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Tuesday, 10 November 1959


Mr WHITLAM (Werriwa) .- The honorable member for Fawkner (Mr. Howson) countered the speech of the honorable member for Eden-Monaro (Mr. Allan Fraser) by two general remarks and one specific estimate. The first of his general remarks was the question: How would Labour pay for the national health scheme which the honorable member for Eden-Monaro described? The answer is that a Labour government in Australia would pay for it in precisely the same way as the Labour and Conservative governments have paid for a similar scheme for more than ten years in the United Kingdom and for more than twenty years in New Zealand. In case members on the Government side should think that the cost would be ruinous, I will quote briefly from a report which the Conservative Government in the United Kingdom sought, in 1956, which shows how small a portion of the national income is spent, and what a diminished portion of it has to be spent on a national health scheme.

In the first full year, 1949-50, in which the British national health scheme operated, the net cost was 3.75 per cent. of the gross national product and the gross cost was 3.8 per cent. of the gross national product. By 1953-54, the net and gross cost had fallen respectively to 3.24 per cent. and 3.42 per cent. It is quite obvious that any well-governed country can afford to make health services freely available to its citizens.

The next general remark of the honorable member for Fawkner was that the people in Australia do not want a free health scheme. The plain fact is they have not had an opportunity to know what such a health scheme is like. No Commonwealth government, under our present Constitution, as interpreted by the High Court of Australia in a remarkable decision in 1949, can introduce a medical service except with the acquiescence and consent of the British Medical Association. But in the United Kingdom, where such a scheme has been in operation for many years, a gallup poll was taken, in 1956, on the question -

Suppose you had a chance to go back and vote on whether our national health services should be started or not, how would you vote?

Of the medical practitioners, 67 per cent, voted in favour, and of patients, 89 per cent, voted in favour. The plain fact is that no political party in New Zealand or the United Kingdom would have a chance of success if its candidates told the people they were going to modify, let alone abolish, the scheme.

Turning to the situation here, does the honorable member for Fawkner pretend that the people were given an opportunity to express their opinion of the 5s. tax on every prescription? Has he any doubt on what the people would say to such a tax if they were given the opportunity to express their view on it? The Government, of course, very prudently waited until after the federal elections before doing anything about this, and until every State election for this year had been safely passed. The only by-elections which have been held since show what the people think about this and these other unheralded taxes.

Finally, the honorable member for Fawkner made one specific estimate of the proportion of medical costs which are borne by the Commonwealth under the benefit schemes. As regards hospital benefits, we do not know what the cost of hospital treatment is in Australia. All we know is the number of claims which are accepted by the Commonwealth under the scheme and the number which are accepted by the funds. The fact is that the funds refuse to pay benefits in respect of at least one-third of the days in hospital for which the Commonwealth pays benefits. But in order to get the Commonwealth benefits you have to subscribe to the funds whether you get any benefits from them or not. As regards medical benefits, we know more precisely what the costs are. Here again one can only have resort to the figures of claims which are accepted under the scheme. In 1958, the funds bore 34.4 per cent, of the medical cost involved in claims which were admitted, the Commonwealth bore 28.6 per cent, and the contributors themselves bore 37 per cent., apart from the amount of their contributions to the funds.

This bill deals with three features of the national health scheme. It makes a small amendment concerning hospital benefits; it makes another amendment of greater benefit concerning medical expenses in the higher brackets; and it imposes charges on drugs while at the same time increasing the number of drugs which are made available as pharmaceutical benefits, as they used to be called. Of course, they can no longer be called free medicines.


Mr Falkinder - This is very much wider than it ever was before.


Mr WHITLAM - Yes. If you pick out various features of your scheme it is true that you can see some benefits. No one would dispute that. The pharmaceutical benefits have been a great benefit to many people in the community. But there are other features which I will touch on presently in which the present Government's national health scheme is very much less beneficial than the one which it succeeded and which this Government displaced.

Citizens encounter the greatest expense in the medical field and the most crippling cost is if they enter hospital. When they enter hospital, not only do they have to pay for their hospital treatment, but inevitably also the cost of hospital treatment is in excess of a man's income. One would have to have a very large income indeed to be able to pay for hospital treatment out of one's current income. In most cases also, one's income ceases when one goes into hospital and if one is in hospital for any length of time, one's income from sick leave or from long service leave or from furlough ceases. This measure makes very little contribution towards meeting the loss of income and capital involved.

When this Government came into office a person in any part of Australia could enter a public ward of a public hospital free of charge. The community bore the cost of rehabilitating him, so far as his hospital expenses were concerned. The present position is that when that agreement expired in 1953, the right honorable member for Cowper (Sir Earle Page), who was then Minister for Health, refused to renew it. He made benefits available from the Commonwealth for patients in hospitals if the hospitals observed the means test and imposed charges. That is not something he did because he had to do it.

