Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

This is an important piece of legislation, shortly after the very tight vote that we just had on another important piece of legislation. This is the National Health Reform Amendment (Administrator and National Health Funding Body) Bill 2012. I am sure you will hear many erudite and informed speeches about the provisions of this bill. One of the things that is of particular concern to me in the Dunkley electorate is the pressure that is being imposed upon the health system, particularly as people are concerned about their private health insurance. You are seeing a transfer of demand out of the private system towards the public system, and I am very interested to hear how the government might believe these mechanisms will make it more responsive.

In Frankston hospital the revenue that comes from privately insured patients supplements the resources that are available, and resources are already stretched. The very dedicated doctors, nurses and teaching and professional staff of Frankston hospital—and we support the teaching effort and the development of health professionals—are under extra strain because of people's concern that private health is being put out of their reach due to the changes to the incentives. I am very keen to hear from the government about that. I might leave my contribution at that point.

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

I start by commending the member for Dunkley for his contribution of obviously well thought-out words. They come from a man who knows the area of health very well and is very well connected with his community. I appreciate very much the time that he took to give the House just a small part of his knowledge this morning.

The bills before us, the National Health Reform Amendment (Administrator and National Health Funding Body) Bill 2012 and the Federal Financial Relations Amendment (National Health Reform) Bill 2012, seek to enact the funding model of the National Health Reform Agreement. The agreement announced in August 2011 was the third time the Labor government lauded an historic health reform proposal. Each new agreement was effectively a watered-down version of what was previously promised and supposedly agreed to. The genesis of the government's various health reform proposals, and of these bills, was the member for Griffith's central promise at the 2007 election, as the then Leader of the Opposition. The member for Griffith promised that he had a plan to fix hospitals, that the buck would stop with him and that, if his plan was not being achieved by mid-2009, Labor would hold a referendum to 'seek to take financial control of Australia's 750 public hospitals'.

Labor's leadership turmoil earlier this year provided a valuable insight into the government's chaotic decision-making process on this major policy platform. Former health minister Ms Roxon, the member for Gellibrand, claimed that the process for considering health reform policy was often done without proper advice and it was, to quote Ms Roxon, 'a ludicrous way to run government'. In particular, the proposal for a referendum to take over the hospital system was, in her words, 'a cynical approach' and 'would have been a disaster'. The member for Gellibrand issued joint media releases with the member for Griffith and promoted a possible referendum as part of the government's policy. However, in relation to her concerns, Ms Roxon, now Attorney-General, said—and I quote—she 'did not think it served any purpose to share that with the public'. The member for Gellibrand refused to stand up to what she considered to be bad policy, in an area in which she had executive responsibility. Incredibly, she was not admonished but rather promoted. That in itself is a good reason for the intense scrutiny that has been applied to this government's turbulent administration of this important area of public policy.

The current Minister for Health, Ms Plibersek, introduced this legislation as the final tranche of the government's reform agenda. The National Health Reform Amendment Bill establishes the administrator of the National Health Funding Pool and a national health funding body. A national funding authority, the National Health and Hospitals Network, was to be established as part of the government's first version of an agreement; however, within months of it being announced, the Department of Prime Minister and Cabinet advised that the authority would no longer be established. The then health minister, the member for Gellibrand, then claimed:

… it's not appropriate for us to … and we've made it very clear we don't want to increase the size of the bureaucracy. It's not appropriate for us to establish an authority where there is not a need to do so.

She went on to say:

… there will need to be people who can process essentially the cheques that need to be paid through to local hospital networks, but it doesn't require an authority.

Yet here we are today considering a bill for a new bureaucracy the government considered was necessary, then was not necessary and now is necessary again. It speaks volumes for the chaos of this government's approach to policy and the lost opportunity for genuine health reform in this country.

The unnecessary, until recently, funding body is just another in a long line of bureaucracies. Funding for hospitals under the agreement enacted by these bills will not flow until 2014—well beyond even the next election. I suspect even the member for Griffith would acknowledge that, despite all Labor's promises, public hospitals in this country are not fixed. Yet there has been no delay in ensuring enormous additional funding is available for the immediate establishment of new bureaucracies.

