television broadcasting planning.

The ACMA will also be given the power to make new planning instruments, called Television Licence Area Plans, for television broadcasting services. During the restack process, the flexible planning powers in these new instruments will allow the ACMA to plan a sequential restack timetable in a licence area. They will also allow temporary digital simulcasts, which may be necessary in metropolitan and larger population centres where a significant number of television antennas may need to be reconfigured over a period of time.

There will be a legislated deadline of 31 December 2014, to be known as the ‘designated restack day’, for restack to be implemented in a licence area. This is one year after the completion of digital television switchover nationally. Provision will be made for the Minister to extend the designated restack day in a particular licence area beyond 31 December 2014, but only where this is necessary for unavoidable technical or engineering reasons.

From the date of the commencement of these amendments and until the designated restack day, the amount of consultation the ACMA has to undertake in respect of television broadcasting services will be reduced. This will allow the ACMA to focus its consultations on the criteria relevant to the restack and with those stakeholders directly affected by it. After the restack is complete, the broad planning and consultation requirements that apply in relation to all other services operating in the broadcasting services bands would apply again to the planning of television services.

The amendments would also give the Minister the power to direct the ACMA by legislative instrument about the exercise of its powers to make or vary a Television Licence Area Plan. This power would enable the Minister to give further policy direction and clarification to the ACMA in relation to restack, if required. This specific Directions’ power will cease to have effect on the designated restack day for a licence area.

The Bill also introduces a number of amendments to the legislative framework for the new VAST satellite services licensed under section 38C of the Broadcasting Services Act.

Proposed amendments to the conditional access scheme governing access to the VAST service in remote Western Australia will mean that viewers who reside in the larger television markets can only apply to access the VAST service if their reception of local terrestrial commercial digital television services, once provided, is inadequate. This provides the remote commercial broadcasters in Western Australia with the opportunity to rollout their terrestrial digital television infrastructure and means that viewers in these areas would not need to purchase satellite reception equipment unnecessarily. But at the same time, the VAST service remains available for people in digital television blackspots, ensuring they are able to receive the full suite of digital television channels.

The Bill also inserts provisions for determining whether digital terrestrial television services in a particular area of Australia are deficient.  The ACMA will be able to declare an area ‘service deficient’ if, after a specified time after switchover, the number of terrestrial commercial digital television services, including digital multi-channels, is less than those required to be provided on the VAST service. Viewers in declared service-deficient areas will then be able to access the VAST service to receive the full suite of digital television channels if they choose to do so.

The Bill would also introduce measures to make sure that viewers who have already purchased and installed satellite reception equipment and legitimately obtained access to the VAST service in a particular location because of digital television signal deficiency cannot subsequently lose that access at a later date if terrestrial digital television reception is extended to their location. The Bill also introduces other minor amendments intended to improve the ACMA’s oversight and administration of the conditional access scheme.

The Bill makes a minor amendment to the Copyright Act to clarify that, where a section 38C licensee re-transmits a broadcasting service other than the services the licensee is required to provide, that re-transmission would be subject to the general broadcast re-transmission provisions of Part VC of the Copyright Act.

The Bill makes a number of minor amendments in relation to the provision of digital television services and the digital switchover process.

These new measures include assisting remote commercial broadcasters to provide the full range of free-to-air digital television services, including digital multi-channels such as GO!, GEM, 7TWO, 7MATE, ONE and ELEVEN.

In recognition of the significant costs of terrestrial transmission in remote markets, the new measures are intended to allow remote broadcasters to provide all of their digital multi-channels in standard definition before the end of switchover, although they may still elect to provide high definition services.  After digital switchover, commercial television broadcasters in these markets, like all other commercial television broadcasters, will have the option of providing any combination of standard and high definition channels within their allocated spectrum.

There may be circumstances where it is not feasible for some broadcaster transmission sites to be converted to digital. This will especially be the case where sites only serve very small communities or do not, or will not, transmit all of the commercial and national broadcasters’ services in digital. The Bill proposes amendments to the Broadcasting Services Act under which commercial or national broadcasters may apply to the Minister for Broadband, Communications and the Digital Economy for exemption from converting these transmission sites to digital. Before granting the exemption, the Minister would consult with the ACMA and would need to be satisfied that viewers currently served by these analog transmission sites would have access to alternative digital television options, such as the VAST satellite service. Broadcasters would not be permitted to make an application in relation to digital terrestrial services that have already commenced transmission.

