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Wednesday, 19 April 1961


Mr WHITLAM (Werriwa) .- Mr. Speaker,this is the first bill to amend the National Health Act with which the Parliament will have to deal this year. In 1953, 1955, 1957 and 1959, the Parliament was asked to amend the principal act in various respects, but chiefly by substituting new schedules of the Commonwealth benefits which are paid for medical treatment. The Parliament is regularly asked to amend the schedules immediately after the biennial meeting of the federal council of the British Medical Association. The motivation in these matters is, not the desire to reduce the expenses of patients, but the desire to guarantee the fees of the doctors. The next biennial meeting of the federal council of the British Medical Association will be held during the recess of the Parliament, and, accordingly, during the Budget session once again, we shall be again amending this act to oblige the doctors.

The present amendments are rather simple. I propose to devote my attention to two aspects of them only - those relating to the Pharmaceutical Benefits Advisory Committee and to hospital benefits. The Pharmaceutical Benefits Advisory Committee is one of the devices by which, under the administration of the right honorable member for Cowper (Sir Earle Page) and his successor, the present Minister for Health (Dr. Donald Cameron), the Commonwealth has evaded its responsibility with respect to health services. It is one of the devices by which the Commonwealth chooses to delay, not for medical but for budgetary reasons, the provision of pharmaceutical, medical and hospital benefits for Australian citizens and residents. It is one of the devices by which the Australian public and its representatives in this Parliament are precluded from examining the administration of the Government. The Minister has never published, and has consistently refused to publish, the names of the men who are appointed to the Pharmaceutical Benefits Advisory Committee. He has never even published the name of the officer of his own department who is appointed to the committee. I have asked the Minister many questions on the subject and he used to reveal to us what the committee's recommendations were. But a couple of years ago, he decided that these also should be confidential. It is now no longer possible for anybody to ascertain what the recommendations of the committee have been as to the inclusion of drugs on the free list, their removal from that list, or the reason for the delay in carrying out either of those processes. The committee is a greater mystery now than ever before.

The Minister has also inadvertently or deliberately confused the position still more. One does not really know when the committee meets or how it conducts its deliberations. One does not know who belongs to it; one does not know what its decisions are, and it is very difficult now to obtain information about its methods of operation in any respect. Let me illustrate that by referring to some of the answers the Minister has given to questions I have asked him without notice, and on notice, in recent months. The. last additions to the free list became available on 1st November, 1960. The last meeting of the Pharmaceutical Benefits Advisory Committee before that date was on 18th March, 1960. Thus by one method or another the provision of these benefits was delayed for seven and a half months. I know that the last meeting of the committee prior to 1st November was on 18th March because the Minister told me so in answer to a question I put on the notice-paper, and which he answered on 30th August.

To make the position even more confusing, on 5th October last, when I asked the Minister why there had been such a delay in making available the drugs which he had promised to make available a couple of months earlier on the recommendations of the committee, he told me that the committee's deliberations took a very long time because it had to examine a very large list of drugs. I interjected -

You told me the committee last met in March.

The Minister said -

The committee commenced to meet then, but it has held a number of meetings since.

That was on 5th October. I then placed on the notice-paper a question asking the Minister to reconcile this statement that the committee had last met on 18th March with his other statement that it had commenced to meet in March but had held a number of meetings since. This is what the Minister told me on 22nd November last -

At the March meeting the committee decided to make extensive investigations regarding the matters before them and for this purpose informal communication took place between the members who reside in different States. Some members of the committee did meet from time to time, but there was no further formal meeting of the full committee until 4th November.

In fact, there was only one meeting of the committee before those drugs became available, and that was seven and one-half months before they became available. Therefore, the Minister's reply to my question without notice, on 5th October, Was inaccurate.

I have asked him further questions, sometimes by correspondence, on these subjects. For instance, I wrote to him on 24th October last with the suggestion that certain drugs - takadiastase. pepsin and pancreatin - should be considered for inclusion in the free list. Then, as I have already told the House, the committee met on 4th November. On 8th November, the Minister acknowledged my letter and said -

I will be pleased to refer your representations in this matter for the consideration of the Advisory Committee at its next meeting and I will write to you again when I have the committee's advice regarding the tablets.