So far under this government, in only 1½ terms, we have seen the establishment of: the Australian Commission on Safety and Quality in Health Care, separate to the department, at a budgeted cost of over $35 million; the National Health Performance Authority, at a cost of over $118 million; the Independent Hospital Pricing Authority, at a cost of over $91 million; Medicare Locals, with funding of over $416 million; the Australian Medicare Locals Network, at a cost of $12.5 million; and local hospital networks. In addition, this government has already established the Australian Preventive Health Agency and Health Workforce Australia, and has proposed in this budget that the Aged Care Financing Authority and the Aged Care Reform Implementation Council be established.

There is enormous potential for duplication, waste and overregulation. That will be the hallmark of this government. This risk is even greater, given the former health minister's recent illumination of the government's politics-over-policy approach to these reforms. There has been $38 million allocated in the budget for the administrator and funding body. That is a large investment by taxpayers for 'people who can process essentially the cheques'—to again to quote the words of the former minister, Ms Roxon.

The funding pool, according to the National Health Reform Agreement, is comprised of state pool accounts for each state and territory. The administrator will operate the pool which will provide payments to the states for public hospital services. The administrator will calculate and advise the Commonwealth Treasurer of payments to the pool. The states will also pay their contribution into the pool for activity funded services and the administrator will then distribute it to the local hospital networks. I suspect that Barry Jones has been engaged to put together the organisational chart and the way in which this giant money laundering exercise will operate at huge expense to both the Commonwealth and to state taxpayers.

The Independent Hospital Pricing Authority is meant to set a so-called national efficient price for hospital services and to determine which services are to be block funded as opposed to activity funded. The department, in its evidence to the Senate Community Affairs Legislation Committee, advised that the administrator in making the payments will need to know the number of services provided by each local hospital network and the efficient price of those services. A national efficient price has not yet been established. On available advice from the authority, activity based funding will initially be based on mean or median cost of a service rather than any notion of an actual 'efficient price'. This may have consequences for hospitals in terms of driving real efficiency, but also in ensuring the viability of best practice where providing quality service with good outcomes is above the median cost.

There has been little explanation of if, when, or how the system is to transition to a normative pricing model where value—or in the government's terms, the 'efficient price'—is properly defined. It has not been properly explained why another $40 million bureaucracy is required to process the payments when we already have an independent authority pricing the services. Similarly, there is not proper consideration given in this bill, including in the functions as to how this new body will coordinate its responsibilities with the other entities that have been established under the National Health Reform Act 2011.

In addition to the activity based funding, the agreement provides for the continuation of block grants in certain circumstances. Commonwealth funding for block grants, teaching, training and research will flow through the pool accounts to state managed funds. Public health funding and any top-up funding will flow through pool accounts directly to state health departments. All discretion of how that Commonwealth funding will be spent will rest with the state health ministers. This bill and corresponding legislation in each state will appoint a single administrator for all jurisdictions.

It is reasonable to ask why the Commonwealth would cede these powers to the state health ministers, bearing in mind that this is giving a discretion over Commonwealth funds. The answer lies very simply in this single fact: the Prime Minister put pen to paper on this deal, not because it was going to provide better health outcomes for Australia and not because it was going to drive efficiency or see better outcomes in the way in which we finance health in this country; it is simply because this Prime Minister was at a moment of weakness and wanted to sign a deal and wanted the Australian public to believe that she had brokered a deal. Greater scrutiny since that time shows why the states were so anxious to sign it, because they found a buyer or a purchaser in distress.

The administrator will be appointed after the Standing Council on Health has agreed to that person and the date, period and terms and conditions of appointment. Clause 232 provides that the Chair of the Standing Council on Health is to give each member of the council an opportunity to nominate an individual. All members of the council must agree on the appointment. A unanimous appointment may be an interesting test for cooperative federalism. The bill also sets out provisions for termination. The council can suspend the administrator from office if requested to do so by at least three state ministers or the Commonwealth minister.

