Dr Kerryn Phelps, AMA President, with John Laws, Radio 2UE

Now the Australian Medical Association wants an audit of health spending under the former Minister, and I don't see that as being unreasonable. On the line we've got the President of the AMA, Dr Kerryn Phelps. Dr Phelps, good morning.

PHELPS: Good morning.

LAWS: I understand how you feel. Do you think this is not the way things should work?

PHELPS: Well, I think that the taxpayers of Australia are owed a few explanations about this amount of money being given to an institution for whom the former minister now works. And, if nothing else, to see whether taxpayers have got any public health benefit out of this transaction.

LAWS: Do you really think that Dr Wooldridge would be that stupid?

PHELPS: Well, on the face of it doesn't appear to be a wise move.

LAWS: No, it certainly doesn't. But do you think it would be that stupid that there could be anything untoward about it? I do think it was extraordinary. It was either extraordinary, stupid, or brave, for him to make that money available. $5 million is a lot of funding, isn't it?

PHELPS: Well, the Senate Estimates Committee last week raised the issue. And we have - certainly the Federal Council, late last week for the AMA, followed that up with a request to the Auditor-General to look at all of the expenditures approved by Dr Wooldridge from June last year, when he must have known he was leaving politics. To ensure that the taxpayer actually got some benefit out of their taxes for the money that was spent in the health sector, knowing how much need there is in that area.

LAWS: Yeah, well there certainly is that. Do you have any thoughts about what you might find there?

PHELPS: Well, the question that was raised in Senate Estimates was that groups, who were sensitive to the portfolio, appeared to get funding. Now, we want to know what funding went where, to whom and for what purpose so that there is some transparency and some accountability for that money wherever it was spent to make sure that the Australian people got some benefit.

LAWS: Do you have any evidence that other health programs might have suffered because of that $5 million going in that direction?

PHELPS: It's been very difficult to get information on this. The concern that we have that was raised was that specialist outreach programs - where specialist going to outlying communities in remote areas, Aboriginal communities - that the funding for that was actually sidetracked into this $5 million. And also funding for the asthma program was funnelled off into that.

Now, if that is the case - and we would like some confirmation one way or the other - then that should be a matter of very serious concern.

LAWS: I agree with you. So the suggestion is that moneys that were earmarked for other areas of importance were taken from those areas and given to the College of GPs?

PHELPS: That is the inference that has been made through Senate Estimates. We're asking for confirmation of that.

LAWS: Are you having any difficulty getting the information from Senate Estimates?

PHELPS: Well, we have been having difficulty getting that information from the Department. I think Senate Estimates have got a better chance of getting that information than we have. But what we've now done is ask the Auditor-General to make those inquiries on behalf of the Australian taxpayer.

LAWS: Okay. If you can't get it, there would be a reason you couldn't get it, wouldn't there?

PHELPS: I would like to know what reason we couldn't get it.

LAWS: You would suspect that there would be one?

PHELPS: I would suspect that there'd be something to hide if we weren't able to get that information.

LAWS: That's exactly what I'm suggesting. It'll be interesting to see whether or not you achieve your ends. I wish you luck, because I think it's only proper that some sort of investigation be carried out. The Opposition believes there should be some sort of cooling off period when people leave politics before they take up a position, do you agree with that?

PHELPS: That's eminently sensible. We have that situation in the United Kingdom, where people who've been ministers have a cooling off period of a couple of years before they're able to take employment in a related portfolio after they've ceased being a minister. Now, as a minister, you have your hands on the financial levers.

LAWS: You do.

PHELPS: You're able to direct money to organisations, to different causes. And that money should be directed according to the public benefit, and not according to what might interest a potential future client or a minister's future financial situation.

Now, without implying that that's been the case in Australia to date, I think that we need to ensure that that doesn't happen and that there is a perception of independence. And the reality of independence of those financing decisions that they're made in the public interest.

LAWS: Well said. Just quickly to these health insurance premiums. We're hearing talk of an average premium rise of seven per cent. Could that be justified?

PHELPS: Well, we don't really know because there isn't a great deal of transparency in this process. We're told that the government looks at all the figures and that they satisfy themselves that the increases are warranted. But I think that we've really gone past the stage where they can make an argument based on commercial-in-confidence, because shareholders have a right to know what's happening in companies in which they have shares. And we're really in a similar situation, where the taxpayers of Australia now have a significant investment in the rebate that's going from general taxpayer revenue into rebates for private health insurance.

And I think that at the very least there should be an independent assessment of the premium increases, whether they're warranted and on what grounds. And I think people won't mind paying a reasonable increase if they can see that it's justified.

LAWS: Seven per cent's a lot of money. Seven per cent's about double the inflation rate.

PHELPS: Well, that's right. But of course you can't necessarily tie increases in provision of medical services through private health insurance funds to the CPI because quite often in the health sector increases go up out of proportion to the CPI. For example, we are told that there's been a large increase in the number of claims being made…

LAWS: Well, that would be axiomatic, because there are a larger number of people involved?

PHELPS: Well, of course. But we really ought to see the figures. We really ought to see why those increases are warranted. And in one case perhaps, in the case of one of the health funds, perhaps they've been keeping their premiums artificially low to gain market share, and now a greater increase is required. Now, if that's the case we should know about it. We should be told that that's the reason.

LAWS: I agree.

PHELPS: And I think people also when they're making such an investment in their private health insurance, that they need to know what they're buying. I'm in general practice, and a lot of people have bought - they say, 'Oh, look, I'm in the top cover.' And you say, 'Well, what exactly does it cover?' And they quite often don't know.

LAWS: No, they don't.

PHELPS: And they quite often don't find out until they're in a position where they make a claim and they have it rejected.

LAWS: Yeah, some of the money being spent by the government on stupid advertising perhaps should be spent on an educational program for people so they are aware of the situation.

PHELPS: Well, at the time we expressed great concern about the amount of money that went into that umbrella campaign.

LAWS: It was stupid.

PHELPS: And I don't think that we really got very much benefit out of that money that was spent.

LAWS: I don't think we did either. Okay, well I wish you well with your investigations, because it's something that's important to all of us. And we'd all like to know, because there's something just a touch unsavoury about the whole thing, isn't there?

PHELPS: Well, I think that we need to have some answers. And we haven't had the answers that have been satisfactory to date. And we'll certainly be continuing to demand those answers until we're satisfied.

LAWS: Okay. Dr Phelps, thank you very much for your time. It was nice to talk to you.

PHELPS: Thank you, John.

LAWS: Bye bye. AMA President, Dr Kerryn Phelps.

Ends