Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for North Sydney has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

If we cast our minds back to the period of approximately January to April this year, no hospital patient anywhere in Australia was safe. They would find themselves waking up groggy from the anaesthetic, somewhat confused, not sure where they were, to realise that there was an unexpected visitor plonking himself down in a casual fashion on their bed. Then they would notice to their horror that this unexpected visitor was surrounded by four or five camera crews and a collection of bustling journalists. I refer, of course, to the period in which the former Prime Minister, Mr Rudd, seemed incapable of passing a day without visiting several hospitals and just dropping in to chat with patients. Why was he doing this? He was doing it because he had dumped the issue of climate change and he was searching desperately for another issue to pursue. He was also, I suggest, increasingly conscious, in a somewhat guilty way, of the promise that he had made at the 2007 election that he would take over public hospitals from the states by mid-2009 if the position had not improved. Manifestly he had failed to deliver on that commitment.

The piece of legislation which the House is debating today, the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010, emerges from that frenzied period of political activity. I want to argue today that this piece of legislation badly underdelivers on the heady rhetoric which accompanied the policy announcements which were made in April this year. It is a piece of legislation which fundamentally undermines the clarity of the financial arrangements between the states and the Commonwealth embodied in the GST. I want to make three basic arguments. Firstly, this piece of legislation fails to deliver on the objectives which it claims to achieve. Secondly, it is complicated and uncertain and, as well as not doing good, there are good arguments that it does harm. Thirdly, one specific problem with this bill is that it undermines the federal-state financial relations embodied in the arrangements for the goods and services tax, which have worked very effectively since 1999.

Let me turn first to the failure of this legislation to deliver on its claimed objectives. The promises came thick and fast. This bill was supposed to get rid of waste, of duplication, of unclear accountability. It was in fact a historic reform, we were told. The then Prime Minister said, on 20 April:

… today we have reached an historic agreement to deliver better health and better hospitals for the working families of Australia.

For anybody who did not get the point, he went on to say:

This, ladies and gentlemen, is a very, very big reform of the health and hospital system of Australia.

He then went on to make reference to that large community of rather surprised patients upon whom he had been relentlessly and unexpectedly dropping in for a period of several months. He said:

I have spoken, literally to hundreds and hundreds and hundreds from the smallest hospitals in rural communities to the largest hospitals in our biggest cities and so much of what they have said has been the same …

It was not, ‘Please get off my hospital bed.’ It was apparently:

… please, please, please, fix our system for the future; please, please, please, get rid of the duplication, the waste in our system …

So does this bill, and the arrangements embodied within it, deliver on that promise to get rid of the waste and the duplication? The answer to that is no. It establishes arrangements of remarkable complexity. The governance arrangements and the interaction between many of the various entities which are established are left very unclear and we can have very little confidence indeed that there is going to be any systematic addressing of the current levels of duplication and unclear accountability.

We were also told when the announcement was made that there was a clear funding basis under which the Commonwealth would retain one-third of the goods and services tax receipts and that these would be dedicated to funding the Commonwealth’s contribution to the cost of hospitals. The press release which was issued on 20 April headed ‘Historic Health Reform’ contained the following statement:

The Commonwealth and seven states and territories have agreed to the Commonwealth retaining one third of the GST and becoming the dominant funder of the nation’s hospital system.

But the devil, as is so often the case, is in the detail. The precise figures are not in fact known. The figure of one-third is merely an estimate.

This reform was supposed to involve the Commonwealth taking over the hospitals. That, after all, was what Mr Rudd promised in the 2007 election. In fact, it is very clear from this package that the states will continue to operate the public hospital system, through the new local hospital networks. The COAG communique issued on 20 April makes it very clear that the Commonwealth is expressly excluded from any role in the operation of the local hospital networks.

We are also told that it is a virtue of these reforms that the Commonwealth will become the dominant funder of the nation’s hospital system. Those of us who were here in this place earlier this year can well remember the particular thrill, the tremor, which entered the voice of the then Prime Minister when he talked about the Commonwealth becoming the dominant funder. He seemed to find that a particularly satisfying expression. But the real question which is left unanswered is: why is this necessarily a good idea? How can we have any confidence at all that, if the Commonwealth becomes the dominant funder, it will in some way improve the operational performance of our health and hospital system? We know from recent experience, in areas as widely distributed as pink batts and Building the Education Revolution, that the Commonwealth government is not very good at operational performance. The officials who have most experience of running operational organisations are generally found at state level, not at federal level.

There are many other ways in which this piece of legislation does not live up to the grand promises which have been made about it. Mr Rudd described it as fundamental reform, and it is no surprise that he liked this package, because it allowed him to spend more money. But, despite the cherished beliefs of this government, spending money is not the same thing as reform. You have to demonstrate that you are going to be spending more money after you have intervened than before to make the case that you are delivering fundamental reform. So what we have here is a package which has been hugely oversold.

