Senate Committees

Additional estimates 2001-2002 Report

March 2002

© Parliament of the Commonwealth of Australia 2002

ISSN 1323-3750

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Senate Community Affairs Legislation Committee Secretariat

Mr Elton Humphery
Secretary
The Senate
Parliament House
Canberra ACT 2600

Phone: 02 6277 3515
Fax: 02 6277 5829
E-mail: community.affairs.sen@aph.gov.au
Internet: http://www.aph.gov.au/senate_ca

Membership of the committee

Senate community affairs legislation committee

Additional estimates 2001-2002

Report

1.1 On 14 February 2002 the Senate referred the particulars of proposed additional expenditure in respect of the year ending on 30 June 2002 [Appropriation Bill (No. 3) 2001-2002 and Appropriation Bill (No. 4) 2001-2002] to the Committee for examination and report in relation to the portfolios of Health and Ageing, and Family and Community Services:

1.2 The Committee has considered the additional expenditure of the portfolios set out in their respective Portfolio Additional Estimates Statements 2001-2002 and related budgetary documents. Explanations relating to the estimates were received from Senator the Hon Kay Patterson, Minister for Health and Ageing and Senator the Hon Amanda Vanstone, Minister for Family and Community Services and officers from the portfolio Departments at hearings held on 20 and 21 February 2002. The Committee expresses its appreciation for the assistance of the Ministers, Ms Jane Halton, Secretary, DoHA and Mr Mark Sullivan, Secretary, DFaCS, and the officers who appeared before it.

1.3 The Committee also thanks the Hansard and SAVO staff who returned at short notice during their dinner break to complete the hearing on 21 February 2002.

1.4 In accordance with Standing Order 26, the Committee has agreed that the date for submission to the Committee of written answers or additional information relating to the expenditure was 8 March 2002.

1.5 The Committee discussed many of the expenditure revisions and information contained in the Portfolio Additional Estimates Statements. These discussions are detailed in the Committee’s Hansard transcripts of 20 and 21 February 2002, copies of which will be tabled in the Senate. Hansard transcripts of the estimates proceedings are also available on the Internet at http://www.aph.gov.au/hansard/senate/commttee/comsen.htm Volumes of Additional Information received by the Committee containing answers to questions taken on notice and tabled documents relating to the Committee’s hearings, will also be tabled separately in the Senate and be accessible on the Internet at http://www.aph.gov.au/senate_ca

1.6 In its reports in March and June 2000, and March and June 2001, the Committee expressed strong dissatisfaction at the continuing lateness of the provision of answers to questions taken on notice, especially relating to aged care, by the Department of Health and Aged Care, now the Department of Health and Ageing (DoHA).

1.7 This unsatisfactory situation was repeated with the Committee receiving responses on the morning of the hearing (20 February 2002) to a further 18 questions outstanding since June 2001, the majority of which related to aged care. One Senator expressed frustration, not only at the extreme lateness of the answers, but that some of the quite complex questions merely had ‘one-line answers and were quite dismissive’.[1]

1.8 The Chair advised that she had sought and been given a commitment by the two new Ministers (Senator Patterson and Mr Andrews) that this unacceptable situation would be addressed and that in future the Ministers would undertake a rapid turnaround of questions on notice. The new Departmental Secretary (Ms Halton) gave a similar commitment on behalf of the Department.[2]

1.9 The Committee is pleased to report that even though over 200 questions relating to the Additional Estimates 2001-2002 were placed on notice with DoHA there has been a vast improvement in the provision of answers. About half were provided by the due date and many others were expected to be received prior to the reporting date. The Committee greatly appreciates this progress and looks forward to continual improvement in the future.

1.10 The Committee also acknowledges and thanks the Department of Family and Community Services and Centrelink, who also had a large number of questions on notice, for their continued efforts in the timely provision of answers to questions taken on notice at the estimates hearings.

1.11 The Committee discussed a range of issues with both portfolio departments.

1.12 There was considerable debate with DoHA in relation to the escalating costs of the Pharmaceutical Benefits Scheme (PBS), particularly the underestimation of expenditure for new PBS listings of drugs such as those for the treatment of arthritis. In the financial year ending 30 June 2002, it was expected that ‘the two COX-2s, Celebrex and Vioxx, would, between them, have a cost to the government in the order of $165 million, of which Celebrex’s share would be approximately $100 million’.[3] The first year cost estimate for Celebrex, which had been listed in August 2000, was of the order of $40 million.

1.13 In response to a question by the Chair regarding assessments being made of the cost benefits alleged to be associated with the introduction of new generation drugs, the Chief Medical Officer indicated that in large international outcome studies there was clearly a major reduction in complications of ulcers with a concomitant reduction in costs.[4]

1.14 The underestimation of expenditure for the PBS had been identified by the Department as an underachievement in its 2000-01 Annual Report.[5]

1.15 The Minister, Senator Patterson, commented on the seriousness of the situation:

The issue of the PBS is a very serious one for Australia. It is an issue for the government, it is an issue for the opposition, it is an issue for the drug companies, it is an issue for the prescribing doctors and it is an issue for the community.

...All of us involved, from government right down to consumer to patient, are important players in ensuring that drugs are used appropriately and that they are complied with so that they are prescribed for the reasons under the guidelines of the PBS and that Australians understand the cost of the PBS.[6]

1.16 There was also considerable debate with DoHA on the establishment grant of $5 million to the Royal Australian College of General Practitioners (RACGP) for the co-location of national general practice organisations to a building in Canberra to be known as ‘GP House’.[7]

1.17 The major issues discussed in the Family and Community Services portfolio were the introduction and implementation of Family Tax Benefit A and B, Child Care Benefit administration, and debt issues.

1.18 The Committee sought information from FaCS regarding the considerable variation of around $5 billion between the budget figures and the Mid Year Economic and Fiscal Outlook (MYEFO) figures. The officers explained to the Committee that the adjustments were due to changes in the economic parameters and customer behaviour. In respect of the Family Tax Benefit people were choosing payments through Centrelink rather than claiming through the tax system.[8]

1.19 FaCS further explained to the Committee that:

With the amount of money that we are dealing with in this portfolio, the relatively minor changes in economic parameters can have a significant impact on the experience. For example, $5 billion over four years is out of a total of almost $200 billion. It is a $50 billion a year portfolio. I know $5 billion is a lot of money but, relative to total portfolio expenditure, it is a relatively small change as a variation of expenditure. There is a general point that what might seem to be relatively small changes in economic assumptions can have quite significant dollar impacts on total social security spending.[9]

1.20 The Committee questioned officers from Centrelink in relation to a number of privacy breaches that were detailed in their annual report.[10] The Committee was advised that only one case out of the 11 that were referred to the Privacy Commission was still outstanding.[11]

1.21 A number of important administrative and process issues were raised during the estimates discussions and are detailed in the Hansard transcripts of evidence.

Senator Sue Knowles

Chairman
March 2002

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