Transcript of Interview - With David Speers on Sky Lunchtime Agenda - 11 April 2011
View by date:Previous Ministers
E & OE – PROOF ONLYTOPICS: PATHOLOGY INDUSTRY DEAL, BUDGET, PLAIN PACKAGING OF TOBACCO
David Speers: Well, on the issue of the Budget though, the government, of course, isn't going to be including the carbon tax details in next month's Budget; it won't have many of the details worked out.
What the carbon price will be? How it's going to compensate households? And how it's going to compensate industry? All of that is being worked out with industry and with its multi-party committee, the Greens and independents.
So in the meantime it wants its focus for this Budget to be on the tough spending cut decisions that it must take; and one area where the axe is set to fall is in health. There's speculation the government will be cutting funding for medical research.
It's also announced this morning that it's not going to be spending - it's going to be cutting spending by more than half a billion dollars on pathology services after a deal that's been struck with the pathology industry.
To tell us more about that and also her ongoing battle with the tobacco companies over the government's efforts to introduce plain packaging of cigarettes, I spoke a short while ago to the Health Minister Nicola Roxon.
Minister, thanks for your time.
Nicola Roxon: It's a pleasure.
David Speers: You've brought the cigarette package as well; we'll get to those in a moment…
Nicola Roxon: Pretty awful, aren't they?
David Speers: But first, let's start with pathology. Can you now tell us a bit more about this deal that's been struck with the industry - it's going to save the Budget quite a lot of money - what does it involve?
It's been a very constructive engagement; we've been able to negotiate over half a billion dollars worth of savings which just helps us keep the health expenditure a little bit more sustainable.
David Speers: Mmm. That's half a billion that the pathology industry won't be getting over the next five years, and yet, with the ageing population, clearly, demand for services - for pathology services is only going to grow.
Nicola Roxon: Well, we've been able to negotiate with them because they want stability for their sector as well. And in pathology, price and volume are obviously inter-related and they can see that their volumes will increase with the ageing population of chronic diseases.
And we need to be able to make sure that we can get some benefit from that, that large numbers of common tests, being able to have their price brought down; looking at other ways that new tests might be able to be funded.
We've already got some runs on the board in this area; our changes to legislation which means that there's an additional one thousand collection centres across the country - mostly in rural and regional Australia - is delivering better access for patients, which means it's delivering more services and tests that pathologists are providing. But we have to make sure that's done in a sustainable way so it's…
David Speers: But this is primarily achieved by the industry reducing the cost of some common blood tests.
Nicola Roxon: Yeah, it's done through negotiation with them. We've said that we understand that the costs will grow, but they need to grow in a sustainable way. And you've got some very big players in the pathology industry who've said, look, it's better for us to have stability for five years, even if it means we have to take a little bit of a cut for what we were expecting.
And you've seen our government do that now in a lot of different areas; in the pharmaceutical area, in the negotiations with the pharmacists themselves, and now in pathology.
We've been driving that pretty hard because we want to make sure that every dollar we spend in health is well spent.
And we have an enormous range of pressures and requests for new spending which, ultimately, we need to be able to meet as many of them [inaudible] can, where we can see that they would benefit the community.
David Speers: Now, you're also targeting medical research for some spending cuts, as well?
Nicola Roxon: Well, obviously I'm not going to announce today items that may or may not be in the Budget. I know we're in this period where for a month every journalist is going to ask and they're going to get the same answer.
The reason we've announced the pathology saving today is once those negotiations were complete, because some of the providers are publicly listed, a declaration needed to be made to the Stock Exchange, but…
David Speers: You had to announce it. But on medical line of research, the government is signalling that this is an area you're going to cut; the industry clearly knows the cuts are coming; they're planning nationwide rallies tomorrow to protest against it…
Nicola Roxon: Well, I do need to correct you there; the government is not signalling that. The government is signalling that every bit of health expenditure is being closely examined by the government, every bit of it.
We spend billions and billions of dollars, not just in research, but in hospital expenditure, in GPs, in funding allied health services, in funding medications, in funding screening tests. We're looking at each and every dollar that's spent in those areas, and the only point I've made publicly is that research is not exempt from that examination.
David Speers: Well, do you accept the point that leading medical researchers make, including Professor John Shine, the head of the Garvan Institute for Medical Research, that every dollar you spend in medical research saves you money in hospitals down the track? This is about preventing people having to end up in hospital.
Nicola Roxon: Well, I think that's absolutely the great promise of research, and we've seen some fantastic innovations in Australia. And we spend a lot more money in research than we spent when we first came to government, but I can't tell John Shine, as much as I respect him and many of his colleagues, that that means that researchers are exempt from an examination of any budget process when we need to go through and say, well, how do we fund other commitments that the public is pressing us for in mental health? How do we make sure that we can provide access to new drugs when they come up through the process for Cabinet to consider? How do we make sure that when researchers discover the fabulous way for us to do a bowel-screening test to prevent cancer that we can actually fund the screening test?
There's no magic pudding. I can't make all of these sums add up without looking carefully and forensically at every bit of expenditure.
