Stem-Cell Research, Pharmeceutical Benefits Scheme, Private Health Insurance & Medical Indemnity

Stephen Smith, Shadow Minister for Health

Interview - Meet The Press

Transcript, 7 April 2002

E & OE - PROOF ONLY

PAUL BONGIORNO: You're on Meet the Press. And welcome to the Shadow Minister for Health, Stephen Smith. And to the panel, Louise Dodson, the 'Age', and Anna Patty, the 'Daily Telegraph'. Mr. Smith, good morning.

STEPHEN SMITH, SHADOW MINISTER FOR HEALTH: Good morning, Paul.

PAUL BONGIORNO: Do you believe that the stem cell compromise reached on Friday was taking the enlightened road?

STEPHEN SMITH: There is one crunch issue in this debate, Paul - do you or do you not allow stem-cell research on spare or excess embryos produced for the purposes of IVF. And that's where Kevin Andrews tried to put the best possible gloss on it. But there's no middle ground on that issue. You either say, yes, you do allow research on spare or excess embryos, or you don't. And the majority view of the Parliamentary Committee which Kevin chaired, was that you should. Kevin's strong view was that you shouldn't. And he put that view to the Cabinet when he took the submission in February to the Cabinet. And the clear disposition of the Cabinet when it considered it was to agree with that ban. And since then, as a consequence of the position which Simon Crean and Federal Labor has taken the position which the state premiers have taken, and the position which the research community generally has taken, the PM has been moved fundamentally on this issue and saw what I regard as a welcome result on Friday with cooperative federal/state approach to allowing research on spare or excess embryos produced for the purposes of IVF.

PAUL BONGIORNO: Well, do you agree with John Howard that there is no moral difference between allowing the embryos to die or to use them for research?

STEPHEN SMITH: The key point is this - the Australian community accepts IVF because that is for the purposes of creating life and assisting people who want to bring babies into the Australian community but need technical assistance to effect it. In the course of that creation of life, spare or excess embryos are produced. They ultimately are destroyed. The question is - do you sensibly allow research for the benefit of extending life, saving life, or improving life on those embryos? I say yes. Simon Crean says yes. And now, sensibly, the PM and the state premiers say yes. And we'll have cooperative federal/state legislation to effect that under stringent controls and tight ethical, moral and regulatory boundaries.

PAUL BONGIORNO: Will it get through the Federal Parliament?

STEPHEN SMITH: I believe it will. There is a test here for John Howard and the test is - will he argue for the position which the premiers and the Commonwealth agreed to on Friday and will he see that is the majority position adopted by his own party? We've seen a number of his senior colleagues already in the course of the past couple of days, whether it's the Deputy PM Anderson, the Federal Finance Minister, Senator Minchin, or Tony Abbott, whose enjoying having two bob each way, raise question marks about their own support for the Government's general approach.

LOUISE DODSON, THE 'AGE': Mr Smith, on the Labor side, the Shoppies union boss Joe de Bruyn has signaled he'll be lobbying hard on Labor MPs and senators to oppose this legislation. How many, do you think, that would effect?

STEPHEN SMITH: Well, underlying all this debate has been Federal Labor, right from the outset, saying, "We believe this is an area where a conscience vote ought to apply because you go to strongly held views about the creation of life and the moral, ethical and values consideration which flow from that." So we've said, right from day one, led by Simon Crean, there ought to be a conscience vote on this issue.

LOUISE DODSON: But is it a conscience vote if the union is telling people how to vote?

STEPHEN SMITH: Well, I don't believe the union will be telling people how to vote. The union and other members of the party will be expressing to members of parliament - state and federal, Liberal, Labor, Democrat, Greens - their views on an issue on which they have strong views and deeply held moral, or ethical and even religious views. But in the end, individual members of parliament will need to make their decision the clear majority view of the federal parliamentary party is to support research for stem cell purposes on spare or excess embryos produced for IVF purposes and limited to that basis.

