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Tuesday, 11 August 2015
Page: 4925

Senator BACK (Western Australia) (13:46): I rise very, very proudly to support the Medical Research Future Fund Bill 2015 and the Medical Research Future Fund (Consequential Amendments) Bill 2015. As a person who once had a kindred relationship with medical research I hope that this initiative of the Australian government will be strongly supported by everybody in this chamber, that we will see it pass through this chamber and that, in so doing, it will come into law. Senator Cameron was somewhat amused by my veterinary reference, but he may well know that 75 per cent of all infectious diseases in human beings have their origin in animals. Again I am very proud to say as an aside—and I hope that, in fact, the future fund might pick up on this issue—that Australia has moved and is moving to a One Health approach.

I want to commence by reflecting on the excellence of the history of medical research by Australians, because it sets the scene for this visionary move by the government, led by the Treasurer, in establishing this future fund. I commence in 1945 with Professor Baron Howard Walter Florey who, with his collaborators, won a Nobel prize for the discovery of penicillin and its curative effect in various infectious diseases. In 1960 Sir Frank Macfarlane Burnet won his Nobel prize for acquired immunological tolerance. In the world of immunology one can only think of Professor Gustav Nossal, who has demonstrated an enormous capacity for Australians in the field of research—indeed, he is internationally acclaimed and has brought great credit to his country. I go on: the Nobel Prize in Physiology or Medicine in 1970 was awarded to Sir Bernard Katz, again in that particular area for transmission in nerve terminals and inactivation. In 1996, I am very proud to say, a fellow veterinarian, Professor Peter Charles Doherty, received his Nobel prize, relating to the specificity of cell-mediated immune deficiencies.

We go forward to 2005 when—again I am very proud to say this as a fellow Western Australian—Professors Barry Marshall and Robin Warren received the Nobel prize for their work in determining and confirming the fact that the bacterium Heliobacter pylori is responsible for gastritis and peptic ulcers. In fact, so committed was Professor Marshall to proving this theory that he ingested a serum of the bacterium Heliobacter pylori, contracted severe acute gastritis and peptic ulcers and then treated them. Indeed, that led to the Nobel prize they won. Then we go even further to 2009 with Professor Elizabeth Blackburn and her collaborators, Professor Carol Greider and Jack Szostak, for their work with chromosomal anatomy and functionality.

Australia has a very proud history of medical research, and the future fund builds on that proud tradition. We have always punched well above our weight, and the establishment of the future fund is going to allow further opportunity in this area.

We know that with an ageing population that is much more active into older life—indeed, younger people are far more physically active recreationally—there are increasing demands on health. I remember it being said to me four or five years ago that, the way the Queensland public health budget was going, by 2025—if no changes were made—the entire state revenue would be required just in the health sector. But the future fund, though not on its own, will significantly contribute to the containment of costs.

What are we going to see in this particular circumstance? We are going to see Australia continue to advance world-leading medical research projects to attract and retain first-class researchers and to deliver improved health and medical outcomes—not just for all Australians but for all those within our region. Going back to the question of One Health, I think of the Hendra virus which has killed veterinarians and a couple of racehorse trainers and horses, and is very closely related to the Nipah virus, which has killed children in Malaysia, Bangladesh and India. So it will not just be to the benefit for Australians—it will be a benefit for all, especially those within our region.

The second point to be made is that we often hear about the 'brain drain' of our top young researchers leaving Australia to go and work elsewhere because they do not have the opportunities; the future fund is going to give us the opportunity to attract the best young brains to come into this country because they will want to work with it. The fund will support the sustainability of our health system well into the future. All Australians will benefit from ongoing investments in medical research and medical innovation through the fund, both directly through improved health and indirectly through improved productivity and economic growth. This brings to my mind CSL—the Commonwealth Serum Laboratories, as they were once known, a company that is now international, with its world-leading researchers and commercial developers of vaccines in both the human space and the animal and animal production space.

This gives me the opportunity to say that the future fund is going to generate a whole stack of new business opportunities, and we know that one of the new growth centres announced by the Minister for Industry and Science, Mr Macfarlane, is directly related to medical innovations and research and commercial opportunities. This is all coming together so well in this particular space.

I again compliment the executive on the way in which they have established the concept of the fund which will allow the capital to be invested by the Future Fund Board of Guardians—and what an outstanding group they have been and continue to be. I saw some figures on the weekend on the investment success of the Future Fund against all other superannuation funds in this country. If my figures are correct, the Future Fund has been performing at an average of in excess of 8.8 per cent return on funds invested; whereas the average of all superannuation funds has been only a shade over five per cent. So what better hands in which to place the fund than those of an already proven organisation, with a set of circumstances and a model already in place so that we do not need to generate a new wave of bureaucracy to have responsibility for the capital component of the new future fund.

We know that there will be a special account which will allow for earnings to be distributed from the future fund to the health portfolio special account, to corporate Commonwealth entities or to the COAG reform process to address medical research and innovation priorities. What are we going to see in this instance? We are going to see the build-up of capital into the future fund. It will eventually get to some $20 billion, and that $20 billion of capital will be protected. Only the interest accruing from that capital will eventually flow into medical research. So why is it important for us in this place today to be debating this issue and, I hope, to unanimously give agreement to the future fund? It is because it was due to start on 1 August 2015, and it will, indeed, subject to the passage of the legislation through this place, commence soon after the legislation is passed. Therefore, I say to my colleagues on all sides that delays in the commencement of the future fund will impact the level of investment earnings of the fund and will reduce the amount of funding available for distribution to medical research and innovations into next year. So it is critically important.

How will the earnings be determined? As I have said, the fund is a capital-preserved fund. The net earnings of the fund will be distributed annually to support ongoing health and medical research. The net earnings from the fund will serve as a secure revenue stream well into the future. I know that the Assistant Minister for Health, Senator Nash, and, of course, the Minister for Health, Ms Ley, will be reassured that we will know well into the future that we can program research that is so desperately needed and that we can actually schedule it. It has been disappointing to hear some of the flippant comments by others as to where they believe some of that research money may go.

How will the funding be distributed? Who will make recommendations to the minister in terms of the distribution of that funding? The funding will be distributed to address Australian medical research and innovation priorities and will be determined—it is critically important that people understand this—by the independent advisory board based on the Australian Medical Research and Innovation Strategy, and funding will be taken from the fund only following a decision of government through the usual budget processes. Payments other than those made through the COAG Reform Fund or as appropriated to Commonwealth entities will be distributed as grants—not as loans but as grants—which will be, for example, through the National Health and Medical Research Council. The NHMRC will have a critical role in this advisory component as, indeed, it should from the commencement.

Contributions to the fund will come initially from some $1 billion in uncommitted funds in the Health and Hospitals Fund—and it is a good thing the finance minister has turned up, because he has got accountability to this place and to the parliament more generally in terms of that disbursement. We will see $1 billion in uncommitted funds in the existing Health and Hospitals Fund, and the estimated value of savings from the health portfolio for 2014, as announced by Minister Ley, will allow the fund to get to its capital level of some $20 billion by, it is hoped, 2019-20. This year's budget, which has been so well accepted and received by the Australian community, contained a range of health savings measures, so not all of the capital from health savings expected by 2019-20 will be required to achieve that $20 billion target, but more of it will be invested as we go forward into the future. What we need to know is: how do the crediting arrangements from this fund differ from those of nation-building funds? It is of some significance, as Senator Macdonald would know, that the crediting arrangements for the fund and the nation-building funds are similar, but there are differences in terms of the initial credits to the fund itself. The total amount of the initial credits for the nation-building funds were specified in legislation.

Debate interrupted.