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Wednesday, 30 August 1989
Page: 593

Senator CHILDS —Could the Minister representing the Minister for Housing and Aged Care inform the Senate of the recent Pharmaceutical Benefits Remuneration Tribunal (PBRT) decision? What is the relationship between the Tribunal and the Government? What has been the Government's response to the Tribunal's decision?

Senator COOK —On Monday of this week, 28 August, the Pharmaceutical Benefits Remuneration Tribunal delivered a final judgment on the levels of remuneration for pharmacists under the pharmaceutical benefits scheme (PBS). The PBRT has called for a major restructuring of the PBS and the way in which pharmacists are remunerated. This is not a Government decision. Nor does the Government have the power under the legislation to overturn or alter the decision.

Senator Walters —Ha, ha!

Senator COOK —Senator Walters ought to understand that, because she has been obfuscating this point. It is an independent tribunal and, by sullying its independence, I believe Senator Walters is indeed committing a libel. Most pharmacists, unfortunately, and some journalists, do not understand the independence of the body.

Senator Stone interjecting-

Senator COOK —Stop prattling away, Senator Stone. The PBRT reached its decision after a two-year inquiry and 600 submissions. Contrary to some reports, the Government submission did not suggest any preferred fee level but rather concentrated on the need for structural reform. The proposal is entirely the PBRT's affair. It is effectively the umpire's decision. The Tribunal recommended substantial changes to the system of payments because the subsidies now provided to pharmacists to cover the costs of providing PBS drugs were not supported by the data supplied to the Tribunal. In other words, the PBRT has found that the payment system to cover the costs of dispensing PBS drugs was excessive. As a result, the payment per service will be reduced by a total of $1.05 per item in three stages over 12 months. The abolition of the 25 per cent mark-up on PBS items is included in this figure.

Earlier this year the Minister, Peter Staples, and the Pharmacy Guild of Australia were on the point of finalising negotiations to present a united submission to the Tribunal. However, at literally the last minute, the Guild broke off negotiations and decided to go it alone. This is the result of that. Had the Guild accepted the Government's offer to reach a negotiated agreement, there would have been scope for overcoming several of the major structural problems in the PBS. Unfortunately, the Guild strategy to go it alone has backfired badly for its members.

I remind the Senate that the PBRT was established under the Fraser Liberal Government. In fact, this very independent body was a key element in the former Liberal Government's thinking when it set up the PBRT. As Mr MacKellar said when introducing the PBRT legislation in 1981:

The Government believes that there are a number of advantages to be gained by establishing a public tribunal. First, it will remove from the political arena the question of the level of fees paid to chemists and for dispensing of pharmaceutical benefits. Both the chemists and the Government will be bound by the tribunal's decision. Secondly it will provide a forum in which all interested parties may publicly argue their case whilst ensuring that the levels of chemists' remuneration are determined by an independent body. Thirdly, it will remove the need for the Government to finance cumbersome and costly inquiries of the sort that have been conducted since 1964-1965.

I conclude by saying that the door remains open to pharmacists to resume useful negotiations with the Government at any time. In fact, it is my understanding that the Minister responsible, my colleague Peter Staples, is meeting the Pharmacy Guild of Australia tomorrow. If there is a postscript to my concluding comment, it is the report of the Tribunal. Last night we saw a senator in this place from the Opposition ranks, who had not read this report, leap to comment and editorialise about it. This inquiry has lasted a long time and taken a lot of submissions. The very least the critics can do is actually read what the inquiry found.