Trade figures, US-Australia FTA, PBS, industry assistance, leadership Craig Emerson - Shadow Minister for Innovation, Industry and Trade

Doorstop Interview

Transcript - Hyatt Hotel, Canberra - 23 May 2003

EMERSON: Today the Minister had an opportunity to explain Australia's appalling trade performance. Figures out today show a 10 per cent fall in Australia's merchandise exports in the three months to March. Even more disturbing than that, a 24 per cent dive in our exports of manufactured goods. Mark Vaile is saying ‘Oh, it's all because of the drought'. Well, point one, the drought doesn't affect our exports of manufactured goods. But he has made the point that Australia is heavily dependent on primary commodities. It sure is, because this government has returned Australia to a farm and a quarry. Last year primary commodities accounted for 63 per cent of our merchandise exports, compared with 59 per cent in the last year of Labor. This government has failed to continue the diversification of Australia's export base begun by Labor and is returning Australia to a farm and a quarry.

I understand Mr Vaile also provided information from the negotiations in Hawaii on the Free Trade Agreement. He has confirmed that the Pharmaceutical Benefits Scheme remains on the negotiating table. That is our information too. Information gleaned from behind closed doors because these negotiations are secretive. If it's such a good trade deal why all the secrecy? The Pharmaceutical Benefits Scheme is firmly on the negotiating table, along with Australian local content rules for film and television, along with our quarantine service. Australians need to be, and deserve to be, involved in the discussions of what it is that we are being expected to concede to get these mythical benefits of $4 billion from this so-called Free Trade Agreement with the United States.

JOURNALIST: Ralph Ives talked about the two issues they wanted information about were transparency on how the PBS works and the way its pricing system works. He certainly made it clear last time that they're not seeking to abolish the whole system. Isn't that fair enough for them to seek information? That doesn't imply that something is going to be traded away.

EMERSON: The seeking of information is for one purpose and that is to negotiate on the Pharmaceutical Benefits Scheme. I've not asserted that in these negotiations the PBS will be abolished altogether. My concern is that changes will be made to the PBS that lift prescription costs for Australian families. The Government is trying to get exactly that measure through the Senate. This could well be a back-door way of getting what the Government has failed to get through the front door of the Senate, and that is higher prescription costs for Australian families. The discussion about transparency and innovative drugs is actually a discussion about the reference price. The reference price is a mechanism used in the Pharmaceutical Benefits Scheme to keep the cost of new drugs affordable. That's our PBS, that is how our PBS works and it delivers low cost prescription medicines for Australian families. The last thing we need is the Americanisation of our pharmaceutical system, along with the Americanisation of our health system, which is already well under way from this Government through its plan to destroy Medicare.

JOURNALIST: .. [inaudible] … couldn't get through the Senate, though. … [inaudible] … required legislative changes to implement something agreed in a treaty negotiated between two executive governments.

EMERSON: The approach of this Government will be ‘This is a take-it-or-leave-it package, it is a negotiated package' and the Senate will be called upon to pass the enabling legislation on the various issues on which we have conceded. If the PBS is not really on the negotiating table, why are they talking about it? Why are they examining reference pricing, so-called transparency? The answer is because they do want to make changes to the Pharmaceutical Benefits Scheme and they want to make those changes because giant American drug companies don't like our PBS. They do not like our system because it suppresses their prices here in Australia and they are concerned that this might catch on, that the world's best pharmaceutical scheme, that keeps prescription costs low for Australian families, might be adopted by other countries to keep prescription pharmaceutical costs low in other countries too. That's why the American drug companies are concerned and that's why it remains firmly on the negotiating table.

JOURNALIST: Then Labor in the Senate would … [inaudible] … amend the Free Trade Agreement … [inaudible] … would it accept or reject it?

EMERSON: Our position is that if this agreement is not completed by the time a Labor Government is elected we will review the agreement to ensure that it is in the national interest. All Australians need to know that the Pharmaceutical Benefits Scheme is actively part of the negotiations between the Australian and US negotiators and has been in the most recent negotiations in Hawaii.

JOURNALIST: Bob McMullan told us this week that the Labor Party has a three-person expenditure review committee to … [inaudible] … all the programs in each policy area, where they can be cut to gain funding for new programs. Have you got any suggestions in the trade and industry area where policies can be cut?

EMERSON: There have been drastic cuts already, I must say, in the trade and industry area done by this Government. The successor to Labor's Factorf program for the pharmaceutical industry, that was called PIIP, and its successor announced in the Budget is a PIIP-squeak, it's a very small program. So this Government has done plenty of hatchet work in the trade and industry portfolio already. In terms of the Export Market Development Grants scheme, it capped that scheme at $150 million in 1997, reducing its real value by more than 11 per cent already.

JOURNALIST: So you can guarantee that a Labor Government wouldn't make cuts in the industry programs, the industry assistance programs, in order to fund its policies in health, Medicare …

EMERSON: We will go through the industry portfolio with a fine tooth comb to see if there any areas where there is wasteful expenditure. But I did already announce that a Labor Government would scrap the Howard Government's secretive Strategic Investment Coordinator process which has already committed $650 million. There is a very large saving already identified by Labor. That is not the way that we consider scarce taxpayers money should be dished out.

That is, again, typical of this Government, in a secretive process behind closed doors where the Government refuses to release the results of benefit-cost analyses for these major projects. If they're such good projects, why not release the analyses? The Government says, ‘Oh, because that might mean that companies wouldn't apply for multi-million dollar government grants'. Well, we say again that the Australian taxpayers have a right to know how their taxpayer dollars are being expended and the secret corporate welfare of this scheme, the Strategic Investment Coordinator scheme, is not the way to do it.

JOURNALIST: Is that a pledge, that Labor in office would publish the cost-benefit analyses?

EMERSON: Yes it is.

JOURNALIST: Do you have any views on Graham Richardson's comments on the Labor leadership that Simon Crean could face a challenge in a month and the reports on the comments he made at a Victorian Labor Unity meeting?

EMERSON: I didn't hear much about it. Apparently he's made some clarification today, but I really am not in the loop on that. I've had my head down and bum up looking at these trade statistics, which are pretty bloody awful.

(ends)