The bill sets out the functions and powers of the administrator, which will also be contained in state legislation. The Western Australian government did raise a number of concerns in relation to the need for greater delineation between the functions of the administrator and those functions that will be performed on behalf of the Commonwealth and the functions it will perform on behalf of the states. It was argued that clause 238 of the bill was not fully consistent with clauses B26 and B27 of the agreement—in particular, that the Commonwealth bill should not confer the function of making payments from each state pool account in accordance with the direction of the state concerned but that this authority should be provided solely by state legislation.

The bill also provides for the states to confer powers and functions or impose duties on the administrator and a Commonwealth officer. This is intended to address the issues arising from the High Court's decision in the Hughes case, which found that an officer of the Commonwealth may only be conferred with powers under a state act with the express agreement of the Commonwealth parliament. The Western Australian government's submission to the Senate inquiry noted that the administrator will be appointed jointly and severally. Therefore, it was argued, the Western Australian parliament is able to appoint and confer powers on the administrator of the Western Australia state pool account. I note that the government has circulated amendments intended to address these concerns.

The administrator and the officials are not subject to the control or direction of any Commonwealth minister but must comply with written resolutions of COAG. The administrator will make payments from each state pool account in accordance with the direction of the relevant state minister but, in accordance with the government's amendments, this specific function will be removed from clause 238 of the Commonwealth's bill.

The primary objective of the administrator and funding body, as stated by the minister in her second reading speech, is to provide transparent arrangements for public hospital funding. Under clause 240, monthly reports must be provided to all jurisdictions, and made publicly available, on payments into and out of state pool accounts and state managed funds. An annual report must also be provided to responsible ministers and tabled, in the words of the bill, 'as soon as practicable' in the parliament of each responsible minister. It may assist the House if the minister would explain what time frames 'as soon as practicable' might entail and why a number of sitting days was not, or could not be, specified.

The Auditor-General may undertake a performance audit of the administrator. This involves an audit to determine whether the administrator is acting effectively, economically, efficiently and in compliance with all relevant laws. The Auditor-General must advise the other jurisdictions' Auditors-General of an intention to conduct a performance audit so that any other audits may be coordinated at the same time.

The bill also establishes the National Health Funding Body to assist the administrator in their role. The CEO and staff will be employed under the Public Service Act 1999 and will constitute a statutory agency. The bill, and this year's budget, are silent on the number of staff that will be employed by this nearly $40 million entity. Similarly, there is minimal detail of the responsibilities of the body, other than to 'assist the administrator'. Surely, for this level of expenditure, there must be a more defined role for the body, and it is incumbent on the minister in her summarising comments to advise the House how many new bureaucratic positions will be paid for from that $40 million.

The bill also contains provisions creating an offence for the disclosure of certain information, with relevant exceptions. There are additional provisions preventing the publication and dissemination of information by the Australian Commission on Safety and Quality in Health Care, the Independent Hospital Pricing Authority, the National Health Performance Authority, the administrator and the funding body that is likely to lead to the identification of a particular patient without consent.

Concern has been raised about the reliance on consent, rather than informed consent. The department advised the legal view is consent that must, by definition, be informed. In relation to protecting the affairs of a person, by not disclosing protected information, the minister said, 'The inclusion of these provisions is essentially precautionary, as it is highly unlikely that the administrator or the funding body will hold information about the affairs of a person.' We will have a watching brief on that issue.

One of the more interesting aspects of the administrator is that they will be appointed severally by the Commonwealth and the other jurisdictions. This appears to be a fairly unique arrangement in modern times. This means that the administrator is subject to various administrative laws and requirements. The minister used FOI as an example. There are also various archives, ombudsman and privacy considerations. The EM explains that proposed regulations will modify the Commonwealth acts so they can apply effectively as laws of the states, conferring appropriate rights and obligations on responsible state ministers and referring appropriately to state entities.

Today we are also considering the Federal Financial Relations Amendment (National Health Reform) Bill 2012. The bill replaces national healthcare special purpose payments with national health reform payments. It also provides for changes to funding responsibilities for aged and disability services agreed through the National Health Reform Agreement, with the exception of Victoria and Western Australia.