In addition to these exemption provisions, the Bill inserts new criteria the Minister must consider when deciding to approve or reject an implementation plan to establish a new digital television service, when a plan is submitted by a national broadcaster. The Minister would be required to consider whether there are other means by which people in the area can view an adequate and extensive range of national broadcasting services, including by satellite, and whether other broadcasters operating in the area have or will be converting their terrestrial services to digital.

The Government notes the recommendation from Senator Ludlum in the Senate Committee report on the provisions of the Bill that the Government should conduct a review of the impact of switchover on regional and remote communities two years after passage of this legislation.  The Government believes this idea has merit, and will conduct such a review following the switch off of analog television in remote Australia at the end of 2013.

The Bill would make amendments to address regulatory issues that may arise where, for broadcast planning or other technical reasons, specific analog transmitters may need to be switched off earlier than the switchover date in a licence area. The current power that enables the Minister to determine digital-only local market areas does not have the flexibility to allow a commercial or national broadcaster to stop analog transmissions in small geographical areas without technically breaching its digital conversion obligations under the Broadcasting Services Act.

The Bill would repeal provisions in the Broadcasting Services Act and the Radiocommunications Act that require the commercial television conversion scheme to deal with the regulation of digital transmissions by commercial television broadcasting licensees from former analog self-help re-transmission sites. The issuing of licences for the transmission of digital services from former analog self-help re-transmission sites can be achieved through other regulatory mechanisms available to the ACMA, making these provisions redundant. 

Finally, the amendments in the Bill would address an inconsistency between the Radiocommunications Act and the Broadcasting Services Act in relation to licences for the transmission of commercial and national television broadcasting services after the end of the simulcast period in a licence area.

The amendments to the broadcasting legislation introduced by this Bill will progress the Government’s digital television switchover program and the restack of digital television channels to realise the digital dividend.

The amendments will give further scope for the roll-out of all digital television multi-channels services to all Australians - bringing truly equal television services to viewers in regional and remote areas for the first time - and will give the ACMA the tools necessary to successfully plan and implement the digital channel restack in cooperation with the broadcasting industry.

Customs Amendment (Serious Drugs Detection) Bill 2011

This Bill will allow Customs and Border Protection to conduct a twelve month trial of x-ray scan technology.  The equipment will be licensed for the internal search of a person suspected on reasonable grounds to be internally concealing a suspicious substance.

Currently, an internal x-ray scan of a person can only be carried out by a medical practitioner at a place specified in regulations, for example a hospital or surgery.   

The Bill will allow, with the consent of the detainee, an initial non-medical internal x-ray scan of a person to be carried out by Customs and Border Protection officers using new body scan technology that produces a computer image of a person’s internal cavities within a skeletal structure.  Where the body scan image supports a suspicion of internal concealment, the existing regime governing an internal search by a medical practitioner will then apply. 

The use, by consent, of body scan technology as an initial non-medical internal scan will reduce the number of people referred to hospital for an internal search thereby reducing the impact on the resources of the Australian Federal Police, hospital emergency units and Customs and Border Protection.  In the 2009/10 financial year there were 205 detainees referred to the AFP to be taken to hospital for an internal search, of which 48 were confirmed to be internally concealing an illicit substance.

The Bill will extend the existing safety and training safeguards applying to the conduct of an external search of a detainee using prescribed equipment to the use of body scan equipment to carry out a non-medical internal scan. 

The Office of the Australian Information Commissioner has provided input to the privacy impact assessment and all comments have been incorporated.  The Office of International Law in the Attorney-General’s Department has advised that the amendments would not breach the right to privacy as set out in the International Covenant on Civil and Political Rights or the Convention on the Rights of the Child.

The Privacy and FOI Policy Branch of the Department of Prime Minister and Cabinet and the Office of the Australian Information Commissioner will be consulted prior to the prescription of body scan technology.

Electronic Transactions Amendment Bill 2011

The Electronic Transactions Amendment Bill 2011 will update the Electronic Transactions Act 1999 to reflect internationally recognised standards on e-commerce and bring Australia’s electronic transactions legislation into the 21st century.