All the States wanted to continue the old system and the Australian Capital Territory also. But they were instructed to apply the means test and a system of charges was imposed. In the Australian Capital Territory, where the Commonwealth can do as it likes, and in every State, the hospitals were told that unless they imposed charges and applied the means test they would receive no further benefits from the Commonwealth. Every State capitulated except Queensland.


Sir Earle Page - That is absolutely untrue.


Mr WHITLAM - That has been the position for six years. Nobody knows the position of hospitals better than the State Ministers for Health. It is significant that although the present Commonwealth Minister for Health (Dr. Donald Cameron) has always been asked to attend the annual conference of these State Ministers, after his experience at one he attended in January, 1957, he has decided not to return to them. The State Ministers therefore have to make their views known to him by correspondence.


Mr Roberton - That is unfair.


Mr WHITLAM - At least the Minister for Health is more coherent than his colleague the Minister for Social Services (Mr. Roberton). Many resolutions have been sent to the Minister for Health by the State Ministers concerning hospitals. They have been unanimously adopted by Australian Country Party, Liberal Party and Australian Labour Party Ministers for Health. Let me quote some of the resolutions passed unanimously at the conference of State Ministers for Health in January last year. The conference resolved that -

Having regard to the recent increase in the additional hospital benefits rate from 4s. to 12s., the Commonwealth Government be approached with a view to increasing proportionally the basic rates of 8s. and 12s. paid to the States under Hospital Benefits Agreements.

The Commonwealth refused the request. There were resolutions also concerning Commonwealth assistance for teaching hospitals, from which nothing has yet emerged Other resolutions were passed concerning mental hospitals, about which, also, nothing so far has emerged. In the resolution about mental hospitals, the Ministers unanimously resolved that - patients suffering from acute conditions who require and benefit from active treatment: . . should in every respect be regarded and treated in the same way as patients receiving active treatment in general hospitals and, therefore, resolved to ask the Commonwealth Government to make hospital benefit payments and pensions available to all acute patients in mental hospitals.

But the Commonwealth refused to accede to the request. It refused to pay for the current expenses or the rehabilitation of people who happened to be patients in mental hospitals, even if those patients could recover. Their relatives and the State governments alone must bear the burden.

I apprehend that honorable members know that I hold no particular brief for State governments when they are prepared to spend more money if the Commonwealth Government gives it to them. My own view, and it is increasingly the view of the community, is that the Commonwealth will have to accept the responsibility of running hospitals as the only way to get a national health service or uniform treatment for them. In the meantime, there is no doubt that the cost of running hospitals in the States is very high. The Commonwealth Grants Commission in its latest report includes a table which shows that in 1957-58 the average per capita expenditure by the States in maintaining their general hospitals was £4 7s. 10d., and their mental hospitals £1 8s. lOd. That is about 8s. per person per year more than the Commonwealth spends under this act. It is a large amount. The only contribution made by the Commonwealth to mental hospitals was by an act in 1955 to subsidize the construction of new mental hospitals. I recently asked the Minister for Health how much headway had been made in the subsequent four years towards overtaking the estimated deficiency of 10,962 beds in mental hospitals, as revealed by the Stoller report of 1953, and towards meeting the further deficiency of 20,000 expected by 1965. The Minister knew how much had been spent, but had no idea how many beds had been supplied. The Commonwealth completely wipes its hands of the people in mental hospitals who are, of course, most urgently in need of rehabilitation and who are least able to help themselves,

I pass now to a consideration of medical benefits. Medical benefits are aptly named if one realizes that they are benefits for medical practitioners rather than for medical patients. Every two years -in 1953, 1955, 1957 and now in 1959- the Parliament is asked to amend the schedule for medical benefits. That is, it is always asked to amend the schedule immediately after the biennial meeting of the B.M.A. federal council. The motivation in these matters is not the desire to reduce the expenses of the patients but to guarantee the fees of the doctors. Just before the act was last amended, the B.M.A. federal council in September, 1957, resolved that present benefits under the scheme should be increased to give an assured cover of at least 75 per cent, of the average fees charged at present, and that the association should draw up a scale of average fees at present being charged for the commoner medical services to be submitted to the Government as a basis for a revised schedule of benefits, and that this schedule should be reviewed biennially. Sure enough, the schedule was reviewed in November, 1957, and it has now been again reviewed at its biennial interval. We are not, of course, told what schedule is submitted by the B.M.A.; all we know is that it makes the claim on the Government, publicizes it through the press, and the Government complies. Last May, the B.M.A. federal council once again passed resolutions. I quote from the " Sydney Morning Herald " -

The B.M.A. has criticized the Federal Government's failure to keep medical benefits up with the increased cost of living since 1953.