Finally, and not directly related to the health reform proposals, the bill makes minor technical amendments to GST determination. It has been stated that the changes do not affect the total GST determined. They remove the requirement to separately determine three components of GST where the data are not available or provide little or no insight into GST collections. In relation to health funding, the bill provides that payments will be determined by the minister by legislative instrument. However, the legislative instrument will not be disallowable. While this may not be in the interests of parliamentary scrutiny, it is consistent with subsection 44(1) of the Legislative Instruments Act 2003, as it concerns a scheme between the Commonwealth and the states.

The bill states that financial assistance is payable to the states 'on condition that the financial assistance is spent in accordance with the National Health Reform Agreement'. Under clause 70 of the agreement, the Commonwealth is to provide $16.4 billion through guaranteed top-up payments to the states and territories. This will occur from 2014-15, well after the next election. It seems to be a common trait of the Labor government to announce and seek praise for promises to be supposedly delivered in the distant future. There is no requirement for the states to spend the Commonwealth's so-called top-up payments on public hospital services. Clause A71 of the agreement says just that funding can be spent on ameliorating the growth in demand for hospital services. It is difficult to see how this will promote productivity or ensure the efficient use of Commonwealth funds. It seems state treasurers have secured a good deal, but there is little in this agreement to guarantee improvement in how funding is spent.

The minister in her second reading speech said:

For far too long the dialogue between the Commonwealth and the states on public hospital funding has been characterised by mutual blame and recrimination, with accusations of removal of funds by one level of government when additional funds were put in by another.

However, whilst this agreement sets the Commonwealth contribution as a proportion of the efficient price, the agreement at clause A60 provides that states will continue to determine the amount they pay for public hospital services. They will also determine the mix of those services and functions.

The mutual blame and recrimination the minister referred to is alive and well under this agreement. Just months after signing up, the Tasmanian Labor-Greens government pulled millions of dollars out of public hospitals and front-line services. Over $100 million was proposed to be cut from health and public hospitals, including a reported 20 per cent of the operating budget of the Royal Hobart Hospital. It is very difficult to see how this reform is delivering better outcomes for the people of Tasmania, who are suffering under the fiscal mismanagement of a Labor-Greens government.

Labor has always measured success on how much money is spent, rather than what is achieved by the expenditure. We have seen it with the school halls, we have seen it with pink batts, we have seen it with GP superclinics, we have seen it with the NBN, and we are seeing it with this bill before the parliament today—very little achieved for enormous sums; money that mums and dads and small businesses have worked hard for and that their taxes have contributed to. Somehow, Labor seems to take pride in that.

Health reform should be about more than bureaucracy and buying off state governments. It should be about using taxpayers' money more wisely and productively in our health system. It has been well documented in this House, and publicly, that health costs are rising faster than government revenues and at some point there will be a crunch. This government missed the opportunity to make genuine reforms to improve productivity and efficiency. That fact is now widely accepted and recognised. This government's attacks on productive areas of our health system are even more perplexing given this supposed reform agenda. The multiple billion-dollar cuts to private health will only put a greater burden on the public system and highlight the inconsistency of this government's approach. Around 10½ million Australians have private hospital cover and private hospitals perform 65 per cent of elective surgery. Disrupting this balance is a profound risk to our health system and is not consistent with any genuine efforts to improve the system.

In relation to public hospitals, the coalition supports sustainable and transparent funding. Despite the government's best propaganda efforts, Commonwealth government expenditure for public hospitals increased around 110 per cent between 1995-96 and 2006-07 and greater accountability measures were imposed on how the states spent the money. There is a responsibility on federal and state governments to ensure we have a viable and robust public hospital system going forward.