The Bill contains minor amendments addressing the challenges of existing, new and emerging technologies in e-commerce.  These amendments are an important step in ensuring Australia’s legal regime is up to date to support and promote firms and business operating in the digital economy.

The Bill will provide increased legal certainty in trade by electronic means, and encourage further growth of electronic contracting both domestically and internationally.

The amendments align Australia’s legislation with the UN Convention on the Use of Electronic Communications in International Contracts adopted by the General Assembly in 2005.  The Convention was developed by the United Nations Commission on International Trade Law and is the first UN Convention addressing legal issues arising from the digital economy. 

Accession to the Convention requires amendments to the domestic electronic transactions regime.  Each Australian jurisdiction has implemented legislation based on the Model Law on Electronic Commerce 1996, also developed by the United Nations Commission on International Trade Law.  The Convention updates the Model Law based on a better understanding of the use of electronic communications since the Model Law was finalised. 

Following support during public consultation for Australia’s accession to the Convention, the Bill was drafted by the Parliamentary Counsels’ Committee and approved by the Standing Committee of Attorneys-General in May 2010.  NSW and Tasmania have already passed the amendments and I understand that the remaining jurisdictions intend to introduce the provisions within the first half of 2011.

Implementation of the Convention will facilitate international trade by offering practical solutions for issues arising from the use of electronic communications in the formation or performance of contracts between parties located in different countries.  It aims to commercial predictability when using electronic communications in international contracts, but does not otherwise purport to vary or create contract law. 

Accession to the Convention will also improve the efficiency of commercial activities and promote economic development both domestically and internationally. 

Eighteen countries have signed the Convention, including significant trading partners such as the Republic of Korea and Singapore.

Key amendments of the Bill include:

  • clarifying uncertainties in using electronic communications in the formation and performance of contracts
  • clarifying that a contract can still be legally effective despite being formed by an automated message systems
  • refining default rules for determining whether the method used for an electronic signature is reliable
  • providing default rules to ascertain the place of business of the parties to a transaction, taking into account modern business practices such as the use of automated message systems.  Importantly, this will assist parties to determine the jurisdiction in which the contract was formed.


The Bill modernises the law to reflect developments in technology and align the Commonwealth legislation with internationally recognised standards on e-commerce.

While the amendments do not significantly change the Commonwealth’s law, they provide a more certain legal environment to meet the needs of present day business practices in the digital environment. 

I would like to thank the Parliamentary Counsels’ Committee for the significant time and effort that went into preparing this Bill.  I would also like to thank the individuals and organisations who participated in the consultation process.

Military Rehabilitation and Compensation Amendment (MRCA Supplement) Bill 2011

I am pleased to present legislation that will make a number of minor changes to the Military Rehabilitation and Compensation Act.

The changes will clarify the eligibility criteria for MRCA supplement to ensure that members, former members and their dependants continue to receive their correct entitlements.

The MRCA supplement was introduced as part of the Secure and Sustainable Pension Reform package on 20 September 2009 as a result of the consolidation of a number of different allowances across portfolios into a new supplement regime.

Prior to the introduction of MRCA supplement, pharmaceutical allowance was paid under the Military Rehabilitation and Compensation Act as a separate ongoing entitlement to the wholly dependent partner of a deceased member or former member.

Since 20 September 2009, the provisions relating to the payment of the former pharmaceutical allowance component of the MRCA supplement have not adequately dealt with certain wholly dependent partners.

Amendments in the Bill will make it clear that the wholly dependent partner of a deceased member who died before 20 September 2009, is entitled to the former pharmaceutical allowance component of the MRCA supplement where the wholly dependent partner has chosen the lump sum payment option.

The other amendments in the Bill will ensure that the MRCA supplement multiple entitlement exclusion provisions in the Military Rehabilitation and Compensation Act operate as intended.

These provisions operate to prevent dual entitlement to payments under the Veterans’ Entitlements Act, the Social Security Act and the Military Rehabilitation and Compensation Act that are the equivalent of the MRCA supplement.

Amendments in this Bill will ensure that persons eligible for MRCA supplement under the Military Rehabilitation and Compensation Act may not receive additional equivalent payments under the Veterans’ Entitlements Act or the Social Security Act.