The higher cost of living has increased medical fees.

I think that is a particularly choice rationalization of the position; which comes first, the cost of living or the increase in medical fees? I resume the quotation -

The association has pointed out that originally the total benefits were supposed to cover about 90 per cent, of the average fees of most general practitioners and some specialists.

Now, it says, patients have to pay about ^7 per cent, of their doctors' fees besides contributing to a medical insurance fund.

The increases as a result of the medical benefits proposals in the present bill were estimated in the Budget to amount to £475,000 out of a total cost for medical benefits of over £9,000,000. That is, onenineteenth of the medical benefit expenditure will be due to the increased provision for medical benefits in this bill. We can expect the Commonwealth's share of the cost of medical benefits to rise, therefore, by perhaps H per cent.. At present it meets 28.6 per cent, of the cost. If that increase is matched by an increase in fund benefits, we can expect that contributors to funds will have to pay not 37 per cent, as at present but only 34 per cent, of their medical bills. The scheme, however, was originally intended to cover 90 per cent, of their bill, according to the B.M.A. and the honorable member for Fawkner, but there will still be a third of the medical bills which will have to be found by the patients. This bill will bring about, the Budget estimates, an improvement of 3 per cent, in the present position.

I pass now to the remaining, and least expected, feature of the bill. This is not something that was asked for by the B.M.A. and it has not been found necessary in any other country. In fact, it is a matter into which other countries have made investigations and on which they have made adverse reports. My colleague, the honorable member foi Eden-Monaro, has already quoted from the Hinchliffe report in the United Kingdom this year. In the United Kingdom, there is a prescription charge of ls. sterling. That is a quarter of the amount that we will be imposing on all prescriptions under this bill.


Sir Earle Page - You are a bit out of date, lad. It is ls. on every ingredient in each prescription.


Mr WHITLAM - The right honorable gentlemen should remember the report because I take it that is one of the reasons he went abroad recently. The committee reported -

The present prescription charge is a tax which, besides stimulating the wrong incentives, has proved disappointing financially. If any change in the basis of the prescription charge is contemplated in the future, it should not be put into effect without an attempt to assess in advance its probable effects by means of a special inquiry through a body such as the Social Survey.


Mr McMahon - Is there not a vital difference between that scheme and the one you are trying to compare it with?


Mr WHITLAM - Yes, the British charge is 25 per cent, of yours.


Mr McMahon - In substance, it is totally different.


Mr WHITLAM - The Minister for Health remains commendably mute during this discussion, but the Minister for Labour and National Service, who has just come into the chamber, enters into it. None of these Ministers nor the Treasurer in bringing in the Budget mentioned anything about inquiries that had been made overseas or the practice overseas. This Government would have the Australian people believe that no modern country can afford a free health service. But the British Government has had ten years experience of one and the New Zealand Government has had 20 years experience of one. Once any modern democracy has had experience of it, it would never forsake it. This very unexpected and snide tax, this 5s. tax on every prescription, has been considered in the United Kingdom and has been rejected. The present small charge in the United Kingdom has been condemned, not only as a tax but also as being unsuccessful in its purpose.

I sympathize with the Government to a certain extent in the astronomical rise in the cost of pharmaceutical benefits, i It is partly due to the fact that drugs are, in the main, developed and controlled by companies outside Australia's jurisdiction. The State Governments, if they co-operate or if they allow the Commonwealth to do the job for them, can run hospitals and decide what the hospital charges will be and how they will be spread. To a certain extent, if the States got together they could do the same in relation to medical charges. There is, however, a limit to what any Australian Government can do about the cost of drugs because the companies which develop them and make a handsome profit out of them, could well say to Australia, " If you do not pay our price you will not get the drug ". We have the very fine Commonwealth Serum Laboratories which could go into this field more than they do. As far as they have gone, they have proved among our most creditable organizations. This Government has sought to moderate the cost of drugs, not by producing them, or by making treaties with foreign governments, but by delaying the provision of drugs.

