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Thursday, 19 March 1987
Page: 1180

Mr ROCHER(6.25) —The National Health Amendment Bill seeks, among other things, to amend the conditions under which pharmaceutical benefits will be paid and pharmacists reimbursed. The Pharmaceutical benefits scheme as it now exists provides for the supply of approved drugs and medicines to the public on payment of a patient contribution and gives entitlement to pensioners and other eligible persons free of cost. The Auditor-General, in his report released today, commented on some of the matters which have plagued the pharmaceutical benefits scheme and the computer-based program known as Pharmpay, which is the name given to the computer system by which these payments to pharmacists are processed. It is also used for the extraction and collation of statistics and for other administrative checks, including the establishment of a database of drug usage for future reference and, presumably, to help establish a policy in respect of future payments.

It seems that not so long ago-I remember dealing with this subject in an adjournment debate-for some reason the staff resources available to Pharmpay at the processing centres have been insufficient at different times, and certainly in the recent past. The reason given was that an unexpected number of keyboard operators suffered from repetitive strain injury, and there were simply not enough operators to process all the information and to remit payments, particularly over the period January to May 1985. The Department of Health then developed a proposal to overcome the processing backlog of prescriptions by making advance payments prior to verification of the entitlement of pharmacists. In March 1985 the Health Department sought comments on this proposed system of advance payments from the Department of Finance, which allegedly responded that it had no objection in principle, but urged the Department of Health to obtain the advice of the Attorney-General (Mr Lionel Bowen). The Department, as it turned out, did not seek that advice, and therein lies the problem which I shall come to.

Advance payments nevertheless commenced in 1985, in the absence of that legal advice that it was suggested should be sought from the Attorney-General. Some time later, in discussions with the Department of Health over settling the backlog of pharmaceutical claims, the Auditor-General also suggested that legal advice be obtained on ways of ensuring the validity of the proposed basis of settlement. Legal advice was eventually obtained from the Attorney-General, and attention was drawn to section 98c (1) (b) of the Act. It was noted that it does not authorise the making of payments. It only allows the Minister to determine conditions subject to which payments otherwise authorised by the Act can be made. The Department has advised the Auditor-General that on receipt of legal advice advance payments were suspended immediately and action was to be taken to amend the National Health Act. I am not sure whether these amendments include the appropriate amendments resulting from the circumstances with which I have just dealt. I am delighted to see the Minister for Health (Dr Blewett), who is at the table, nodding in acknowledgment.

The fact is that advance payments have been made without appropriation in contravention of section 83 of the Constitution, which states that no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law. If there were a department in breach of the Constitution, I would have thought that as soon as that was known this House might have been advised. I would also have thought that that would have been emphasised in what the Minister had to say in introducing these Bills. That is, of course, a very serious matter. The Minister, as the person ultimately responsible, is indeed responsible for that, as are the officers under him.

Sitting suspended from 6.31 to 8 p.m.