The Bill demonstrates the Government’s commitment to continually review, update and refine our operations to provide the optimum level of services and support to our current and former military personnel and their dependants.

Remuneration and Other Legislation Amendment Bill 2011

Mr President, the problems with the current parliamentary entitlements framework have been clearly documented.

The Australian National Audit Office in its 2009-10 report, Administration of Parliamentarians’ Entitlements by the Department of Finance and Deregulation noted that the entitlements framework is “difficult to understand and manage for both Parliamentarians and Finance”.

The Report of the committee for the Review of Parliamentary Entitlements, known as the Belcher Review, established in response to the ANAO’s report, similarly noted that the “existing arrangements are an extraordinarily complex plethora of entitlements containing myriad ambiguities”.

The Department of Finance and Deregulation recently engaged Ms Helen Williams AO, a former secretary of a number of Commonwealth Departments, and former Public Service Commissioner, to review the administration of entitlements by the Ministerial and Parliamentary Services Division of the Department of Finance and Deregulation.

Ms Williams reported to the Department in February 2011. Her review found that greater client focus and more effective administration by the Department would be facilitated by a clearer and more integrated entitlements framework.

The administration, clarification and streamlining of parliamentary entitlements is an ongoing task that occupies a substantial part of my working life in this place, and I will continue to seek to improve - and make more transparent - both the framework and service delivery in this area.

It is important work, because it is critical to the enabling of members and senators - how we do our work representing our constituents in our system of representative democracy.

Parliamentarians that are supported by an effective, efficient and transparent system of remuneration and entitlements will do their jobs better. I am pleased today to announce an important initiative in the reform of the framework.

The bill I am introducing today will restore the power of the Remuneration Tribunal to determine the base salary of parliamentarians.

It will also allow the Tribunal to determine the remuneration and other terms and conditions of Departmental Secretaries and the remuneration and recreation leave entitlements of other offices established under the Public Service Act 1999.

In restoring the Tribunal’s power to determine the base salary of parliamentarians, the Bill will implement the cornerstone recommendation in the report of the Committee for the Review of Parliamentary Entitlements.

The independent review committee was chaired by Ms Barbara Belcher AM, and comprised the current President of the Remuneration Tribunal, Mr John Conde AO, the current Dean of the Australia and New Zealand School of Government and former Commissioner of the Australian Competition and Consumer Commission, Professor Allan Fels AO, and Deputy Secretary of the Department of Finance and Deregulation, Ms Jan Mason. I thank them for their work.

The Committee made a range of recommendations around parliamentary entitlements. The Government has agreed to the cornerstone recommendation of the Review. This Bill implements this recommendation and by doing so will provide more transparency and - importantly - independence in the determination of parliamentarians’ base salary.

I now table a copy of the Committee’s report for the information of members, and the public. As I have indicated, the Government has agreed to the first recommendation of the report and is implementing it in this bill. I trust that the release of the report will be an important contribution to the broader task of reform of parliamentary entitlements.

Parliamentarians have been remunerated for their service to the Commonwealth Parliament since Federation. Pay was initially set by the Constitution and then by the Parliament itself, under the auspices of the Constitution.

With the enactment of the Remuneration Tribunal Act in 1973, the Remuneration Tribunal became responsible for setting parliamentarians’ base salary. However, the Tribunal’s authority to determine parliamentarians’ base salary was removed by the Remuneration and Allowances Act 1990.

The Bill restores the Remuneration Tribunal’s role of conclusively determining parliamentary base salary. This change will enable parliamentary base salary to be determined in its own right, rather than the current arrangement where it is set by reference to a figure determined for another purpose, and a matter for decision by the government of the day.

The current situation has resulted in outcomes on parliamentarian’s salaries being determined by political considerations, to the detriment of considered and informed decision-making on appropriate remuneration.

Mr President, the Government notes that Remuneration Tribunal determinations on parliamentarians’ remuneration were disallowed or varied by legislation in 1975, 1979, 1981, 1982, 1986 and 1990, prior to the passage of the Remuneration and Allowances Act 1990. Since this enactment, parliamentary base salaries have been determined by the executive arm of government.

The pre-1990 situation - where determinations were subject to regular disallowance - was also unsatisfactory. It was also inconsistent with the independent nature of the Tribunal.