The second area that I want to address is that this package establishes a regime and set of arrangements which are complicated and uncertain. It creates new layers of bureaucracy, including the new national health and hospitals fund and new joint intergovernmental funding authorities. Then there are the various specialist bodies hanging off the sides of this arrangement, such as the Independent Hospital Pricing Authority and the National Performance Authority—lots of lovely new organisations filling out the organisational chart and gladdening the heart of any bureaucrat. But, as submissions to a number of inquiries have highlighted, there is a considerable lack of clarity about how all these organisations will work and interact. And there is a troubling degree of faith in the policy architecture and the capacity of complex bureaucratic structures to address every problem.

Let us just ask one simple question: if the objective of this package of reforms is to have the same people responsible for collecting the money and spending the money and, further, for those people to be sufficiently close to patients and to service delivery such that they make sensible decisions based upon what is happening on the ground, how is this rich, new ecosystem of authorities, networks and funds going to achieve that? The answer is that there is very little to satisfy us that it will. On the contrary, there is considerable cause here to suspect that we will see more confusion, less clarity as to accountability and rich, new possibilities for cost shifting and finger pointing.

Let us look at some of the submissions that have been made by respected authorities or stakeholders such as Catholic Healthcare. It has asked a very good question: ‘How is the private and not-for-profit hospital system involved in this set of reforms?’ What has been put forward is deeply unclear on that very important question. The Australian Medical Association asked in its submission: ‘What are the relationships between the multiple bodies which are created out of this package of reforms? What are the relationships between the Australian Commission on Safety and Quality in Health Care, the Independent Hospital Pricing Authority and the National Performance Authority?’ There is a distinct lack of clarity in what is being proposed.

The third area that I want to address in the brief time remaining is the impact of this package upon arrangements for Commonwealth-state relations, arrangements which were clarified and put on a much more sustainable basis with the introduction of the goods and services tax by the Howard government in 1999. This was a major and serious reform. It was not just an exercise in spending more money described as reform. The consequence of the introduction of the GST was to give the states a growth tax for the first time. Proceeds from the GST rose from $24.4 billion in 2000-01 to $44.5 billion in 2009-10. The policy intention was to allow the states to better manage key functions with greater certainty over their revenue base.

Unfortunately, this set of rushed through changes which the House is now considering will have the effect of comprehensively white-anting the GST policy architecture which was so carefully and painstakingly introduced by the Howard government. It is troubling indeed that these changes appear to have been made in a fashion which is inconsistent with clause 44 of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations 1999, which says:

All questions arising in the Ministerial Council will be determined by unanimous agreement unless otherwise specified in this agreement.

Instead of that unanimous agreement, we have the Commonwealth imposing its will and seeking to comprehensively change the GST arrangements in a way which is far from good for the policy of giving the states certainty and clarity as to their source of funding. Indeed, the impact of these changes on the GST revenue stream to be received by the states is uncertain and variable. According to the Commonwealth’s own documents, the share of the GST revenue that the Commonwealth will retain for the purposes of funding the new hospital arrangements will vary widely by state in 2011-12 between 50 per cent in the ACT, 40 per cent in Queensland, 30 per cent in New South Wales and 25 per cent in Victoria.

This is a package of purported reforms which is deeply flawed because it does not deliver on the bold objectives and claims that are made about it. On the contrary, it introduces complication and uncertainty and it offers manifest possibilities for continued cost shifting and playing of the blame game. Lastly, it has the not incidental but in fact quite serious consequence of materially damaging the arrangements under which the goods and services tax has, until now, provided the states with a degree of certainty as to their funding base, which in turn has allowed them to go about their jobs of delivering services to citizens in a more productive and efficient way. For these reasons, I would argue that the legislation before the House ought not be supported.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I start my contribution on the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010 by saying that it is no wonder the member for Bradfield proposed nothing positive in his contribution and it is no wonder the Liberal Party just wants to wreck any good reforms in the national interest, because the Liberal Party took no health policy whatsoever to the election. The member for Bradfield has asked why the former Prime Minister, why the Minister for Health and Ageing and why people from the government visited hospitals. I will let the member for Bradfield know that it is because we are actually interested in health. We actually want to make our hospital system better. We want to ensure that the residents in electorates such as mine can actually access health services when they need them. I am very pleased to rise in support of the bill. I am very proud to speak on this bill which will ensure that residents in my electorate of Kingston, as around the country, will be able to access a sustainable, affordable healthcare system into the future.

Our health and hospital system is already struggling to keep pace with the growing demand for health care as our population ages. This will only intensify into the future. The National Health and Hospitals Network reform is an essential evolution of the federal-state relations regarding the delivery of health care. This bill will ensure that all Australians get better value for money and receive better quality health care. Reform of the healthcare sector is imperative so that future generations can enjoy world-class, accessible and affordable health care.

The inadequacies of the current health and hospital system is something that is raised from time to time in my electorate of Kingston. Earlier this year, I was informed by a mother of a child with a late diagnosed double pneumonia that she had been told that she would have to be prepared to wait many hours upon arrival at the emergency department of her local hospital. Other residents have been dismayed when they have been informed about the waiting times for elective surgery. Our current health system is struggling to keep pace and this problem will be exacerbated by population growth that is projected to substantially increase by 2050. This growth will create more pressures on Australia’s health services. At the same time, Australia will be faced with an ageing population, which will substantially increase healthcare needs and expenditure. It is for this reason that the government is taking direct action now to plan for the future of our nation’s healthcare system.

