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ABC News Breakfast -

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VIRGINIA TRIOLI: The Federal Government has suffered another setback. The Senate last night blocked
proposed changes to the private health insurance rebate.

That decision now leaves a $2 billion hole in the Government's Budget.

JOE O'BRIEN: The Government also wanted to increase the Medicare levy surcharge. The Opposition
says the proposed changes were bad policy. For more, Health Minister Nicola Roxon joins us now from
Canberra. Nicola Roxon, good morning.

NICOLA ROXON: Good morning, how are you?

JOE O'BRIEN: Not too bad thanks. I've got more friends than your legislation though - it couldn't
find any friends in the Senate last night. Are you willing to make any changes to it before you
reintroduce it?

NICOLA ROXON: Well we're very committed to these measures, because we think that they are making
the support for private health insurance much fairer and sustainable into the future. Remember that
8 million Australians who have private health insurance will not be affected at all by these
changes. So the lower middle income earners of this country still will get generous support from
the government, but we don't believe that nurses and secretaries and those on low incomes should be
subsidising the private health insurance of those on high incomes, including even millionaires.

And we believe that we can make that argument to the public and to the senate. Of course we're
disappointed, but not surprised that the measure was voted against last night.

We will continue to consider our options, but we do believe we have to be able to make these sorts
of changes. It means that our health system will be sustainable into the future. And it frees up a
significant amount of money to invest in the growing health demands and health reforms that are
necessary for our system.

So we're disappointed that the Liberal Party would block that measure of savings, and we're really
calling on them to tell us which of the new health programs that they otherwise support from the
Budget do they think should now not be funded because they've blocked this $2 billion initiative.

JOE O'BRIEN: So are there any changes you would be willing to make to the legislation to get it
through?

NICOLA ROXON: Well look, what has actually happened in the Senate is the Liberal Party and the
minor parties all don't support this measure for directly opposite reasons, so the opportunity to
be able to find a landing point I think in those circumstances are going to be, you know, pretty
limited. But we believe that the Senate will listen carefully to the views of the public.

We do think this is a measure that ultimately the public can understand and support because it is
fairer, and because we have growing demands to fund new medications, new regional cancer centres,
new interventions, a new dental care scheme - all of these issues that are being debated in our
health reform debate simply will not be possible if we can't make these sorts of sensible
adjustments to the Budget.

JOE O'BRIEN: Will you wait three months before reintroducing this legislation?

NICOLA ROXON: Look, it's only just been voted against last night, and I of course will be talking
with my colleagues to consider our options. One, if Senator Xenophon wants to wait until the end of
the year when the Productivity Commission reports on some related matters.

Obviously, that would be sensible for us to consider that as an option. But we will continue to
pursue this measure - $2 billion of savings to the budget for a measure which makes private health
insurance fairer and more sustainable is not something that we can just give up on.

It's far too important for the Budget circumstances, obviously, but also, for the changes that we
want to invest in in healthcare.

So we will consider a whole lot of different ways that we can pursue this measure.

JOE O'BRIEN: So it sounds like then you will wait that three months so that this will become a
double dissolution trigger.

NICOLA ROXON: Well we're not looking for a double dissolution trigger. If the Senate wants to give
us that trigger that's in their hands. What we want is for this sensible measure to be passed.

We think it's fair. We think it helps put our health funding onto a more sustainable footing into
the future.

And we simply cannot afford any longer not to make those decisions. And it really highlights the
very irresponsible approach the Liberal Party is taking to our fiscal circumstances.

And I don't think they will be able to sustain that position.

JOE O'BRIEN: Well the Liberal Party does make the point that you did not go to the previous
election with this policy, and, in fact, it contradicts the guarantees you gave before the previous
election - so you do not have a mandate for this.

NICOLA ROXON: Well we didn't go to the last election with a global financial crisis either. We've
made quite plain that in these changed circumstances, we need to look at sensible measures that put
our health expenditure on a fair footing. And we think in a situation where people are being asked
to cope with some changed measures because of these circumstances - asking millionaires like Mr
Turnbull to fund his own private health insurance is really not a big ask.

JOE O'BRIEN: Just finally, the Government plans to move to break up the fairly cosy relationship
between doctors and drug companies - it seems there are some outrageous situations developing
there.

What do you hope to do in relation to that?

NICOLA ROXON: Well look, these are some new revelations. Obviously the pharmaceutical industry has
increased the strength of its own code of the way it markets its own products to doctors.

What we've seen reported in the media are some worrying reports that organisations that fall
outside that code have perhaps also been using fairly extraordinary measures to try to influence
the way doctors practice.

We're determined to make sure that doctors make their decisions based on clinical reasons. That's
absolutely what they are committed to, and I know from the comments from doctors groups they're
very determined to make sure that they also keep care and control of their own clinical decisions.

But I think that standards do have to be tighter. No-one wants to think that there is influence on
a decision a doctor might make about which drug or which product they market, or choose or
recommend to their patients. So it's something that I think does need to be looked at, because
these reports are quite concerning.

JOE O'BRIEN: Nicola Roxon in Canberra, thanks very much for talking to us this morning.

NICOLA ROXON: It's a pleasure.