Accordingly, the Government has decided that - in addition to the restoration of the Remuneration Tribunal’s power to determine parliamentarian’s base salaries - the Tribunal’s determinations of parliamentary remuneration will, in future, not be disallowable.

This will reinforce the independence of the Tribunal and ensure the integrity of the scheme for determining the remuneration of parliamentarians by removing - to the greatest extent possible - opportunities for intervention in the implementation of the Tribunal’s determinations by the beneficiaries of those determinations.

The Remuneration Tribunal will continue to determine the additional salaries of parliamentary office holders, such as the President of the Senate and the Speaker of the House of Representatives, and provide advice to the Government on the additional salaries of Ministers.

To ensure openness and transparency of the Remuneration Tribunal’s decision making, the Tribunal will be required to make its decisions public and publish reasons for them.

Mr President, the Bill also contains amendments to the Remuneration Tribunal Act 1973 - and consequential amendments to the Public Service Act 1999 - to make the Remuneration Tribunal responsible for determining a classification structure for Departmental Secretaries and related matters, which may include pay points and guidelines on the operation of the structure.

Those amendments implement the Government’s 2007 election commitment to make the Remuneration Tribunal responsible for determining the remuneration of Departmental Secretaries and other public office holders under the Public Service Act 1999.

The Remuneration Tribunal will also be responsible for determining the classification to which each office of Departmental Secretary will be assigned and for determining the full range of Departmental Secretaries’ terms and conditions.

The Remuneration Tribunal would determine the amount of remuneration that is to be paid to the Secretary of the Department of the Prime Minister and Cabinet and the Secretary of the Treasury.

The Secretary of the Department of the Prime Minister and Cabinet would, in consultation with the President of the Tribunal and the Public Service Commissioner, assign all other Departmental Secretaries to an amount of remuneration consistent with the classification structure determined by the Remuneration Tribunal.

As is the case currently with determinations made by the Prime Minister, the Remuneration Tribunal’s determinations of the remuneration and other conditions of Departmental Secretaries would not be subject to disallowance.

Consistent with these changes and the 2007 election commitment referred to above, the Bill will also give the Remuneration Tribunal responsibility for determining the remuneration and recreation leave entitlements of the Public Service Commissioner, the Merit Protection Commissioner and the heads of Executive Agencies created under the Public Service Act.

Mr President, the measures contained in this Bill restore independence and transparency to the remuneration of parliamentarians, Departmental Secretaries, and the other office holders I have mentioned.

I commend the Bill to the Senate.

Tax Laws Amendment (2011 Measures No.1) Bill 2011

This bill amends various taxation laws to implement recent disaster related initiatives and improvements to Australia’s tax laws.

Schedule 1 makes exempt from income tax, the disaster income recovery subsidy payments made to victims of the recent floods and Cyclone Yasi.

The payments provided much needed financial assistance to employees, small business owners and farmers who experienced a loss of income as a direct consequence of the flooding that commenced on or after 29 November 2010 and which affected Queensland, New South Wales, Western Australia, Victoria and South Australia, as well as Cyclone Yasi which recently devastated Queensland.

Schedule 1 also exempts from income tax the ex-gratia payments to New Zealand Special Category Visa holders who were affected by a disaster in 2010-11, but due to their Visa status were ineligible for a tax-exempt Australian Government Disaster Recovery Payment. These ex-gratia payments are made for disasters where the Australian Government Disaster Recovery Payment has been activated, and are of an equivalent amount.

By exempting these disaster relief payments from income tax, the maximum amount of assistance is provided to affected individuals.  A tax exemption for these payments is also consistent with the exemption provided for equivalent payments made in response to other disasters, such as the devastating Black Saturday Victorian bushfires.

Schedule 2 provides an exemption from income tax for Category C payments made to flood-affected small businesses and primary producers under the Natural Disaster Relief and Recovery Arrangements.  This measure recognises the hardship suffered by small businesses and primary producers in affected areas, and provides certainty for recipients in terms of tax treatment at a time when they should not need to worry about tax matters.

Schedule 3 increases the flexibility of First Home Saver Accounts.  Money in a First Home Saver Account will be able to be paid into a genuine mortgage after the end of a minimum qualifying period, should the account-holder purchase a home prior to the release conditions being satisfied. 