The coalition does not oppose the bills being debated today but does continue to hold concerns about the lack of focus on productivity, the bureaucratisation of the health system under Labor and the lack of evidence for improved outcomes for patients, as evidenced by the unfolding situation in Tasmania. The coalition will continue to carefully monitor and scrutinise the implementation of these reforms.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It is always a great pleasure to follow the shadow health minister, whose only contribution so far to the health debate as far as policy is concerned has been to introduce a private member's bill to exempt 37 dentists from having to meet their responsibility in relation to the chronic dental health program. I am pleased to see that the opposition is going to support the legislation, because it is a very, very rare occurrence that I stand in this parliament and actually speak to a piece of legislation that the opposition says it will support. As I said, the shadow minister's contribution to the health debate was not about providing better dental health services to Australian people but rather looking after 37 dentists who have not met the requirements for their payments under the chronic dental health program. I think all Australians can question whether or not the shadow minister really is across his portfolio and understands health issues. Whenever I speak on any health legislation I refer to the report of an inquiry conducted in November 2006 entitled The blame game: report on the inquiry into health funding. It looked at a number of the issues that are covered by this legislation relating to cost shifting between the Commonwealth and the states. The report was commissioned by the previous government, when the Leader of the Opposition was the Minister for Health and Ageing, and the committee brought down some really good recommendations. It was a unanimous report; it was supported by both sides of the parliament. I am sad to inform the House that the then government did nothing to implement any of the recommendations in that report.

After being elected, the Rudd government, firstly, followed by the Gillard Labor government, decided that health was a priority. They decided it was time to address the waste and mismanagement within the health system that had been rampant under the then Howard government, with, as I mentioned before, the Leader of the Opposition as health minister. So the Rudd and Gillard government embraced health reform.

The final health reform package that was taken to COAG delivers a national deal on health that will actually last. It takes into account the recommendations of The blame game report and that notes that there has been massive cost shifting over a very long period of time. I will give an example of that situation. I used to be a member of a state parliament. I stood in that state parliament and criticised the Commonwealth for cost shifting. I have also been in this place when the state, whose parliament I was previously a member of, was criticised for cost shifting. A situation has been set up where the Commonwealth can blame the states and the states can blame the Commonwealth. At the end of the day, the people that miss out are the Australian people.

That issue is at the heart of the reforms that the Gillard government has progressed. The Gillard government is investing $16.4 billion in the health system and imposing tough national standards to make sure that the money goes where it should. Because of that national deal, every person in Australia will benefit, no matter where they live. The legislation before us today is about putting in place those national standards. It is about making sure that the payments are made and that there is proper oversight of the national health reform agenda. Those reforms are delivering $16.4 billion to health in this country. More subacute beds and local hospital networks have already been set up. Medicare Locals has already been set up. This is about delivering health locally, based on the needs of the local community, and ensuring that all Australians get the health care they need. It is not about putting health money into insurance; rather, it is about putting health money into delivering health services.

Along with this, 6,000 doctors will be trained over the next decade. Within my electorate, under the previous government, something that was really noticeable was the shortage of GPs. It is an outer metropolitan area. In the Newcastle area, there was a chronic shortage of doctors. Try as I did to get the then Howard government, with the Leader of the Opposition as health minister, to address those issues, I could raise no interest.

I am pleased to report to the House that I am noticing a real improvement in the number of doctors available locally for people in Shortland electorate to attend to get the health care they need. This is a direct result of the government's investment in the training of more doctors. This government also realises the need for improvement in emergency departments and in reducing elective surgery. This government realises all these approaches need to be adopted so that the health of Australian people can be cared for.

I always find it hard, when I follow the member for Dickson, not to become too negative about what he has said to the parliament. I found his comments about the scheme and Barry Jones just ludicrous. Talking about it as a money-laundering exercise is, I think, appalling— (Time expired)

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Mr Deputy Speaker, I raise a point of order. The National Health Reform Amendment (Administrator and National Health Funding Body) Bill 2012 is about appointing the administrator in the National Health Funding Body. I think if the member could return at least in part to the subject instead of what she is doing it would be helpful.

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

The honourable member for Shortland will address the matters of the bill.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Certainly, Mr Deputy Speaker, but I felt that it was very important that I take the member for Dickson to task for the statement he made about Barry Jones and this being a joint money-laundering exercise. I am really responding to issues that were raised by the previous speaker in this debate. I feel that it is in the interest of good sound debate and of ensuring that the Australian people have the correct information that I respond.