Since being elected, federal Labor has taken the area of health and hospitals very seriously. We have started by investing in our health and hospitals to meet the current and growing demand in the health system. But we have a lot of work to do because of the disastrous situation we were left with by the previous government. It was the now Leader of the Opposition, as the former Minister for Health and Ageing, who ripped $1 billion out of our health system and chose to cap GP training places, leading to the severe GP shortage we are suffering from today. In contrast, the $64 billion COAG 2008 National Healthcare Agreement saw a 50 per cent increase in funding flowing to the states, including $750 million to take pressure off 37 of our country’s busiest emergency departments and to upgrade our hospital equipment across the country. We are now taking action to address the dire workforce shortage—a legacy of the former Liberal government. We are doubling the number of GP training places to 1,200 by the year 2014 and will fund training for over 1,000 new nurses each year to help our ailing health system.

In my electorate of Kingston alone, residents have benefited from investment in an operating theatre and surgical equipment upgrades at the Flinders Medical Centre to improve emergency and elective surgery waiting times. Furthermore, this government has invested $10 million to redevelop training facilities at the Flinders Medical Centre, Noarlunga Medical Centre and the Repatriation General Hospital. This is so they can attract, train and retrain quality health professionals in the area. We have committed to establishing after hours GP services in communities such as Seaford, Morphett Vale, Huntfield Heights, Sheidow Park and Aldinga. The Noarlunga GP superclinic is expected to be completed in 2011. This will also play a very important role in building the infrastructure necessary to improve front-line health services in my electorate and to bring more GPs and allied health workers under the same roof.

The bill before us today is about building on the significant investments in our health system and implementing comprehensive reform of our health system so that all Australians have access to quality health care well into the future. The bill proposes to amend the Federal Financial Relations Act 2009, which will enable the implementation of a number of major reforms to the governance of the Australian healthcare system. These changes have gone through extensive consultation and the bill implements the changes to federal financial relations as agreed to by the Council of Australian Governments earlier this year.

These major reforms build on the strengths of the current system and ensure the long-term sustainability of our healthcare system. Under the National Health and Hospitals Network, the Commonwealth will become the major funder of Australian public hospital services. The government’s reforms are not just about increasing access to and lifting the quality of health services; they are about preparing for our ageing population and ensuring that investment in our health and hospital system is sustainable for the long term.

The government proposes to make three key amendments which will affect all states except Western Australia. First, the government will retain a portion of the GST to be directed by the Commonwealth government towards spending on health and hospitals. Second, funding sourced from the national health care specific purpose payment will now be directed to health and hospital services throughout the National Health and Hospitals Network fund. Third, the government will be able to make an additional top-up payment to states if hospital costs outpace the growth in GST revenue. Additionally, while the Western Australian government has not yet signed the National Health and Hospitals Network agreement, this bill protects Western Australian current health funding ensuring that the Premier of Western Australia would need to agree to any change to the current funding arrangements, and that would have to be tabled in the parliament. These changes will ensure greater federal investment in the health and hospital area. This is something that the previous Liberal government substantially neglected. This will reduce the pressure that rapidly increasing healthcare costs will place on the insufficiently funded state and territory budgets into the future.

I wish to stress that the reform of health and hospitals is not about providing a blank cheque to the states; rather, it is about introducing more efficient pricing based on what health services actually cost. Retaining a portion of the GST will ensure that the federal government is able to invest directly in health and hospital services in all states and territories. This government will invest no less than $15.6 billion in additional top-up funding over 2014-15. Retaining and dedicating the GST in 2014-15 provides the base for the Commonwealth then taking on the majority of any growth in costs beyond the growth of GST revenue. As a result, all states and territories will benefit from this reform in the long term. More importantly, Australians will benefit from more efficient, better quality healthcare services.

Unlike those opposite, the Labor Party has always believed that the health of Australians should be a top priority of government. It was a Labor government in 1948 who introduced the PBS, it was a Labor government who introduced Medibank and it was a Labor government who introduced Medicare. The current government will continue this tradition by delivering a National Health and Hospitals Network. This bill is a necessary step in the implementation of essential reform and it would be a shame if those opposite were successful in their reckless opposition to a sustainable healthcare system.

As I have previously mentioned, I am sure that many in this House would remember all too clearly that, when the Liberals were in government, they ripped $1 billion from our hospital system, capped GP training places and ignored the shortage of nurses in our community. We are now, in my electorate of Kingston and in the rest of the country, experiencing the repercussions of these short-sighted policy decisions, and it is this Labor government who is picking up the pieces and moving forward in the direction of a world-class, accessible and sustainable healthcare system.

Unsurprisingly, those opposite have trumpeted the same old misleading arguments against the national health and hospital reforms. The Liberals have threatened to wreck this reform and this will be to the detriment of all Australians. Their continued mindless opposition to change and necessary reform shows just how uninterested they really are in securing a sustainable and affordable healthcare system for our country’s future.