Currently, if a first home is purchased before certain minimum release conditions are met, the First Home Saver Account must be closed, and the money in the account must be paid to the individual account holder’s superannuation or retirement savings account.

First Home Saver Accounts are designed to encourage individuals, through tax concessions and Government contributions, to save for their first home over the medium to long term, and have been available since October 2008.

The new law will allow the money in a First Home Saver Account to be paid to a genuine mortgage after the end of a minimum qualifying period, should the account holder purchase a dwelling in the interim.

This change will further assist aspiring home buyers by increasing flexibility through allowing people to purchase a home earlier than planned and still be able to put the money towards their new home, should their circumstances change.

This measure will apply for houses purchased after Royal Assent.

Full details of the measures in this Bill are contained in the explanatory memorandum.

Therapeutic Goods Legislation Amendment (Copyright) Bill 2011

When prescription and other higher risk medicines are approved for marketing in Australia by the Therapeutic Goods Administration, a document known as “product information” is approved for the use of health professionals.  This Bill amends the Copyright Act 1968 to ensure the long-standing practice of the Therapeutic Goods Administration of approving product information that is in a similar form for all brands of a registered medicine can continue. 

These amendments reflect the Government’s concern that the important public health objectives of accurate, consistent information for prescribers and consumers might be jeopardised if some pharmaceutical companies claim infringement of copyright in the approved product information of their registered medicines in an attempt to delay market entry of their competitors’ generic versions of those medicines. 

While this is only a recently emerging phenomenon, the use of copyright for this purpose has been identified as an issue that needs to be addressed. 

Product information contains technical information about the medicine such as the characteristics of the active ingredient, its indications and contraindications, a description of clinical trials that support the indications, precautions, possible adverse reactions, dosages and storage, and other information relating to the medicine’s safe and effective use.  Its purpose is to assist medical practitioners, pharmacists and other health professionals to prescribe or dispense the medicine appropriately and safely, and to assist them to provide patient education about the medicine in support of high quality and safe clinical care.

It is critical that doctors and pharmacists receive the same information when prescribing and dispensing all brands of the same medicine. It is, therefore, the Therapeutic Goods Administration’s practice to approve a text for the product information of a generic medicine that is in a similar form to that approved for the product information of the original medicine.  This avoids any perception that differences in the text of the approved product information for the different brands of a medicine reflect clinical or pharmacological variations in the medicine itself.

Brand substitution policy was introduced in Australia in 1994 to encourage the use of generic medicines.  The policy makes it possible to substitute, where appropriate, the prescribed drug brand at the time of dispensing in the pharmacy.  This practice is a vital component of pharmaceutical policy in Australia as it contributes directly to improved access and affordability of pharmaceuticals to both the Government and health consumers.  Timely availability of generic medicines is an essential feature of this policy.

Any barriers that have the effect of preventing or delaying market entry of new brands of medicines will have significant financial implications for both Government and consumers by reducing the effectiveness of the Further Reforms to the Pharmaceutical Benefits Scheme implemented under the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2010.  Members will be aware that under these reforms the first listing of a generic version of a medicine now triggers a 16 per cent reduction in the price the Commonwealth pays for the medicine.  The reforms will provide an estimated $1.9 billion in savings to Government and an average savings over 10 years to consumers of $3 per general PBS prescription.  These savings will contribute to the sustainability of the Scheme and maintain access to quality medicines at a lower cost to the taxpayer.

Action by pharmaceutical companies based on a claim of copyright in product information can substantially delay savings to the Government and Australian consumers because the price reduction trigger of the first listing of a generic version of a listed medicine on the PBS is absent.  It can also artificially prolong any market exclusivity that the company may have had under patent law.

Recently a number of pharmaceutical companies have taken, or threatened to take, legal action alleging that the use by another company of product information approved by the Therapeutic Goods Administration for a generic version of a medicine is an infringement of copyright.  In 2008 an interlocutory injunction was granted by the Federal Court to a pharmaceutical company sponsor of a registered medicine partly on the basis of an argument that copyright in the approved product information for that medicine would be infringed by a competitor’s use of the approved product information for a generic version.  The Federal Court hearing on this matter, scheduled for early March 2011, will consider the issue of copyright in the approved product information of a registered medicine will be considered for the first time by an Australian court.

