Bega Cheese Co-op, PBS, Budget, Private health insurance, Leadership, Telstra

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Bega Cheese Co-op, PBS, Budget, Private health insurance, Leadership, Telstra



Pambula-Merimbula Golf Club

Wednesday, 22 May 2002

2.15 pm


SUBJECTS: Bega Cheese Co-op, PBS, Budget, Private health insurance, Leadership,



Well, it is a great honour for me to be here with Gary Nairn today, the Member

for Eden Monaro, and to announce that under the dairy industry Regional Adjustment

Program the Government will be making a grant available to the Bega Cheese Co-operative

of about $770,000. This is the scheme under which, as a consequence of dairy

deregulation that affected many dairy farmers in the area, and the Government

set up a structural adjustment package to help them. Out of that package, a

grant will be given to the Bega Cheese Co-operative. It will enable it to modernise

equipment and start new lines, and contribute to, we think, 48 jobs. And it

is a successful indication of the way in which adjustment has worked in this

case. So, Gary has been very assiduous in pushing the case of Bega. Bega has

been a great success story. This is a grant to help it be even more of a success

story, and it is good news for local jobs.


Mr Costello, I noticed in your speech you whacked the press about seven times

and only Simon Crean twice. Which one do you perceive as the greater enemy

in terms of your career?


I think you are being, you know, a little sensitive there. I do not think I

whacked you more than three or four times. So, you did count, did you? No, I

think that when we have the opportunity, I think, to explain to people the Government’s

thinking, particularly in relation to the Intergenerational Report and making

social services sustainable, I get a very strong response. And people say, they

often say to me, why don’t we hear this kind of thing? Why don’t we read it?

And if the press of Australia, who I know to be good-minded people, fair in

every respect, are able to present the facts, I think they would be very interested

in hearing it.


Presumably these are only the first steps to tackle this sustainable [inaudible]?

What areas come later?


That is right. I would not say for a moment that this problem of making our

social services sustainable for 20, 30 and 40 years will be solved in this Budget.

I would be the last person to say that. But the point I am making is, if we

can explain the nature of the challenge, if we can start taking steps now, the

steps which we will have to take later will be less significant. Now, let’s

go to pharmaceuticals. We have got a number of measures in this Budget on pharmaceuticals.

I mean, the one that has attracted most attention is the co-contribution for

pensioners going from $3.60 to $4.60. But we also had other measures. For example,

what we want to do is, we want doctors to have built into their software default

options so they prescribe the generic drug rather than the brand drug. We want

to enlist the support of the pharmaceutical manufacturing companies to actually

indicate that prescription of these drugs is in many cases on restricted conditions.

That is, that a pharmaceutical may be admitted to the PBS, that it may be capable

of prescription to a wide proportion of the public, but it is only admitted

to the PBS if it is to be prescribed to a narrow group of the public. And we

want the drug companies to go around and to make that entirely clear. We have

got measures in this Budget, and we introduced it, where you have got to present

a Medicare card in order to get prescriptions, so that people cannot buy prescriptions

for others. So, we have got a whole range of measures that are coming together.

And, alone, these are not going to rescue the sustainability of the Pharmaceutical

Benefits Scheme. But my point is this: If we start now while there is time,

we can make smaller steps. If you are going to leave it, the steps will just

become more and more drastic.


Are you prepared to talk to Labor and the Democrats about their opposition

to the changes in the PBS and disability pension?


Well look, if Labor says that it wants to get responsible over Budget measures,

we would be interested to hear from them. I think Labor has been thoroughly

irresponsible. Let me remind you, because I do not think this has come across

in the press either, that there are numbers of drugs, in fact commonly used

drugs, which retail below the co-payment ceiling. Right. For general people,

the co-payment ceiling is going to be $28.60. It has gone up $6.20. And I have

read in the press, oh this means that Ventolin will go up $6.20, families will

have to pay $6.20 more for Ventolin. Ventolin retails at about $17, $17 or $18.

the price of Ventolin does not change. Oral contraceptives, I read in the press,

are going to go up $6.20. Oral contraceptives, I am not speaking for all of

them, but you know, but my advice from the Department of Health, commonly used

ones are below the ceiling anyway. If you were below the ceiling before you

are still below the ceiling, your price does not move. I have read in the papers

that people will pay more for antibiotics. Augmentin, a common antibiotic, is

below the ceiling. Its price is not moving. If your price was below the ceiling

it is not moving. The only thing that happens when you move the ceiling up is

that you pay $6.20 additional in relation to those prescriptions which are $50

or $100, or $200, or $1000. And I think that in the rush to report these things

that point has not been made clearly.