On 9th March, I again wrote to the Minister concerning the absence of any further decisions, and on 7th April, he wrote to me -

Since writing to you last-

That is, since 8th November - a meeting of the Pharmaceutical Benefits Committee has been held and consideration given to this matter.

He also said -

Whilst all of the business arising from the meeting has not yet been finalised, I am in the position to advise that the committee was not prepared to recommend that these tablets be made available as a benefit.

I later asked the Minister, by way of question on notice, on what dates the committee had met since 4th November, and his answer was -

The committee has not met since 4th November.

What, then, are the facts? The letters which the Minister has sent to me are quite obviously inaccurate. He told me that the matter would be referred to the committee. He told me so after the committee last met. Five months later, he told me that the committee had decided that it would not recommend the inclusion of these drugs on the free list. Then he told me in answer to a question on notice that, in fact, the committee still had not met since he first wrote. In other words, the Minister's replies are not accurate in any sense. I have spoken, so far, only about the inclusion of drugs on the free list.

I come now to the removal of drugs from the free list. The Minister has stated that drugs are added to, or removed from, the free list only on the recommendation of the committee. He has been quite categoric in saying that. On 15th September, 1959, he answered a question by the honorable member for Batman (Mr. Bird) in these terms -

The question of whether drugs are placed on or removed from the list of pharmaceutical benefits for pensioners, or indeed for the general population, is decided on the advice of a committee of experts.

Again, on 27th October, 1959, he told the honorable member for Yarra (Mr. Cairns) that drugs are placed on the list, or taken off it, on the advice of a highly expert committee.

The latest example of the removal of a drug from the list concerns the drug androstanolone. This was one of the drugs which became available on 1st November, 1960, presumably on the recommendations of the committee which had last met on 18th March. It might have been recommended at earlier meetings of the committee. But in giving this date I assume that a recommendation of the committee comes into force at the first date on which new drugs become available after the committee has met. On 24th November, 1960, the Minister for Health issued a public statement in these terms: -

Steps have been instituted immediately, on the advice of the Pharmaceutical Benefits Advisory Committee, to alter the listing of the drug and the restriction on its use will apply from 1st January.

I am not cavilling at the reasons which the Minister gave for restricting the use of this very expensive drug - a drug which, in fact, was not required for many of the purposes for which it was being prescribed by doctors. But it will be noticed that the drug became available on 1st November. The meeting of the committee was held on 4th November. Unless the Minister can assert that the committee, by 4th November, had already recommended the removal of androstanolone from the free list, in this case a drug has been removed from the list without any recommendation of the committee at all, because there has been no meeting of the committee since 4th November.

In earlier years when I commented on the delay in implementing the decisions of the committee, the Minister had been ungracious enough to blame, among other people, the Parliamentary Draftsman. So thereafter I always asked the AttorneyGeneral (Sir Garfield Barwick) the date on which the instructions were received and fulfilled by the Parliamentary Draftsman. In actual fact, never more than a month elapsed and on this occasion one week elapsed between receipt and fulfilment of instructions by the Parliamentary Draftsman. So there is no question that the Parliamentary Draftsman is responsible for any of the delays in this matter. Is it necessary for the committee to recommend the removal of any of these drugs? If it is, how is it that this drug was removed from the free list without the recommendation of the committee?

On the subject of drugs, I shall make a few general remarks. The honorable member for Barton (Mr. Reynolds) very properly stated that the whole of the scheme had been a bonanza for the drug companies. There is no form of foreign investment which has proliferated so luxuriantly as the subsidiaries, affiliates, and licensees of the drug companies. I shall mention the American companies which have mostly established subsidiaries in Australia since this scheme came into operation. They are Eli Lilly International Corporation, Johnson and Johnson, Merck and Company Incorporated, the Dow Chemical Company, Sterling Drug Incorporated, The Upjohn Company, Vick Chemical Company, Warner-Lambert Pharmaceutical Company Incorporated, the Pfizer Corporation and the Monsanto group. From the United Kingdom there is Allen and Hanburys Limited, the Wellcome Foundation Limited and the famous firm of Beecham. From West Germany there is Farbwerke Hoechst Aktiengesellschaft. We have been very fortunate, to a certain extent, in the formulae and skill which must have flowed from this investment, but we are certainly paying most handsomely for this know-how.

