One Voice: To the High Court
Federal Council instructed members not to cooperate with the scheme. It refused the Government’s request for the names of doctors who could join the committee that was proposed to advise on the medicines that should go on the list. And, when the enabling legislation was proclaimed in 1945, the BMA responded in the courts. On behalf of the Victorian branch, the Attorney-General of that State launched action in the High Court that challenged the constitutionality of the legislation. In November that year, the High Court decided Dr Evatt was wrong and the BMA right: that the legislation, which sought to introduce a scheme of subsidised medications, was unconstitutional because it was not supported by Sec.51 of the Constitution, the section that gave the Commonwealth power to legislate only for invalid and old age pensions. Not only was the constitutionality of the PBS legislation in doubt but now also that covering other social policies such as child endowment. This was getting messy.
The Government (by now led by Mr Chifley) mounted a referendum the following year to gain approval for a change to Sec.51 so that it could provide pharmaceutical, sickness and hospital benefits and medical and dental services plus maternity allowances, widows’ pensions and child endowment. Not surprisingly for a proposal that guaranteed support for mothers, widows and their children, the referendum was strongly supported. The Constitution now allowed the Government to proceed with a pharmaceutical benefit. But it also retained the clause in Sec.51 that it could not do this so “as to authorise any form of civil conscription”. That clause was soon to cause the Government much grief.
With the referendum result behind it, the Government introduced legislation in 1948 to implement the PBS with amendments to deal with clauses in the original Act that the High Court had criticised. In the BMA’s judgment, the 1948 legislation was in practice no better than the 1945 one, and it decided to launch a national campaign against it.
Doctors were instructed not to cooperate with the scheme and return their formularies to the Government without opening them. The campaign was effective: it was reported that about 98 per cent of all doctors complied with the BMA’s instructions. Moreover, the association issued yet another legal challenge as soon as the legislation was proclaimed, on the ground that the Government’s instructions to doctors under the legislation amounted to civil conscription and therefore was in breach of the Constitution. This too was upheld by the High Court.
It was now 1949. An election was due. Time had run out. The Government did not have time to put up any more amendments to the PBS legislation that would satisfy the High Court and the BMA.
While the struggle over the PBS was taking place, the Government had moved on another aspect of health policy. This was its proposal, also opposed by the BMA, to legislate for a hospital subsidy scheme and negotiate it with the States. The subsidy proposed would be paid on condition that each state government would abandon means testing of public hospital patients. A similar subsidy would be paid to private hospitals for patients who had taken out private health insurance. Though the BMA at the federal level opposed the scheme, some state branches accepted that it as relatively inoffensive in practice. New South Wales (with Federal Council support) set up a Medical Benefit Fund to head off any attempt to use the subsidy scheme to introduce a salaried medical service sessional payments. Something like 1,000 doctors in New South Wales each donated £10 to establish the MBF. The Fund was open to public subscription. Subscribers were offered reimbursement of expenses for treatment by doctors on a fee-for-service basis. This became the basis for the national insurance scheme established by the Menzies Government in the early 1950s.
The matter rested at that point. An election was called in December 1949.