There has been a most marked system of delay in the introduction of these drugs. If honorable members were to look at the dates on which drugs have been recommended for inclusion in the free list by the Pharmaceutical Benefits Advisory Committee and the dates on which they have become available, they would see how long the delays have been. I shall quote the dates from 1956 onwards. Drugs which were recommended for inclusion by the committee on 6th July, 1956, became available on 1st November, 1956; those which were recommended on 2nd November, 1956, became available on 1st July, 1957; those recommended on 1st March, 1957, became available on 1st July, 1957; those recommended on 5th July, 1957, became available on 26th September, 1957; those recommended on 22nd November, 1957, became available on 1st April, 1958; those recommended on 21st March, 1958, became available on 1st July, 1958; those recommended on 4th July, 1958, became available on 1st February, 1959; those recommended on 7th November, 1958, became available on 1st May, 1959; and those recommended on 6th March, 1959, became available on 1st August, 1959.

To summarize the position, the delay has varied from three months to eight months. This does not take into account any delay that has occurred before the committee has made its recommendation, any delay on the part of the Minister in referring the matter to the committee, or any delay on the part of the committee in carrying out its investigations. The delay of from three to eight months is the time that has elapsed between the date of the committee making a recommendation and the date of the Government bringing the recommendation into effect. During that period, people have not been able to receive the drugs which the committee has recommended should be provided to them free.

When 1 mentioned this matter in the debate on the National Health Bill two years ago, the Minister stated that the principal delay was in the Parliamentary Draftsman's office. I thereupon asked the Parliamentary Draftsman the delay that had occurred in his office, and he told me that the maximum delay for which he was responsible was five weeks, and that was during a Budget session. On some occasions, he has been responsible for a delay of only ten days. Unquestionably, therefore, the principal delay has occurred in the Department of Health, I believe in accordance with a set policy. The shortest period of delay - three months - occurred in the middle of 1957, just after I began asking questions on the matter. But I kept on asking questions, and this year the Minister decided that the questions related to matters of policy which were confidential. On 26th February I asked him when the committee had made recommendations, when he had received the recommendations, when he had sent them to the draftsman and when he had received them back from the draftsman. The Minister replied that inquiries were being made and that a reply would be furnished as soon as possible. Honorable gentlemen will notice the " as soon as possible " because, on 14th May, nearly three months later, he told me that it was proposed in future to regard the recommendations of this committee as confidential to the Minister. That reply was not printed in " Hansard " for 14th May; in tact it did not appear until 13th August. It was almost as if the Minister were gazetting a new drug.

I point out to the honorable gentleman that this is a statutory committee. It has been set up by the Parliament in one of its statutes. Honorable members are entitled to know how delegated legislation works and to what extent Parliament's functions have been properly abdicated in favour of such bodies. The Pharmaceutical Benefits Advisory Committee is appointed by the Minister admittedly, in some cases, from panels that have been submitted to him by professional bodies, but he is completely familiar with the proceedings of the committee and there is no excuse for him to take three months or, as it is now once again, six months to adopt its recommendations.

There have been some drugs in relation to which one can identify some further delay. Honorable gentlemen will remember that the right honorable the Minister in charge of the Commonwealth Scientific and Industrial Research Organization regarded the development of serpasil by that organization as so important that on 25th May, 1955, he successfully sought leave to make a statement to the House concerning this surprising new discovery. In April, 1957, I asked the Minister for Health whether he agreed with the description of the drug that had been given by the Minister in charge of the C.S.I.R.O., and he replied that he did. I asked him whether the Pharmaceutical Benefits Advisory Committee had considered including it in the free list, and he replied that the matter was under consideration. In May, 1957, he said that the Government had decided not to include the drug in the free list. Two years had elapsed in the consideration of that matter.

The honorable member for Fawkner made some reference to the National Health and Medical Research Council, a very valuable body, of whose nineteen members the Commonwealth Minister for Health appoints five. The council made a recommendation for the free provision of one drug on 24th May, 1956, and the drug ultimately became available, after going through the manifold hands of the Minister for Health, the Pharmaceutical Benefits Advisory Committee, the Parliamentary Draftsman and the Government Printer, on 1st July, 1957. Another recommendation was made by the National Health and Medical Research Council on 13th November, 1958, and the particular drug became available on 1st August last.

I shall conclude with a reference to one other drug, rastinon or tolbutamide, which is prescribed for persons who are suffering from diabetes but whose hearts are adversely affected by insulin. I mentioned this matter to the Minister for Health on 28th August. 1958. and he told me that it had been referred to the committee. The drug is used mainly by pensioners. It costs £2 6s. a bottle which lasts for three or four weeks, so its purchase involves people on restricted incomes in considerable expense although it is necessary if they are to enjoy any health at all. The Minister told me on 18th November last, " This matter is at present under consideration ". The committee had met on the seventh of that month. The committee met again on 6th March last. On 12th May the Minister told me, "This question has not yet been finalized". In other words, he had not then made up his mind whether to adopt the recommendation which must have been made by the committee either in November or in March. At last the drug became available, for pensioners only, on 1st August.







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