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Tuesday, 3 December 1985
Page: 2751

Senator GRIMES (Minister for Community Services)(10.43) —I thank honourable senators who have contributed to this debate on the Health Legislation Amendment Bill (No. 2) 1985. There is no doubt about it-Senator Walters is indefatigable. To come in here at that time of the morning and give her Reds-under-the-bed speech was, I think, a bit hard on all of us, especially those of us who were up late last night. I do not want to make too many points. The only point I make in passing is that Senator Walters is one of those people who obviously equate democratic socialism with the nationalisation of all industries. She starts from that premise and works from there. I suppose that the best example I can give to Senator Walters of the silliness of that premise is that the country in Western Europe which has had the greatest number of socialist governments in the last 50 years is Sweden. The country in Europe which has had the least is France. The country in Europe which has the greatest number of nationalised industries is France. The country in Europe which has had the least is Sweden. So the analogy that Senator Walters draws is quite false.

That is the reason why there is a millionaire in Hobart who quite openly, eloquently, and with a great deal more erudition and logic than Senator Walters shows, supports democratic socialist parties such as the Australian Labor Party. Perhaps Senator Walters ought to look to why he does so and why he supports the philosophy he does rather than just denigrating him in the way she did. Senator Walters, like some of her colleagues in the other place, then proceeded to denigrate Mr Neil Batt. At least she did not criticise his appointment as Chairman of the Commonwealth Serum Laboratories Commission in the way that people in another place did.

Senator Walters —No, I did not.

Senator GRIMES —I know that the honourable senator did not, and that is very good. If the honourable senator reads tomorrow her words in Hansard, she will see that that meaning could be interpreted. The honourable senator probably did not mean to do so, knowing that she is such a kind person, but that interpretation could be made from her statements about Mr Batt's stay in Bangladesh. Most people who read the Hansard, and, I think, even the honourable senator, when she reads it, may realise that an obvious interpretation of someone of her turn of phrase would be that she was making inferences about Mr Batt's short stay in Bangladesh. It is quite wrong to suggest that he just did not stay there because it did not suit his lifestyle or it did not suit him.

Senator Walters —I didn't say that. Look at Hansard tomorrow.

Senator GRIMES —The honourable senator should look at Hansard tomorrow, too. However, we have had our Reds-under-the-bed speech very early in the morning, a subject which has nothing to do with the legislation. I make one final point. The problem of overservicing in medicine is a problem that is common not just to Australia. If we read the debates in the United States of America, we see that there is a problem there and there is concern about overservicing. I think that Senator Peter Baume pointed out that whenever we have an insurance system, be it public or private, whereby people can insure against ill-health-I believe that they ought to be able to do so both publicly and privately as we can do-there is the possibility of overservicing in both systems.

Neither Senator Walters nor Senator Sheil produced one skerrick of evidence in general, apart from the entrepreneurial example that Senator Sheil used, that one can equate overservicing with bulk billing. The proposal that if we get rid of bulk billing, we get rid of overservicing is a nonsense. Senator Sheil knows it is a nonsense. At least Senator Sheil is consistent. He is absolutely consistent in what I call the gypsy principle-the best way to practise medicine is to cross someone's palm with silver. Therefore he is against gap insurance because that takes away the paying of that moiety which would control costs in medicine. Senator Walters, at the same time as she disagrees with bulk billing, agrees with gap insurance so that a patient does not have to cross someone's palm with silver. It is okay if it happens in the private sector but it is not okay in the public sector. That is the sort of glorious inconsistency we can expect from Senator Walters, but I think that we can put up with that.

To get back to the legislation-I will be the only person who has done that this morning-Senator Peter Baume raised some matters and put the Opposition's case for opposing clauses 10 and 11 of this Bill. These are the clauses which deal with the powers and functions of the Commonwealth Serum Laboratories. I think that the gist of what he said was that the Opposition did not see any need for the increased powers and that they would give CSL an unfair commercial advantage over its competitors. Senator Peter Rae, by interjection last night, extended that argument. He said that CSL had such an advantage in that it did not have to pay rents and rates. That is quite false.

Senator Walters —He didn't say that.

Senator GRIMES —Senator Peter Rae did say that last night by interjection, but it is quite false. In fact, CSL does pay rent to the Commonwealth and it pays rates to the Woodend Council in Melbourne of about $760,000 per annum. The knee-jerk response from people such as Senator Rae that CSL has a terrible advantage over everyone because it does not even pay rates or rents is nonsense, and I think it should be recognised as such. CSL, in accordance with its legislation, is required to operate profitably, and it has to operate profitably in a highly competitive industry. This legislation and these powers are being introduced to increase its capacity to do so. To suggest, as Senator Walters suggests, that this is the first step towards CSL taking over the whole of the pharmaceutical industry in Australia is mind-boggling. All I can say is that it is absolutely mind-boggling to suggest that CSL will take over Merck, Sharp and Dohme (Aust) Pty Ltd, Bayer Aust Ltd and all the large pharmaceutical companies. It is just the product of a very fevered imagination. I suppose that one can make assertions and extreme statements such as this when in opposition, but they are just not true. Nobody in the pharmaceutical industry would believe such a ridiculous statement and, certainly, no one in this Parliament should.