As the member for Mackellar rightly points out, this legislation is about amendments to the national health reform agenda. It makes amendments relating to the administrator's functions and the Hughes provisions and to allow the funding body to assist the administrator in acting in his or her state capacity. The purpose of these amendments is to amend the bill to address concerns from the Victorian and Western Australian governments that the Commonwealth legislation should not confer on the Commonwealth appointed administrator powers to exercise functions that should be exercised only by state appointed administrators, such as making payments from state pool accounts within the National Health Funding Pool. There are four aspects to the amendments. In talking to those amendments, I need to say that these are essentially technical amendments, in that they do not change the operation of the administrator of the National Health Funding Pool; they just allow the function to be conferred on the office. They do not change the role; they allow it to be conferred on the office.

The bill as introduced reflects an agreement by Commonwealth and state officials on how these functions should be conferred in Commonwealth legislation and be mirrored in state legislation. After the bill was finalised the two jurisdictions I have mentioned changed their mind. Rather than having all functions conferred under both Commonwealth and state law, the states asked that state functions be conferred only under state law. So this was a request of the states.

These amendments remove from Commonwealth law the functions of monitoring state payments into the National Health Funding Pool and making payments from that pool. These functions will now be conferred on the administrator under state law. However, the Commonwealth law will still require the administrator to report monthly on payments of Commonwealth and state funding to local health networks, resulting in unparalleled public access to information about how money flows through the public hospital system. I believe that is a very important component of this legislation. It is imperative that those monthly reports be made. It is imperative that this amendment goes through the House, so as to ensure the functioning of the body. I am very pleased that the opposition is supporting it.

The other amendment that is being made to the national reform bill will enable the Commonwealth to make national health reform payments to the states and territories. This will require key changes, including replacing the national healthcare specific purpose payments with payments to public hospital and health services and ensuring that national health reform payments are made in accordance with the National Health Reform Agreement. The bill is being amended to change the date of effect from 1 July 2012 to the date that the act receives royal assent. This amendment is being made to ensure there is greater flexibility to make payments to some or all of the parties ahead of 1 July 2012.

This is fairly technical, but important, legislation. It will ensure that reform of the health system flows in the way the government intends. It puts in place proper accountability measures. I strongly support this legislation and am pleased that the opposition, for once, is not opposing legislation before the parliament and will be supporting the government on this legislation.

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

I am pleased to rise to speak on the Federal Financial Relations Amendment (National Health Reform) Bill 2012 and the National Health Reform Amendment (Administrator and National Health Funding Body) Bill 2012. These bills form part of the package of bills that give effect to the National Health Reform Agreement entered into between the states and the Commonwealth last year. The first of the bills before the House this afternoon does two key things: it sets up the Administrator of the National Health Funding Pool and it sets up a separate body called the National Health Funding Body. These arrangements are part of a new funding deal, under which public hospitals around Australia will be funded with activity based payments rather than block grants. In other words, if the cost of a hip replacement is determined to be $15,000 and you as a hospital do 10,000 of them, your hospital will get $150 million. The money will come from a new national funding pool; into the pool will go money from both the Commonwealth and the states. The second bill makes some changes to the existing law governing federal financial relations—that is to say, the basis on which the Commonwealth government pays money to the states. Those changes are necessary to give effect to these new arrangements specific to the health sector. According to the minister's second reading speech, these new arrangements will 'introduce the unparalleled transparency into public hospital funding that Australians require'. Later in her speech, the minister was obviously concerned that she had not been hyperbolic enough in her description of this legislation, so she said it would bring 'complete transparency'. As is usual with this government, there is a great gap in the new arrangements between the good intentions and the troubling reality. To be clear, a number of the ideas that underpin the reform are good—activity-based costing and funding as a principle makes sense; greater transparency and accountability also make sense and are principles to which we can all sign up. But the real question before us is whether this legislative package is going to deliver on the great expectations which have been stated in the minister's second reading speech and elsewhere. I put to the House that there are good reasons to be sceptical that it will in fact live up to these great expectations. I highlight three points in the brief time available to me.