As usual, the opposition has presented a number of misleading excuses as to why they will not pass the bill, and these seem to change daily. The COAG agreement shows the willingness of the state governments to reverse the anti-health trend of the previous government. Seven out of eight states and territories signed the National Health and Hospitals Network Agreement. While Western Australia was not a signatory, the revised intergovernmental agreement will allow Western Australia to join the health reforms or to remain separate. Just because one state has not signed the current agreement, this should not be a barrier to national reform. Western Australia will not stand in the way of these health reforms and neither should the Liberal Party.

The opposition are simply not interested in the long-term viability of our health system. All in all, those opposite will attempt to wreck this bill purely to oppose this government. It is opposition for opposition’s sake. Their reckless political strategy is a direct threat to the sustainability of the Australian healthcare system. I urge the members on the other side of the House to see past the rhetoric and join with the government in supporting this necessary reform.

In conclusion, the National Health and Hospitals Network reform is the most significant health reform since the introduction of Medicare by the former Hawke-Keating government. It will mean the efficient provision of better quality, more accessible health care to future generations of Australians. We cannot afford not to act to secure the long-term sustainability of our health and hospital system. My constituents, along with the rest of Australia, deserve a properly funded health and hospital system. For this reason, I commend the bill to the House.

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010, which sums up so much about those opposite on so many levels. This legislation is defective in many respects, and previous speakers have focused on various aspects of it. In the time available, I want to particularly focus on the fundamental breach within this legislation of the 1999 GST agreement. That says so much about this government’s approach and about what the government believes in.

When the GST passed through this parliament in 1999 for introduction in 2000, the fundamental agreement at that time was that there would not be any change to the GST arrangements in any way, shape or form without the unanimous agreement of the states, and I will come back to that. Back in 1999 when that agreement was reached, shortly after the passage of the legislation, those opposite—including the Minister for Trade, who is at the table, but particularly the member for Griffith—were very opposed to the goods and services tax; they did everything they could to stop it. When they talk about reform over the last 25 years, they airbrush out the years 1999 and 2000. They do not even mention the goods and services tax or the reduction in personal income tax rates that accompanied that important reform.

When the member for Griffith was in this House—at this dispatch box, I suspect—a little over 11 years ago, he was not just opposing the GST but competing with all his colleagues to be the person who opposed it most vigorously. In fact, he almost impersonated Franklin D Roosevelt. You will recall the ‘day of infamy’ with the bombing of Pearl Harbour. This was followed by the ‘day of fundamental injustice’ declared by the member for Griffith, Kevin Rudd, here in this parliament in 1999. Because it was such a historic moment I will say that Wednesday, 30 June 1999 at 11.35 was the time that ‘Fundamental Injustice Day’ was declared. He said:

When the history of this parliament, this nation and this century is written, 30 June 1999 will be recorded as a day of fundamental injustice—an injustice which is real, an injustice which is not simply conjured up by the fleeting rhetoric of politicians. It will be recorded as the day when the social compact that has governed this nation for the last 100 years was torn up. It will be recorded as the day when the nation’s taxation system moved from progressivity to regressivity. It will be recorded as the day when the parliament of the country said to the poor of the country that they could … go and take a running jump.

That was Fundamental Injustice Day, declared by the member for Griffith in 1999. The member for Griffith as Prime Minister never talked about Fundamental Injustice Day with respect to the goods and services tax. In fact, he went from hating the goods and services tax to loving it so much that he wanted to keep it and take some of it back from the states, and that is what this bill, which is a result of his announcement of his so-called reform, seeks to do.

As I said at the outset, the agreement in 1999 was quite clear. It stipulated very clearly that the GST was designed to be a state tax, a tax collected and administered by the federal government but where all of the revenue went to the states to give the states a growth tax, a secure and growing revenue base. That is why clause 44 of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations back in 1999 said the following:

All questions arising in the Ministerial Council will be determined by unanimous agreement unless otherwise specified in this Agreement.

As the shadow Treasurer pointed out a little earlier, in 2008 as Prime Minister the member for Griffith signed another agreement with the states and territories that the GST arrangements would not be changed without unanimous agreement. There is no agreement from Western Australia. Equally to the point, the oppositions in both New South Wales and Victoria, facing elections in March and this Saturday respectively, have indicated that they do not support the arrangements, yet this government is seeking to breach the fundamental agreement which the GST was based upon.

The shadow Treasurer has moved an amendment to set this bill aside and I have seconded that amendment. This legislation, this approach, sums up so much of the chaotic approach to policy from those opposite. It highlights their hypocrisy on so many levels. For those members speaking here now—there are new members, and I am about to be followed by a new member—

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

Dr Emerson interjecting

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

At least that new member is not in the situation of the minister opposite, who I suspect—because I know the minister opposite quite well—supported the goods and services tax back in 1999 and 2000.

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

You’d better check the Hansard.

Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

Well, no matter what he said, I think he probably had his fingers crossed behind his back. But the member for Griffith declaring Fundamental Injustice Day way back then and then going from hating the GST to loving it so much that he wanted to take it back from the states sums up so much about the approach of this government.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Can I at the outset, on indulgence, just place on the record my condolences to the families of the Pike River miners. I think that people all across the chamber, along with others across the country, are deeply saddened by the news we have learned this afternoon. I just want to place on the record my heartfelt condolences for those families who will be going through an enormous amount of pain as we speak.

Turning to the matter that brings us here now, it gives me great pleasure to speak about the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010 because certainly in our neck of the woods, out in Western Sydney, health care is a major issue. It is certainly of great concern to me as a new member representing the electorate of Chifley, covering such suburbs as Blacktown, Doonside, Rooty Hill and Mount Druitt, to name but a few. What is exceptionally pleasing about this bill is that it is more evidence of the progression of reform to attempt to improve Commonwealth-state relations, making our federation, if I can put it this way, work smarter for the benefit of our citizens. It is not the only bill during the remaining time that we have in 2010 in this place that will demonstrate that we can make federation work smarter, putting aside the way we used to work to effectively work better and smarter. This bill is one example of that.

The changes, as the Deputy Prime Minister noted in late October in his second reading speech when he introduced the bill, recast healthcare funding ahead of what are phenomenal pressures, particularly the demographic wave that looms before us and the costs of technology for health care, which are well documented. I must say that, reflecting on the contribution of the Deputy Prime Minister, I was taken by the statistic that, on the basis of current trends, health and hospital spending would consume tax revenues collected directly by state governments by 2045-46. Clearly there is a demand on us as a government, particularly in communities with people getting older, with their demands increasing and with costs increasing as a consequence of improvements in technology, that we do something about this now rather than cobbling together a response at a time when we are not necessarily blessed with options. That is why this will become a landmark piece of legislation that will be celebrated not necessarily in the way we would traditionally expect but by families who will be relieved that the health care they need will be there at the time that they most need it.

The way that this legislation reflects government intention to dedicate one-third of GST revenue to health and hospital services will guarantee in effect growth funding to the states of over $15 billion over the period 2014-15 to 2019-20. In particular I note the three arms of the reforms: firstly, the funding responsibility and the sustainability combined with a focus on performance transparency and accountability, which is exceptionally important given the commitment of government funding in this area; secondly, the better access to high-quality integrated care that will guide attention towards patient need, especially around patient care need and an eye on prevention, early intervention and community care, which are aspects I would like to reflect on later in my contribution; and, finally, a massive shot in the arm for healthcare investment—$7.3 billion in immediate health and hospital improvements.

On those last two points I would like to focus on how this benefits the Chifley electorate. I have had the pleasure to get to know and work with some outstanding local professionals such as Peter Zelas, Graham Reece and Dominic Dawson, amongst others, learning about the great advancements in health care within the Blacktown and Mount Druitt areas. In particular, across Blacktown through to Mount Druitt and the two hospitals that operate there we are injecting nearly $45 million in new investment, with extra beds and in emergency rooms additional beds and extra equipment. For example, through the course of the election we were proud to announce the provision of new CT equipment and paediatric equipment for Mount Druitt Hospital. Other exciting developments include the construction of a clinician school at Blacktown Hospital and the GP superclinic which will help reduce the pressure on the emergency departments in both Mount Druitt and Blacktown, in an area, I might add, that is experiencing and is set to continue to experience phenomenal growth in residential numbers with the development that is occurring across Western Sydney.

The other thing I wanted to focus on, as I mentioned earlier, is preventive health care. Some of the things that have been raised with me as a new member and through the course of the campaign and the comments by GPs and by other professionals who work in the community in Chifley have helped me focus on those issues of prevention, issues such as early childhood speech pathology, diet and wellbeing, and the need for encouraging youth in particular to embrace exercise to improve their health now and well into the future. In addition to that I have GPs giving me information in forums that I have, including discussions with GPs such as Dr Hani Bittar, who has informed me that he and his colleagues have great concerns about the number of patients who present with healthcare problems as a result of obesity. Some other healthcare outfits in the area such as the Kildare Road medical centre in Blacktown recently undertook healthcare booths at a local shopping centre where they had people presenting who, even though they are taking blood pressure medication, still have inappropriately or in some cases dangerously high levels of blood pressure and are unaware of those conditions. Others dealing with diabetes are not aware that they have diabetes themselves. It is phenomenal when you talk to healthcare professionals about this, and we do need to find a way to detect but, importantly, prevent the impact of those conditions on people.

On the issue of speech pathology which I flagged in my inaugural speech, I have teachers indicating to me, particularly in some of the suburbs north of Mount Druitt, that there are children who are unable to quickly access assistance through the public system and the only way they could rely on that type of assistance is to approach people for private support which is well beyond financial means. If we were able to provide support at an early age for speech pathology, we would be able to benefit children in their early days in school, ensure that they are able to engage better, ensure that they are able to fulfil their promise through the education system, ensure that they are not frustrated by education because of an inability for us to provide speech pathology early on. If we are able to address these issues early on, we will in effect enable young children to become great students within the system and then they will be able to secure jobs and assist their own families in later life. If we are able to dedicate these resources earlier instead of trying to mop up later, imagine the huge transformative effect that can have on people’s potential.