From now on, the work of the Commonwealth Serum Laboratories should be augmented. Here I rely on an answer given a month ago by the Minister for Health to the honorable member for East Sydney (Mr. Ward). The Minister said that the Commonwealth Serum Laboratories do not compete on the Australian market with the products of the privately owned drug houses except in some classes of penicillin and insulin. It is not necessary for the Australian Government to subsidize the drug houses as lavishly as it has been, in effect, subsidizing them. Significantly, there has been by no means the great increase in the price of penicillin and insulin that there has been in the price of all other drugs. The prudent, the patriotic and the economic arrangement would be for the Commonwealth Serum Laboratories to manufacture under licence from the foreign drug companies. There is no reason whatever why Australia, with the facilities of men and equipment already in this country, could not manufacture any of these drugs. We would pay very much less for them.

I pass now to the question of hospital benefits. The cost of hospitals has been taken up by the State Health Ministers, year in and year out, with the Commonwealth Minister. When the Chifley Government made an arrangement with the States for subsidizing occupied hospital beds, the understanding was that a third of the cost of maintaining the beds would be met by the Commonwealth through its direct grants to the States; one-third would be met by the States out of their consolidated revenue; and the remaining third would be met by the patients. The Commonwealth, in effect, has frozen its direct grants to the States. It has, of course, increased its payments for hospitals but in the form of subsidies to hospital benefit organizations. That is, Commonwealth assistance to the hospitals is now given principally through the component of patients' fees. But now the States pay from their consolidated revenue, not a mere third of the cost of conducting hospitals, but more than one-half of the cost. The patients still pay a third, the Commonwealth paying part of that, and the Commonwealth pays the remaining one-sixth or one-seventh of the cost directly.

As earlier speakers have pointed out, there is not the co-operation between the Federal and State governments in conducting hospitals in Australia as there is in the United States of America, or as there is in Canada between the federal and provincial governments. Under the Constitution, the Commonwealth has power to provide medical and dental services. It has maintained hospitals under the defence power for ex-service personnel. The Commonwealth is now meeting a much smaller percentage of the cost of conducting other hospitals than it did in the 1940's. This cost has been particularly onerous to the Australian public since a means test has since been applied to public ward beds. The

Menzies Government cancelled the scheme which the Chifley Government established by agreement with the States for a five-year plan under which a patient-


Mr Fulton - It still exists in Queensland.


Mr WHITLAM - That rs the one State which still has that scheme. Queensland is still able to provide a certain number of beds in public wards because it was doing so before the uniform taxation scheme came into operation. That rs, Queensland's finances were geared to that procedure. But the Country Party-Liberal Party Government in Queensland has, in fact, reduced the number of beds available to the general public in public wards. At all events, in all the other five States, even the wealthiest, it has been necessary to impose once again charges in public wards of hospitals and the only way that persons can be exempted from fees in public wards is if their means are really restricted. Here again it is very difficult to get any information from the Minister. I have stated that the State Ministers for Health have constantly pleaded with the Commonwealth to restore the original ratio of one-third, onethird, one-third between direct Commonwealth grants, State revenue and patients' fees.

The Minister did attend a meeting of the State Ministers in the first year after he took office in 1957. Last week I asked him the following question, upon notice -

1.   What requests or suggestions have been made for legislative and administrative action by the Commonwealth ... at meetings of the State Health Ministers since he attended such a meeting?

2.   What action or decision has been taken on each of these requests and suggestions and when was it taken?

The Minister's reply was -

I have not been supplied with a record of the proceedings at meetings of the State Health Ministers since I last attended.