ANNA PATTY, THE 'DAILY TELEGRAPH': Mr Smith, scientists including our leading stem-cell researcher, Alan Trounson from Melbourne University, say that the ban on therapeutic cloning will lead to Australian research lagging behind other countries like the UK, where cloning is allowed. Is that a concern for us? And should we be going that extra step further to stay in the international research race?

STEPHEN SMITH: The basis of the decision on Friday enables us to be right in there in international competition. Now, the Parliamentary Committee when it considered this point, suggested unanimously a moratorium on human cloning or somatic cell transfer. And that suggested a 3-year moratorium. The proposed framework that we've seen come out of the premiers meeting suggests a review of the legislation after a 3-year period. That's the same timetable as the proposed moratorium by the Parliamentary Committee. And over that period of time or even sooner we'll have more than enough opportunity to see whether that particular technique of stem-cell research is appropriate to be used in the future or not. But the 3-year review period is consistent with the moratorium period suggested by the Parliamentary Committee unanimously on that point.

LOUISE DODSON: Would you like to see not having a 3-year ban on embryos created after April 5?

STEPHEN SMITH: Well, it's important that we put forward a framework piece of legislation in place. There is only one issue in respect of which parliamentary committee, or indeed people who are interested in this issue, have disagreed about and that is the fundamental question as to whether you do allow research on spare or excess embryos or you don't. I believe that a review period is appropriate and in the context of that review period, either in three years or sooner, given that we also have the National Health and Medical Research Council doing a paper over the next 12 months on the issue of whether you can use embryos created after the premiers meeting or not. We may well find the force of scientific research and endeavor, and the accelerating use of technology, requires that these issues are addressed in advance of three years time, and that's the point Simon Crean made before the premiers met on Friday.

PAUL BONGIORNO: Mr Smith, there's a report today that an Italian scientist has already done some human cloning and that a woman is pregnant with a genetic human clone. Does that disturb you?

STEPHEN SMITH: Paul, like you, I've only seen the wire reports of that but even the wire reports include some great skepticism as to that particular report and the relevant scientist involved. The key point is this - if the framework legislation which the premiers and the PM agreed to on Friday is adopted quickly, that sort of procedure would be correctly and rightly banned in Australia.

PAUL BONGIORNO: Stephen Smith, time for a break. When we return, we discuss the cost of getting better - prescriptions are set to soar.

PAUL BONGIORNO: You're on Meet the Press. Front page news today, Treasurer Costello forecasts a tough Budget with defence getting the spending priority. So where does that leave health? Anna Patty has some questions.

ANNA PATTY: Mr Smith, the $4.5 billion Pharmaceutical Benefits Scheme seems to be spiralling out of control. We had at 20% blowout last year. The problem is we do need expensive breakthrough drugs that are coming through, so what has to give? What should the Government be looking at to try and control costs?

STEPHEN SMITH: Firstly, this is an area where again we find with the Howard Government one story before the election and another story after the election. When Celebrex was listed, John Howard's Government, in the guise of Michael Wooldridge the former health minister, were out there saying cost didn't matter. The fact that more consumers were using it meant that more consumers were benefiting. So prior to the election, cost of the PBS wasn't an issue for the Government. After the election, we immediately see the Government, because of other budgetary problems, moving into crude cost-cutting measures which we've seen floated, so far as the Pharmaceutical Benefits Scheme is concerned. We do have to be thoughtful and careful about the long-term sustainability of the Pharmaceutical Benefits Scheme. I think there are three important public policy priorities. Firstly we do need to continue to ensure Australians have access to the best drugs at affordable rates. Secondly we need to make sure it's affordable to the taxpayer. And thirdly it is important we continue to have in Australia a domestically based pharmaceutical research and manufacturing industry. They're the three areas you need to ensure are sustained in the long term. And in that context, you can have a sensible conversation about making sure you get value for money so far as the consumer is concerned and value for money so far as the taxpayer is concerned. My great fear is all we'll see in this Budget will be crude cost-cutting measures, trying to garner the Government about $2 billion over four years, which is the public speculation which we've seen.

ANNA PATTY: It's also been argued that paying for the scheme has larger benefits for the health system as a whole, that you're actually saving costs for hospitals by paying out something like $18,000 a year for one person to have a drug like Celebrex or another anti-arthritis drug. Do you believe it's worth pumping more money into the PBS to provide that benefit?