In December 2010, in an apparent attempt to avoid the risk of similar litigation, the first generic version of a medicine was marketed without its approved product information being made available.  While this is not in breach of any existing requirements under the Therapeutic Goods Act, it is not conducive to the quality use of medicines and is not a desirable outcome for public health.  If the marketing of this medicine had been prevented by an injunction, the PBS statutory price reduction would not have been triggered.

Pharmaceutical companies currently receive appropriate patent protection for their medicines under Australian law.  Apart from the  market exclusivity conferred under the Patents Act, the Therapeutic Goods Act includes measures that require a person applying to register a generic medicine to certify either that they believe on reasonable grounds that a patent will not be infringed by the marketing of the medicine, or that the relevant patent holder has been notified of the application.  Data protection provisions also prevent information provided to the Therapeutic Goods Administration in relation to a medicine containing a new chemical entity from being used to evaluate a generic product for a period of 5 years from the day on which that medicine was registered.  The Government believes these measures safeguard a fair return for the efforts of companies bringing medicines to market.  The use of copyright injunctions to prevent generic medicines being marketed has the potential to provide the patent owners with a substantial additional period of market exclusivity after the patent has expired as copyright has a duration of at least 70 years from publication. 

This issue is not unique to Australia.  Similar issues have arisen in the United States in relation to Federal Drug Administration’s “same labelling” requirements for medicines under the HatchWaxman Amendments to the Federal Food, Drug and Cosmetic Act.  These amendments were designed to facilitate the introduction of generic competitors once the originator’s drug patent term and exclusivity periods ended by allowing the generic producers to “piggyback” upon the originator’s successful FDA application.  The same labelling requirement was upheld by the Second Circuit, United States Court of Appeal in 2000 in the SmithKline Beecham Consumer Healthcare case in which the Court commented that the purpose of the HatchWaxman Amendments would be severely undermined if copyright concerns were to shape the FDA’s application of the requirements.  The Court found as a consequence that the same-labelling requirements prevailed over copyright laws.

I now turn to the amendments.

The Bill will insert a new section 44BA into the Copyright Act 1968.  The effect will be that actions under the Therapeutic Goods Act for the purposes of approving product information for prescription and other higher risk medicines, or of approving variations to approved product information will not be an infringement of any copyright subsisting in any product information previously approved by the Therapeutic Goods Administration.  This will ensure, for instance, that an applicant for the registration of a generic version of a registered medicine will not infringe copyright if it provides a draft product information document that contains text similar to the product information already approved for that medicine.  This exemption would apply irrespective of when the product information was approved, that is, whether it was approved before or after the amendments come into effect. 

Secondly, the supply, reproduction, publication, communication or adaptation of any approved product information of a registered medicine will not be an infringement of copyright in any other approved product information where such an act is done for a purpose related to the safe and effective use of the medicine concerned.  This exemption would apply to such acts irrespective of when the product information was approved.  It would cover, for instance, acts of the Commonwealth (including by the Therapeutic Goods Administration), pharmaceutical companies and health care professionals and all those involved in making product information available to health professionals. 

The infringement exemption will only apply to acts done after the commencement of the amendments.

The Bill includes a so-called “historic shipwrecks clause” which ensures that if the amendments would result in the acquisition of property from a person otherwise than on “just terms”, the Commonwealth must pay “reasonable compensation” to the person.  This provision has been included as a precautionary measure to ensure constitutional validity and does not indicate that such a result is likely.

Exempting particular acts from infringement action under the Copyright Act is not done lightly.  The proposed amendments reflect the importance the Government places on ensuring the highest levels of health consumer safety through the provision of accurate information to prescribers and other health professionals about higher risk medicines.  The only other exemption of this kind in the Copyright Act relates to the use of approved labels on containers for agricultural and veterinary chemical products.

The amendments go no further than is necessary to ensure that the Therapeutic Goods Administration can continue to approve product information that is in a similar form for all versions of the same registered medicine.

The Government believes that these amendments will restore the appropriate balance between ensuring safe and timely access to medicines for all Australians and encouraging research and development in the pharmaceutical industry through appropriate protection of intellectual property.

I commend the Bill.

Ordered that further consideration of the second reading of these bills be adjourned till the first day of the next period of sittings, in accordance with standing order 111.

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