22 May 2002

Doorstop, Pambula-Merimbula Golf Club

Note

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

TREASURER:

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.

JOURNALIST:

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?

TREASURER:

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.

JOURNALIST:

Presumably these are only the first steps to tackle this sustainable [inaudible]? What areas come later?

TREASURER:

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.

JOURNALIST:

Are you prepared to talk to Labor and the Democrats about their opposition to the changes in the PBS and disability pension?

TREASURER:

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.

JOURNALIST:

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

TREASURER:

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

JOURNALIST:

Are you making any approaches yourself?

TREASURER:

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.

JOURNALIST:

...(inaudible) round on some of the issues she has raised, like the means test on the private health insurance rebate?

TREASURER:

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.

JOURNALIST:

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

TREASURER:

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.

JOURNALIST:

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

TREASURER:

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

JOURNALIST:

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

TREASURER:

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 sustainable.

JOURNALIST:

So that's a no?

TREASURER:

Well, my point is, we have announced the Budget and we will be legislating to implement it.

JOURNALIST:

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?

TREASURER:

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.

JOURNALIST:

You wouldn't endorse the Prime Minister then?

TREASURER:

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.

JOURNALIST:

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?

TREASURER:

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.