STEPHEN SMITH: I certainly believe that's a factor which goes to the standing of the scheme. It's been in place for 50-odd years - suggested by Chifley, implemented by Menzies. It's worked very well. We need to ensure it continues to work well into the future, particularly when we see new, emerging drugs, whether they're coming off the Genome Project, or whatever. But the point you've made - that an investment in a pharmaceutical or medicine upfront can bring you a long-term benefit down the track by keeping people out of our hospitals - is a sensible criteria that you can take into account. My worry is that given the Government has got itself into general Budget bottom-line difficulties because of other areas, it simply wants to engage in what it regards as an easy-hit, crude cost-cutting measure on the PBS, which will run the risk of being adverse for Australians who get access to affordable medicines and adverse to the industry because we are in an international competition here so far as pharmaceutical research and manufacturing is concerned.

LOUISE DODSON: On another matter, Mr Smith, the Government has got a health insurance review on at the moment. Will you guarantee that Labor will keep the 30% rebate for private health insurers?

STEPHEN SMITH: What Simon Crean and I have said about the 30% rebate is firstly, as you know, all of our policies - other than the full sale of Telstra - are up for review. Secondly, the difficulty now so far as the 30% rebate is concerned, is for many families, that's now not for them a health policy measure, it's a family budget measure. And we saw with the exorbitant increases in premiums recently that what that does is put enormous pressure on families who are already struggling under financial burden. So we don't want to do anything in isolation, or generally, which adds to the pressure that struggling families are on. Having said that, in all of the commentary I've had on the 30% rebate, no-one's been out there to me suggesting the rebate ought to be extended from 30% to 40%. All the commentary has gone the other way. And we do have an issue on ancillaries. Recently in Senate estimates, we saw about 30% of the cost of the rebate - some $500 million - goes on ancillaries. And we even find the ludicrous situation where scarce health dollars in the order of $15 million to $20 million go on gym shoes and gym membership and the like. So we can, I think, have a very careful look at the effectiveness of the way in which the rebate works and its breadth. Now, the Government's review of private health insurance doesn't actually include a review of the effectiveness of the outcome. State health ministers continue to say to me that while the Government and the health insurance industry say the rebate is taking the pressure off public hospitals, they continue to say to me that they're not.

LOUISE DODSON: So Labor could take the rebate off ancillaries?

STEPHEN SMITH: As I've said, they're all under review. We don't want to do anything substantively in the run-up to the next election by way of election commitments which would add to the burden on families struggling under financial pressure. But we are entitled to look at the effectiveness of the rebate, both its scope, but also whether it is actually achieving that which the Government said. Recall that in the run-up to both the 1998 and 2001 elections, the Government said the introduction of the 30% rebate was the be-all and end-all solution to all our private and public health care problems. The events of the last few weeks with increases ranging from 16% from Medibank Private's most popular product to the 30% and 40% for some of the smaller, outlying regional funds give the lie to that argument.

PAUL BONGIORNO: Mr Smith, does Labor have any sympathy at all for the AMA's call for a national indemnity insurance scheme so doctors can afford to keep practicing?

STEPHEN SMITH: I think this is a looming crisis for us. In the run-up to the last election, we had a detailed policy which went to this issue. The Government has been dragging its feet on this issue very badly. In December last year, the PM announced a summit. Since then, all we've seen over four months has been the calling of the summit in Canberra for 23 April.

PAUL BONGIORNO: We're running out of time, but very briefly, do you have any sympathy for that? Or do you think there should be other solutions?

STEPHEN SMITH: I'm certainly supportive, Paul, of a national approach. But I think the three priority areas are that we need to get better clinical outcomes to avoid the risks, secondly we've got to ensure transparency of the prudential supervision of these organisations, and thirdly we need to be looking differently at brain and spinal injuries, which are the high-cost areas.

PAUL BONGIORNO: Thanks to our guest, Labor's Stephen Smith and our panel, Anna Patty and Louise Dodson. Until next week, it's goodbye from Meet the Press.