The first point is that the process to get to this stage has been typically shambolic under this government, starting with sweeping promises by former Prime Minister Rudd which have been massively underdelivered. The second point is that the arrangements, including those given effect to by the legislation before the House this afternoon, are extraordinarily complex, and that gives good reason to doubt their likely effectiveness. The third point is that there is in fact no guarantee that these complex new arrangements will improve accountability and transparency for users of the health system. In other words, from the perspective of the customers of this enormous system, there is real reason to doubt that all this complex bureaucratic rearranging of the chairs is going to make much practical difference at all.

I turn firstly to discuss in greater detail the shambolic process by which we got to this legislation before the House this afternoon. The National Health Reform Agreement is the third form of such an agreement pursued by the Rudd-Gillard government. We might all remember that former Prime Minister Rudd was going to fix the blame game in health. That is what he promised at the 2007 election, and, in March 2010, he said to the National Press Club:

Today we are delivering on the most significant reform of Australia’s health and hospital system since the introduction of Medicare almost three decades ago.

… … …

The Government will deliver better hospitals by establishing a national network, that is funded nationally, and run locally.

For the first time in history the Australian Government will take on the dominant funding role for the entire public hospital system.

For the first time, eight state-run systems will become part of one national network.

To fund this Network, the Australian Government will take around one-third of the GST revenues and place it in a new National Hospital Fund to be spent only on health and hospitals.

We would all recollect that early 2010 was a very dangerous time to be a patient in a hospital anywhere around Australia, because at any point you faced the real and practical risk of waking up from an operation only to find the then Prime Minister perched on the end of your bed, chatting cheerfully to you and surrounded by a scrum of television cameras and microphones. Happily, that danger is now past, but who can forget the little of shiver pleasure that seemed to go through the then Prime Minister's body whenever he said that the Commonwealth would be the dominant funder of the health system? Who can forget how he leapt on this issue to disguise his complete collapse on climate change, which went from being the 'greatest moral challenge of our time' to something he just dumped when it all got a bit too hard?

The long and tortuous path towards these bills being before the House this afternoon was characterised by hopeless overreaching and overpromising by the Rudd-Gillard government in its first incarnation. Who do we know this from? We know this, interestingly, from the former minister for health, who spoke publicly just a few weeks ago of the chaos behind the scenes in the lead-up to this announcement, with the then Prime Minister giving her as the minister only a few days notice of his plan to announce a federal takeover of the health system. As the historical record shows, the guts of the April 2010 plan were soon scrapped; key elements have disappeared, cast onto the scrapheap of history. The idea that the GST would be held back from the states to fund health activities and the idea that the Commonwealth would become the majority funder of public hospitals are both gone—as is, of course, the notion that there would be one national network of hospitals.

Version 2 along the lengthy and tortuous road towards the legislation before the House this afternoon came in February 2011 as the new Prime Minister sought to differentiate herself from her predecessor. But, again, a complex series of negotiations needed to occur before an announcement could finally be made in August 2011, and what was announced in August 2011 was different in form again to what had been spoken about earlier in the year.

Emerging from the potted history I have just gone through there are a number of points to bear in mind as we weigh up the merits of the bills before the House this afternoon. The first is that the chaos at the very heart of this government and at the very height of this government has affected sound administration and sound public policy in the health field as in so many other fields. Secondly, what we are seeing in the bills that the House is considering this afternoon is very different to what was originally promised. Thirdly, while this government has a strong political incentive to talk up the scope of the National Health Reform Agreement and the scope of the changes implemented in the bills before the House this afternoon, they in substance fall a great deal short of the vaunting ambition first announced by then Prime Minister Rudd and of his bold promise to end the blame game.

I turn now to discuss in more detail the second proposition I put to the House this afternoon. It is that the arrangements embodied in the bill before the House today and in other parts of this legislative scheme are extraordinarily complex and involve the establishment of a plethora—a multiplicity—of new bureaucratic organs. Three new statutory bodies have already been established to implement this package of reforms. The first is the Australian Commission on Safety and Quality in Healthcare; the second is the National Health Performance Authority; and the third is the Independent Hospital Pricing Authority. The bill before the House this afternoon brings into being two more bureaucratic bodies. Lest we be troubled that we have an inadequate supply of such entities, this bill comes to the rescue with, first, the administrator of the National Health Funding Pool; and, secondly, the National Health Funding Body. I particularly commend the imaginative person who came up with the term 'national health funding body'. They were on fire that day!