It is something of great pride that we are talking more about prevention these days. It is something that was in effect neglected many years ago. That is not a political point, because I think, with respect, that on all sides it was not necessarily something that was factored in to thinking on health care, it was more about dealing with problems as they presented in emergency departments. But we simply cannot afford the social and economic cost that arises by us being unable to dedicate ourselves to prevention through better living, better diet and providing resources early on such as what I have indicated with respect to speech pathology to ensure that our citizens, our members of the community, do not have their potential limited by an inability to have healthcare resources when they need them. Certainly that is one area that I am keen to explore in terms of how we are able to better mobilise.

The government is doing this through its initiatives in primary health care and its willingness to embrace and consider other opportunities developed at the grassroots level to improve health outcomes. We cannot do these things without the ability to fund the system appropriately, which brings me back to this bill. This bill tries to think ahead in terms of funding and gearing the system to immediate needs and then ensuring a quality healthcare system when resources are needed at the tail end as the demographic wave hits ahead of the impact of the rising costs of technology.

We often debate in this place. We debate processes rather than objectives. It is important for us to focus across both sides of the chamber on the objectives that we are working towards. These are to improve the health care of the people of this nation, particularly with what is circling underneath it all in a demographic sense—that is, an ageing population. Certainly in my electorate there is a high proportion of young people and we need to meet their needs as well.

I am tremendously supportive of this bill. I express concern, as a lot of my colleagues have, that there is a proposal to set aside any action on this front. I believe that we cannot afford inaction in not only the injection of funds into the system now but also getting the system set for future growth and the future impact of the demographic changes I have mentioned. I would hope we are able to ensure this bill gets through so the people of the communities we represent will get the health care that they rightly deserve, free of the way in which federalism once failed to deliver for their needs and their wants. I hope that we can, as indicated in the bill, recast the way we finance health care in this country for the good of the people of Australia.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

This Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010 implements changes to the federal financial arrangements. It gives effect to reforms to the financing of health and hospital services, set out in the National Health and Hospitals Network Agreement, endorsed by the states with the exception of Western Australia on 20 April 2010. The National Health and Hospitals Network agreement includes significant reform to the financing of health and the hospital system and requires modification to the current framework for the financial relationship between the federal government and the states. The current situation is set out in the Intergovernmental Agreement on Federal Financial Relations. The agreement changes the treatment of the GST general revenue assistance payments to the National Healthcare SPP. It also creates new arrangements that allow the Commonwealth to meet its financial commitments under the National Health and Hospitals Network Agreement by making additional top-up payments.

Under the agreement, the Commonwealth becomes the majority funder of the Australian public hospital system by funding: 60 per cent of the national efficient price of every public hospital service provided to public patients; 60 per cent of recurrent expenditure on research and training functions funded by states and undertaken in public hospitals; 60 per cent of block funding paid against a COAG agreed funding model, including the agreed functions and services and community service obligations required to support small regional and rural public hospitals; 60 per cent of capital expenditure on ‘user cost of capital’ basis where possible; and, over time, up to 100 per cent of the efficient price of primary health care equivalent outpatient services provided to public patients. This will be a major opportunity to give major reform to the health services of Australia.

This really does give Australia an opportunity to improve health care in our country. It is greatly in need of it. We can knock off some of the duplications and we can work towards a more practical and efficient delivery of health care. It will also mean that we can get some more sense of funding priorities into regions to focus where we need to put more resources. It will mean great improvements to Commonwealth-state relations. The reforms will lead to getting better value for all Australians from the money invested in health.

Tasmania suffers because it has to deliver primary health care to a small, scattered and decentralised population across the whole island. We also have to deal with current perceptions of what an efficient health care system is. We have many old, small country hospitals that have seen better days and need to be ‘rebadged’ for their actual role. The word ‘hospital’ is something that people can hang onto, even though their ‘hospital’ would not have been thought of as such many years ago. Today, if you are really sick you need to be in a major hospital that can give the needed services. We need to deliver primary health care in our regions in a new and better way, which is what this government is endeavouring to achieve.

We have been discussing this for some time and the change to health funding gives us an opportunity to look at the whole question of health—from primary health care delivery and prevention through to the hospital system. I believe there should be a regional approach and Tasmania has always worked best when three regions have been used as a base for any planning of delivery. This is because local people on the ground have the most experience in delivering services within their boundaries. If they know their areas they can be innovative and make sure that services are delivered in those areas. They can work more closely together and it makes sense to allow the service deliverers and their clients/patients to be able to easily access each other. Technology is going to play a bigger role in service delivery too. People seeking help will be able to use the internet to access diagnostic-type information.

We cannot talk about health without talking about aged care. The biggest problem with our health system in Tasmania, particularly as it relates to hospitals, is that our beds are overflowing with aged care patients because there is nowhere else for them to go. I believe older Australians should be able to choose the location and kind of place they live in, and they should have access to affordable care when needed. But community and residential care is underfunded and therefore the problem is thrust onto the health care system, which leads to a build up of care needs in the public hospital system.