David Speers: But this argument that he makes though, that you spend money in research, you save money - perhaps more money - later on in hospitals. Is that right?
Nicola Roxon: Well, I think it is absolutely proven to be right in many cases where there are wonderful breakthroughs and where there's the research that needs to be done to enable those breakthroughs. In other times we spend a lot of money that can't deliver that. That's the nature of research.
But nevertheless, we still have competing demands and they come across service [inaudible] and research, prevention, how you spend money early in the system so you actually don't have to spend as much later in the system. And of course we factor all of that in to our Budget considerations.
David Speers: Let's have a look at the plain packaging to cigarettes; they…
Nicola Roxon: They're pretty yucky…
David Speers: … they don't look pretty…
Nicola Roxon: Yeah, they don't…
David Speers: They don't look pretty.
Nicola Roxon: … they're not meant to.
David Speers: That's the whole point…[inaudible] … tobacco industry is now though planning on taking the government to the Federal Court. It wants to see legal advice that you've got about your Constitutional footing for doing this, for taking - not allowing a legal product to use its trademark.
Why won't that advice be made public?
Nicola Roxon: Well, we haven't made any different decision to the decisions that are always made that we don't release legal advice; that's normal. We have a legal professional privilege. The tobacco companies have made absolutely clear that they will take legal action at each and every point that they can. So whether it's to see our advice, whether it's an FOI request, whether it's challenging the legislation, whether it's internationally dealing with trade laws and others.
But we have to be able to, as a government, make decisions that are good for the public health of the community. We've just been talking about ways you can save money in the health system. If we didn't have to treat thousands and thousands of people from smoking-related illnesses every year, we would save a lot of money.
David Speers: But the…
Nicola Roxon: We - and we believe that all of those obligations to protect the public's health outweigh any arguments that the tobacco companies might have about their particular trademark usage.
David Speers: But has this ever been done before; a legal product not being able to use its trademark? Has it happened ever?
Nicola Roxon: Well, we saw the same arguments or similar arguments in the last couple of decades when we made a decision to stop advertising tobacco products, when we made a decision that they couldn't sponsor sporting events, when we made decisions that they wouldn't be able to be sold where, you know, children could see them displayed in shops.
David Speers: But this is a…
Nicola Roxon: This is just…
David Speers: … much bigger step though…
Nicola Roxon: This is - well, I don't think it is; it's…
David Speers: This is a - no, this is a much bigger step; it's about their product not being able to carry their trademark.
Nicola Roxon: It's a different step; I don't think it is a bigger step. I think if you look back and see when the first decisions were made to stop advertising, they were regarded as very radical steps.
This is a big step, I'm not downplaying that, but I think it's just part of the inevitable attempts for governments to try to reduce the harm caused…
David Speers: If…
Nicola Roxon: … to Australians from smoking. It's no…
David Speers: If harm is so great - if the harm is so great and this is such an evil product that you've got to do all this, a lot of people say, why don't you make it illegal?
Nicola Roxon: Well, I think if you were, starting the country again and you had no laws and you were working out which products would be legal and which ones wouldn't, and you knew what we now know about tobacco, there is no way this would be a legal product. But the truth is it is currently legal. We have a lot of people who are addicted. We think that this is one way of trying to stop new people becoming addicted and that's a big part of our focus.
David Speers: But why don't you make it illegal now? What's the argument?
Nicola Roxon: Well, I think the argument is just accepting reality and accepting history. It's not because I, as Health Minister, think it's a great product. I would be happy if no-one ever smoked again here or around the world, but I don't think we're going to be able to achieve that.
And we have taken advice on what are the next steps. This is part of a comprehensive package; we put up the excise last year; we've been running social marketing campaigns; we're targeting the Indigenous community where the smoking rate's very, very high; and we think this is one way of making people really look at these very graphic and ugly health warnings and hopefully stop some of the young people who are taking up smoking becoming addicted.
David Speers: Do you think we will reach the point one day where smoking is banned in Australia?
Nicola Roxon: I don't think we'll reach that in my lifetime; certainly not my lifetime as the Health Minister. And realistically, we live in a free country where, as you say, it's a legal product; we have to accept that. It's legal, but it is deadly. There is no safe amount of tobacco that you can smoke when we know that every single cigarette gets you closer to cancer.
David Speers: Is this going to drive a black market though? This sort of stuff people aren't going to want to pay a lot of money for something like that. Is this going to drive a great black market in cigarettes?
Nicola Roxon: Well, I don't think so. I know that that's what's being alleged, and I've certainly been talking with my colleagues as well to make sure that we take any necessary steps in Customs and elsewhere to make sure that we can jump on any sort of illicit trade that might grow from this.
But I can tell you people might be comfortable about this and tobacco companies might complain, but even smokers - I haven't met one who hopes that their child will become a smoker. So I reckon this is a good thing for us to be doing and we're determined to fight it everywhere we need to.
David Speers: Health Minister Nicola Roxon, thank you.
Nicola Roxon: Pleasure.
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