CSL has to compete in a highly competitive industry. It has to pay a dividend to the Commonwealth and carry out research and a number of functions related to the production of and trading in pharmaceutical products. It provides technical assistance; it is a reference centre; it provides facilities in relation to pharmaceutical products and other functions of that type. Because it is a statutory authority it operates under a broad range of constraints. A lot of those constraints do not apply to its competitors. At present it can become involved only in producing pharmaceutical products for therapeutic use. When resources for production of those therapeutic goods are not in use, they remain idle. That is not sensible and it puts CSL at a considerable disadvantage with its competitors.

If under the existing legislation CSL considered it necessary to expand its activities in any area, such expansion would require large amounts of capital from within the Commission and from the Commonwealth. If the Commission is authorised to form companies, buy shares and form partnerships, any expansion could be achieved at a lesser cost and in a shorter time than at present. We want to remove the difficulties encountered by CSL in its present operations and to define its future role. When CSL increases its viability it will be able to increase the amount of internal funds spent on research and development and it will be able to provide a greater return to the Commonwealth, which is a sensible approach.

Nobody here is suggesting that CSL should not continue operating. It has resources lying idle and it misses out on business opportunities because those resources cannot produce non-pharmaceutical products. For instance, those facilities could be used for the production of enzymes used widely in industry for purposes such as detergents, paper manufacture and the conversion of starch to sugar. They could be used for the manufacture of biological control agents for agricultural purposes and for the development of micro-organisms for the degradation of pollutants that are a threat to the environment. In the past CSL has been approached to use its excess capacity to produce all of those above products, but it was unable to do so because of legislative constraints.

The changes we are introducing in this legislation will decrease the cost to CSL and the Commonwealth of maintaining those resources in an idle state. Fixed overheads therefore, will be spread over a wider base, which will help reduce the cost of pharmaceutical benefit items, particularly the cost of national interest activities which CSL is required to undertake by the Government. The staff will increase their expertise and knowledge, which also can be used by the Commonwealth when required. I would have thought that was a function which would have been welcomed by Senator Sheil in the very sensible reference he made to the fact that we need a pharmaceutical industry and a pharmaceutical capacity for defence and security purposes as much as anything else.

Clause 11 alters the powers of the Commission. It provides that CSL can form companies to buy and sell shares and enter into a partnership. These powers will enable CSL to take advantage of business opportunities and to be competitive in a highly competitive industry. Certainly there may be worries that CSL could get involved in exercises of an undesirable type, as the Australian Dairy Corporation did in the past with its Asian subsidiaries. To cover this, the amendments incorporate the recommendation of the Senate Standing Committee on Finance and Government Operations. Those recommendations are that the Minister approve the creation of a subsidiary; the transaction is to be reported to Parliament within 15 sitting days; and the powers of the subsidiary cannot exceed those of CSL without the approval of the Minister. Approval for the extension of a subsidiary's power can be given only when it is considered necessary for CSL to carry out its functions. If the subsidiary's power exceeds that of CSL, the Minister can direct CSL to dispose of sufficient shares so that it does not have effective control. It is required to report regularly to keep the Minister informed of its activities. Any subsidiary will be covered by State companies legislation.

CSL will continue to have the benefit of a Commonwealth safety net for its financial operations, and the reasons for that are clear and, I think, known to everybody. It is required under legislation to be commercially viable. It is owned by the Commonwealth and it carries out its activities when directed by the Minister. Any apportionment between commercial and non-commercial activities is difficult and each activity is in a constant state of change. As part of its commercial activities it is involved in unprofitable activities considered to be in the national interest, such as the production of anti-venoms for snakes and spiders. It uses its profit commercial activities for research into areas where Commonwealth funding is insufficient or not available. An example given is blue tongue research. It is owned by the Commonwealth and it is backed by the Commonwealth. No one hides that fact, but we believe that Commonwealth statutory authorities of this type in this area should be vigorous and competitive but should not have too many disadvantages as distinct from those of its competitors. Any small advantages that CSL has are outweighed surely by the constraints not forced on its competitors, such as government control and the accountability provisions, which are considerable.

I think most of the points that have been raised by Senator Peter Baume and other members of the Opposition, as to the activities of CSL and the extension of its powers and its capacities, have been answered effectively in this place and in the other place and for that reason I would commend those changes and those clauses to the Senate. The fear that this creeping nationalisation will destroy the pharmaceutical industry in Australia is just not founded and certainly is not backed up by any evidence given by the Opposition.