This has to change. I believe that many of the moves this government has made in developing the health infrastructure have begun to make inroads into the waiting lists. Some of these moves include GP superclinics, developing programs that assist regional doctor services to add ancillary activities to their practices, and allowing nurse practitioners to have access to Medicare schedules. These measures will mean that fewer patients will need to go to a hospital because their care can be sorted out at a local level. We do not have to clog up areas around hospitals.

There will still be a need to do something at the other end with aged care and there have been some recent models that have come up with some plain common sense ideas. Any health plan should include an aged care package to allow many older Australians to enjoy growing old and not be parked somewhere where they cannot contribute to their community.

E-health is becoming a reality, even in outlying areas and rural pockets that have hitherto been unserviced and not represented in the health care delivery system. An article in Tasmanian Country on 19 November clarifies this very well:

Local networks are used to check on clients and nurses make phone contact when they can’t make outreach visits.

For instance, they make sure that firewood and food is available by one means or another. They can serve more people because it can take 1½ hours for a nurse to reach a client in the Central Highlands in my electorate, be with them for an hour and then spend 1½ hours on the journey back. The article went on to say:

The use of technology allows nurses to give clients health care that is the first of its kind in Tasmania.

Cars are fitted with mobiles loaded with Wi-Fi software.

Nurses consult with specialists via the phones, which send and receive data.

The Central Highlands is the only place in Tasmania where in home monitors are used to take vital observations such as blood pressure, pulse, weight and blood-sugar levels.

The information is then read and analysed by the treating doctor. No-one has to travel, more people are given fast and efficient health care and these people are allowed to live longer at home. It is a win all round, I would say and I think most people would agree. These are opportunities for the future. With the National Broadband Network this sort of technology will expand and assist us in delivery in ways beyond what we can presently imagine.

The other change that I think would improve the current system would be to use electronic technology to move each individual’s personal records. Each practice seems to have a computer in front of the doctor and records of the visits of patients, treatments, referrals, drug therapies, et cetera, are entered into that computer. Yet if you ask for an electronic copy to take with you to the specialist there is great reluctance to relinquish the information, and the paper trail starts again. I have noticed that even in hospitals one can still see orderlies wheeling around trolleys full of paper folders. These are prone to being lost or containing mistaken entries, yet they are the major information system in many hospitals.

We are well behind where we should be. Technology can help us make gains in efficiency and effectiveness, and make health delivery safer. It will help people make decisions and allow information to be passed on in an electronic format. There are real opportunities within the primary health delivery system and in the hospital system. What can be connected to a bedside situation is unlimited into the future.

The government want to provide national leadership on health and hospitals. The ministers need to be congratulated on the great work that they are doing. But while the government are doing that, we have to allow greater control at the local level. We are determined to work with state and territory governments to deliver the National Health and Hospitals Network. The reforms will include the governance of our health and hospital system and ensure funding sustainability in the future.

We need to deliver better access to high-quality integrated care that is patient-centric. We propose to deliver health care that is designed around the needs of patients, not the needs of the health system. It must be focused on the patient and it should be about outcomes. It is also vital that we focus on prevention and early intervention. It is the new way of delivering health care throughout this nation.

Hospitals should only be used if there are clinical reasons and not for the provision of aged care. There are many things throughout hospitals that can be delivered around clinics and general GPs. The roles and responsibilities between the Commonwealth and the states need to be clarified. It will help reduce duplication of activities and improve coordination. These reforms will put Australia’s financial relations on a more sustainable footing for the future and allow us to better manage health expenditure growth. I support the bill and wish the Treasurer and the health minister every success in its carriage through the parliament.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank all members who contributed to this very important debate on the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010. It is an important bill. This is a debate about Australia’s future. Australia’s population is ageing and our health costs are going up. The Intergenerational report did shine a light on just how serious the challenges are that we face as a nation. In coming decades, we will have a significantly older population and relatively fewer taxpayers to support that ageing population. If we do not rise to that challenge then the truth is we are just leaving it to our children to solve. Do we expect them to just go without some life-saving treatment when the money is not there? Do we expect them to cut other vital services so they can afford the health system that we all take for granted? I don’t and nor do the government. We do not accept that a do-nothing approach is the way to go. That is why the government are acting on the challenges through this bill. It is a historic bill. It reflects the priority that the government places on health care now and well into the future.

In April this year, COAG, with the exception of Western Australia, reached a historic agreement on health and hospitals reform—the establishment of a National Health and Hospitals Network. This is one of the most significant reforms to Australia’s health and hospital system since the introduction of Medicare. It is one of the largest reforms to service delivery since Federation. The government’s health reforms are all about delivering better value for every health dollar spent. They are necessary so that future generations can enjoy world-class, universally accessible and affordable health care. The one thing the seven states and territories agreed as part of health reform was that a proportion of GST would be dedicated to health in each state. This bill provides the legislative underpinning of that agreement.