Will you be talking to Natasha Stott-Despoja, directly with her, are you prepared



Of course, of course I am prepared to speak to her, yes.


Are you making any approaches yourself?


Well, I would say to her if she is willing to take a constructive attitude

to the Budget I would love to speak to her. The point I would make to her is

the point I made in there. That no, not all prescriptions are going up in the

general category, that the move in relation to pensioners is $1 per prescription,

and that if we do not start taking steps now that she is not going to be helping

people on medications., What will happen is, as your system becomes more and

more expensive, less and less medicines will come onto it. That is what will

happen then.


…(inaudible) round on some of the issues she has raised, like the means test

on the private health insurance rebate?


No, that is, you see, can I make this point that, private health insurance

rebate was a policy of the Government which it introduced, which it took to

the last election. We actually were elected at the last election. Now normally

people say that entitles you to implement your policies. What is being put to

us now is, we should break our policies. Now private health insurance rebate,

we said, was for everybody to try and get the uptake of private health insurance.

You know, we were actually elected and I think ordinarily that means you are

entitled to have your Budget measures put in place.


…(inaudible) Natasha Stott-Despoja is persuade her to concede to …(inaudible)…?


Well I, look, I would be very happy to explain to her and to the Democrats

the rationale behind this and I think properly understood, these measure are

measures which are very important to re-base the Pharmaceutical Benefits Scheme.

What happened here, let’s be honest about this. The Democrats announced that

they were going to oppose certain measures and the Labor Party said “me

too”. I mean, it is an indication of Crean’s policy weakness, in my view,

that he could not actually stand up for the public interest. He got rushed by,

by the Democrats. Well since the Democrats are the lead party here I am very

happy to talk to them.


Would you be prepared to change the level? The level of…(inaudible)?


No, we, we are going to put up our measures.


Treasurer, is there any room for compromise on your side?


Well, this is a measure to increase the co-payment from $3.60 to $4.60, one

dollar. And remember this, after you have had 52 scripts they are free. So the

maximum effect that it can have is one dollar a week for pensioners. Now, people

do not know that some of these prescriptions in fact cost thousands and the

co-contribution is always $4.60 for a pensioner. I think people think, well

the medicines must cost $4.60. They don’t. Some of them cost thousands and the

taxpayer subsidy is hundreds and in some cases thousands. And if you want to

have access to the best medical treatments available you have got to make it



So that’s a no?


Well, my point is, we have announced the Budget and we will be legislating

to implement it.


Treasurer, our polling, Newspoll today, in the Daily Telegraph said that 46

per cent of voters would like to see the Prime Minister continue after his 64th

birthday. That’s quite a remarkable endorsement for the Prime Minister isn’t

it, don’t you think?


Well Malcolm, as you know, any comments I make in relation to leadership have

the tendency to be misinterpreted so I studiously avoid from commenting on it.


You wouldn’t endorse the Prime Minister then?


Absolutely I would. I think, as I said earlier on today, I am not surprised

that people are happy with the way in which the Government is travelling. We

are the strongest economy in the western world, we have got the lowest interest

rates in 30 years, unemployment is falling, we have got a strong financial position.

I think many people think that that is the result of good Government under the

Prime Minister’s leadership and with my full support. And I think people are

saying that they think that the country has had some good Government, a Government

that has not always done the easy thing, but the tough thing and we intend to

continue to do that.


My mobile wasn’t working, my Telstra mobile was out of range here. If Telstra

is privatised is that going to get better or worse?


Well, Telstra won’t be privatised until services improve in rural and regional

Australia, we have always said that. But I have never actually agreed with the

theory that the Government provides better services than the private sector

either, incidentally. You know, if the Government provides better services than

the private sector we should nationalise farms to get better food production.

But experience has told us that by and large the private sector provides better

than Government and it has certainly been our experience in business. So, the

Government’s policy is to improve services, which we will do. But I do not accept

this proposition, I don’t think Australians accept the proposition that the

Government provides better services than the private sector. I do not know how

you manage to run the two together.

Thank you.