Changes to the Health Insurance Commission's operations to cope with the Australia Card situation also will, as I understand it, be opposed by the Opposition because it does not see the need for the amendments now and it would prefer to wait for the outcome of the Joint Select Committee on an Australia Card, which is looking at the whole problem of the Australia Card. It is obvious that the Australia Card has proponents and opponents on both sides of Parliament and in the community itself. I am interested in the fact that polls consistently show that such a high number of people in the community are in fact in favour of the identity card. That was certainly a surprise to me and to many people in the community. The legislation has been introduced merely to enable the Health Insurance Commission, which is the body which was picked to look at the introduction of such a card, to undertake investigative and planning work so that if the Parliament decides to introduce the card, it can be fully operational within a reasonable time-by, I think, 1 July 1989. We want to introduce the card by March 1987. It is thought that between now and March 1987 is the minimum possible time which would be needed for all the planning, development and implementation work to be undertaken. A delay until after the Joint Committee has reported would mean impossible lead times and a delay in the card's operation.

If we are to have a sensible approach to this or anything else by the Joint Committee we also have to look at what is involved in the introduction of such a card. We also have to look at the difficulties that will arise in the introduction of such a card. The amendment we are introducing here will authorise the Commission to plan for the card. The experience of the Commission and its investigations will be of interest and of use to the Joint Committee. These changes do not authorise any form of implementation of the proposal. That is specifically not allowed. The legislation allows for no more than planning, and for that reason we have introduced a sunset clause. It means that the amending legislation will cease to have effect after December 1986 if the substantive legislation has not been enacted by then. To enable the Australia Card program to be adequately defined, it is necessary that the Health Insurance Commission be authorised to undertake the necessary planning activites to identify the requirements more clearly. The result of this work will be reflected in the substantive legislation which is expected to be available for full parliamentary debate next year.

The changes to the offences and disqualification provisions, which are supported by the Opposition, I believe are sensible proposals. They, in fact, overcome some difficulties in the existing legislation which I think are recognised on both sides. Particularly, there is a perception that practitioners can be disqualified for what are perceived as very minor offences. The blame for this sort of activity is directed at the Minister for Health, whose powers to moderate the mandatory three-year period of disqualification are very restrictive. I think the current legislation is aggravating Government and professional relations and it is important that after consultation with the medical profession we introduce these changes.

Similarly, changes to the 3B certificates have been recognised as necessary by people on both sides of the Parliament and outside Parliament. In the light of Senator Walters's comments I think it is important to remind honourable senators that the original 3B certificates were introduced after considerable consultation with the Australian Medical Association. The certificates were introduced in the way they were, with the decision being left to the doctors about what was an acute illness and what was necessary for long-stay treatment, at the urging of the medical profession. In fact, we wanted to put in some definitions for the guidance of the medical profession but the medical profession said: `No, we do not want that. We want it introduced so that all the say is ours. We do not want restrictions and we do not want the capacity to sign them retrospectively, because the reason the Government is introducing it is for the well-know abuse of the system which exists, particularly in Sydney'.

The changes we have made to enable them to be filled out retrospectively and to enable the Department of Health in cases like terminal illness, for instance, to declare that people should continue to be eligible for the payment of benefits are sensible changes. They are changes that, again, have been made in consultation with the medical profession. They are modifications which we all realise--

Senator Walters —We are not objecting to that.

Senator GRIMES —I know. They are changes which we all realise are sensible.

Senator Walters —Take the advice of the members of the profession and get rid of bulk billing, because they do make sensible suggestions.

Senator GRIMES —I am pointing out that the original 3B certificates were introduced on the advice of the medical profession and after considerable consultation with the medical profession. They were introduced in the form they were introduced and with the rules that were introduced because that was the way the medical profession wanted it. Sure, the medical profession now says that it is wrong and it is not working properly. We accept that, so we change it. The medical profession en bloc is not opposed to bulk billing in the way that Senator Walters says. To suggest that by getting rid of bulk billing we will get rid of overservicing is nonsense, and Senator Walters knows it is nonsense. It is absolute nonsense.

Those honourable senators who support the legislation completely I thank very much. Those who only partly support it I grudgingly thank for their contributions to this debate. I hope that the Bill now has a speedy passage so that we can get this fairly small omnibus Bill through the Parliament. From 1975 to 1983, twice a year every year we had major amendments to the health legislation in this Parliament. We had seven health insurance systems in that whole time. Every year I used to say to the then Government, `You will have to make huge amendments like this again next year' and every year it did. These are only very small amendments and they relate basically to CSL. If only all our health legislation was of this type life would be much easier for us.

Senator Walters —That is why the costs are out of control.

Senator GRIMES —There are no costs out of control and also the Reds have all gone from under the beds. If this legislation does nothing else, it gives Senator Walters the opportunity once or twice a year to pour out all that stuff about reds under the beds. I think that has a therapeutic effect on Senator Walters even though it might be disastrous for some of us. I thank honourable senators and hope that we can get on with more important business.

Question resolved in the affirmative.

Bill read a second time.

Referral to Committee