Under the National Health and Hospitals Network, the Commonwealth government will become the majority funder of Australia’s public hospitals. The Commonwealth will fund 60 per cent of the efficient price for all public hospital services and 60 per cent of capital, research and training in our public hospitals. We will also take funding and policy responsibility for GP and primary healthcare services and for aged-care services. As well, we are committed to reducing cost shifting and to strengthening the integration between care provided in hospital and in community settings. So we will, over time, move to fund 100 per cent of the efficient price of primary healthcare equivalent outpatient services.

In line with the Gillard government’s strict budgetary approach, this will still see the budget back into surplus in three years. Fiscal responsibility is a key component of these reforms. The investment is fully funded over the forward estimates, wholly consistent with our fiscal strategy, and does not add to the budget deficit. An independent pricing authority will determine how much the Commonwealth will pay for hospital services. The Commonwealth’s share will be based on how much the independent authority says that a particular service should cost—no more and no less. This will ensure that taxpayers receive the best value for their investment in health care and it will also drive efficiency in the delivery of health services.

I would like to make some comments about some of the criticisms that have been made in this House about the bill and in particular some of the criticisms from those opposite. The opposition have been wringing their hands about the GST dedication that has been agreed with seven out of eight states and territories as part of the COAG agreement. What was the coalition’s health policy at the last election? I think I might take the opportunity to remind those opposite of their policy, which states:

… the Coalition would be prepared to consider moving to a higher percentage of hospital funding, including 100 percent of the efficient price, but only if a State Government would voluntarily agree to surrender an appropriate percentage of its GST revenue.

So the coalition’s own election policy states that they would ask the states to surrender a proportion of GST revenue. This reveals that the coalition’s public posturing about GST is what it is—simply another excuse to oppose reform; nothing more than another excuse to wreck reform.

Opposition speakers have also suggested that we should junk our health reform because only seven out of eight states and territories are signed on, but at the COAG in April every state and territory except Western Australia signed up to the government’s health reform package. This included agreeing to the dedication of a portion of GST funds to health, which this legislation allows. The detailed implementation of the COAG agreement will require revisions to the Intergovernmental Agreement on Federal Financial Relations, and these revisions will need to be agreed by all states and territories. The revisions to the IGA can be designed to allow Western Australia to join the health reforms or to remain separate from the health reforms. The bill preserves the existing federal financial relations arrangements for Western Australia until it becomes a signatory to the National Health and Hospitals Network Agreement, and Premier Barnett has indicated that Western Australia will not stand in the way of other states participating in health reform.

I think it is of concern that the Liberal opposition would want to stop Australians benefiting from these reforms when seven out of eight states can see the merit in the new arrangements. Even Premier Barnett has indicated that he will not stand in the way of other states, so the criticism from the opposition is yet another example of their determination to wreck another important reform which is required to deal with the ageing of our population.

We have also heard opposition speakers express surprise that different amounts of GST will be dedicated in different states. I think this does speak volumes about their lack of interest in and knowledge of this reform process. This element of the reform was made clear in the National Health and Hospitals Network Agreement, was made clear in the 2010-11 budget and was made clear in the 2010-11 MYEFO, which I released earlier this month—it is plainly there for all to see. This is part of what seven out of the eight states and territories signed up to in health reform at COAG in April. This included signing up to a dedication of GST, which is what this legislation facilitates. The portion of GST to be dedicated will be a reflection of how much of the GST the state itself spends on health. The proportion is different in different states because different states spend different amounts on health. But in each state the allocations from dedicated GST combined with contributions from the healthcare SPP will provide 60 per cent of hospital funding and fund 100 per cent of GP and primary healthcare services, which are currently provided by the states.

Opposition speakers have noted that ministerial determinations that are made under this bill are not disallowable instruments. However, the bill limits the discretion in making these determinations. New section 21A requires that the minister consider the National Health and Hospitals Network Agreement and the intergovernmental agreement when making determinations, and new section 21B prevents the minister from making determinations inconsistent with the National Health and Hospitals Network Agreement that would result in substantial financial detriment to one or more states unless a proper process was followed. As part of this process, the determination must be tabled and approved by each house of parliament.

We have also heard opposition speakers make the claim that these reforms will somehow make state and territory finances worse off. That is completely absurd. I am not sure whether the opposition has been following the detail, but this is simply untrue. The amounts of GST that are dedicated will all be spent on health. In addition, as part of the reforms, the Commonwealth expects to provide an additional $15.6 billion for health and hospitals out to 2019-20 directly from the Commonwealth budget. This is in addition to the dedicated GST amounts and it is in addition to the previous estimates of Commonwealth health spending. In other words, states will not be worse off in the short term and over the longer term they will be significantly better off under these reforms.

In summing up, this bill underpins historic reforms to Australia’s health system—reforms which will put Australia’s federal financial relations on a more sustainable footing for the future and allow us to better manage expenditure on health for growth. These changes are designed to deliver value for money from our spending on important health services so that future generations can enjoy the affordable and sustainable healthcare system they all deserve.

Can I also pay tribute to the very hard work that has been put in on this bill and all of the arrangements that go with it by the Minister for Health and Ageing. This is indeed a historic reform for Australia which meets the challenges of the future and does it in a financially responsible way.

Question put:

That the words proposed to be omitted (Mr Hockey’s amendment) stand part of the question.