That was an inaccurate reply. Not only was it lacking in frankness, but I think I can establish that it was lacking in truth. The Minister attended a meeting of the State Ministers for Health in 1957. He discussed the resolutions of the 1958 conference of Ministers with a deputation of those Ministers. For that statement I rely on a question I asked the Minister and the reply he gave me on 7th May, 1958. On that date I asked the Minister -

Is it a fact that he had a discussion, over three weeks ago, with the New South Wales, Victorian and Queensland Ministers for Health on the resolutions carried at the conference of all State Ministers for Health last January?

His reply to that question included these words -

I did have a conference a short time ago with the three Health Ministers mentioned by the honorable gentleman.

That is, the Minister did, in April, 1958 or thereabouts, have a discussion with three of the State Health Ministers who conferred with him concerning the resolutions passed at the meeting of all the State Health Ministers in January, 1958. Was it, therefore, a frank or a correct answer to give last week? I remind the House that he said -

I have not been supplied with a record of the proceedings at meetings of the State Health Ministers since I last attended.

The record of the State Health Ministers' conference held next year in Brisbane includes an interesting passage. Sir Lyell McEwin, the Liberal Minister for Health in South Australia, said' -

I move - "That a delegation from this Conference, comprising the Ministers of Health from New South Wales, Victoria, and Queensland wait upon the Commonwealth Minister for Health and discuss matters arising from this Conference having as a basis the arguments set forth by their officers."

Mr. E.P. Cameron, as he then was, the Liberal Minister for Health in Victoria, then said -

I second the motion.

The motion was agreed to. In fact, that delegation did meet the Commonwealth Minister for Health and put the resolutions of the 1959 conference to him. I believe that similar resolutions were carried and that the context of those resolutions was conveyed to the Minister as the result of the meetings of the six State Health Ministers in Sydney in January last year and in Perth in January this year. I have not the transcript of the proceedings of the State Health Ministers' meetings in those years, but I have the transcripts of the meetings in the previous years. They are published and are available to anybody who chooses to go to the Government Printers of the States concerned - that is regarding the meeting m Melbourne in January, 1958, and in Brisbane in January, 1959. The Minister's reply to me was obviously sheer shuffling. He stated that he did not receive a record of those proceedings, but in fact the Ministers called upon him on at least two occasions and they wrote to him on all four occasions.

The significance lies in the contents of those resolutions. I shall not go into all the matters upon which the State Health Ministers have sought a relaxation or alteration of the Commonwealth's attitude. They cover such matters as migrant patients in mental hospitals, the payment of hospital benefits and age or invalid benefits to medical patients and increased hospital benefits generally. I shall confine myself to the resolutions which have been passed concerning the increase in the payments which the Commonwealth makes to the States for each occupied bed. In Melbourne in January, 1958, the State Health Ministers unanimously 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 proportionately the basic rates of 8s. and 12s. paid to the States under Hospital Benefit Agreements.

In Sydney in January last year, the State

Health Ministers unanimously resolved -

.   . serious danger can best be averted by an increase in the basic benefit rate of 8s. per day and in the additional benefits now payable in respect of insured contributors.

In Perth, in January last, the State Health Ministers unanimously resolved -

The base rate of 8/- per day should be increased to at least 28/- per day; or the base rate of 8/- per day and. the additional benefit of 12/- per day should be increased by 20/- per day.

This is not just a party political matter, because the State Health Ministers are Liberal Party, Country Party and Labour Party and, year in year out, they all are unanimous in pleading with the Commonwealth Government to maintain the obligation that it undertook fourteen years ago, or to adhere to the spirit of that agreement. Such increase as took place in the years after the war in hospital standards was due to the participation of the Commonwealth in hospital administration and services. That can only be maintained in this country, as it is in other federal systems where there is a disproportion between the financial resources Federal and State, or provincial, by the Commonwealth Government maintaining its obligation.

I now refer quite briefly to the surpluses of the hospital benefit funds which the Commonwealth sponsors.







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