Why are there two separate entities established? It is quite mystifying. They have the same essential function—they dole out the money from the National Health Funding Pool—and yet we have two separate entities. It is almost as if some demented professor of public administration had set himself the personal challenge of coming up with the most complex scheme he could possibly imagine. But the sad reality for taxpayers is that all of us will be paying for the new public servants to be hired and employed by these two new entities as well as the plethora and multiplicity of other entities which I have already described.

The Department of Health and Ageing told the Senate Finance and Public Administration Legislation Committee that the national health funding body will have a staff of approximately 120—'But don't worry,' said the department of health to the Senate committee. They assured the Senate committee that they are going to get much bigger savings in head count from the department's strategic review, so there will be overall head count savings in the health bureaucracy. I have to inform the House that I do not believe it for a second. New bodies mean new bureaucrats, more money spent on overhead, more money spent on administration, new empires being built, scope for new turf battles and new and blurred accountabilities, and taxpayers up for paying more to fund this elaborate new structure.

Surprisingly, even such an unlikely authority as the former Minister for Health and Ageing agrees with my scepticism about this new elaborate bureaucratic administration. This is what she said last year:

It's not appropriate for us to—and we've made it very clear we don't want to increase the size of the bureaucracy—it's not appropriate for us to establish an authority where there is not a need to do so. There will need to be people who can process essentially the cheques that need to be paid through to local hospital networks, but it doesn't require an authority.

Subsequently there was a change in policy, I regret to say. For one brief, shining moment I thought the member for Gellibrand was going to establish herself as somebody who cares about cost efficiency and sound financial management. Tragically, this brief burst of sunshine did not last for long and this government soon returned to its overwhelming love of establishing new bureaucratic organs and entities.

Indeed, I have asked a question on notice in parliament of every parliament minister asking how many new departments, agencies, commissions, government owned corporations or such bodies have been created in their portfolios since the election of the Rudd government. Not all of them have fessed up, you will not be surprised to hear, but so far they have admitted to 34 new bodies across the spectrum of government activity and it is clear the new health minister is going for gold. She is determined to establish a plethora of new bodies such that her ministerial colleagues can only shake their heads in envy.

As any expert in organisational behaviour will tell you, complex structures, unclear lines of authority, duplication of functions and lack of clarity about who is responsible for what are a recipe for terrible organisational performance. If you look at the complex structures set up with the so-called national health reforms, you will see that is exactly what we have. There are, let me remind you, eight new bodies: independent hospital pricing authority, national health performance authority, Australian commission on safety and quality in health care, national preventative health agency, mental health commission, Medicare local Australia and administrator of the National Health Funding Pool—not to be confused with my favourite, the national health body. With the simultaneous establishment of so many new organisations, the scope for confusion and turf war is extraordinary.

Even more troublingly, key details of the new arrangements are not yet finalised. For example, the Commonwealth has set itself the task of devising by December 2012 a national strategic framework to set out agreed future policy directions and priority areas for GP and primary health care. You can only imagine the joy that that particular task would bring to any self-respecting bureaucrat's heart. The Australian Medical Association had this to say:

The real health reform will come with system redesign and proper service planning at the local level through the local hospital networks—

in other words making the point that, for all of this creation of new boxes in the organisational structure, the real work has not yet been done despite the bold promises from this government.

I turn lastly to the question of whether any of this is likely to actually improve accountability and transparency for health consumers. I modestly submit that there are very good reasons to be sceptical that it will. I predict there will continue to be squabbles about whether the Commonwealth is paying enough to the states. It is true that we have some new interposed bureaucratic agencies through which money will flow from the Commonwealth to the states. It is true that we have a new formula in accordance with which the money is paid. But I put to you that, if a hospital in a state does 10,000 hip replacements—to continue the example I gave at the start—but actually spends $20,000 per hip replacement, it will have spent $200 million and the relevant state health minister will be pointing the finger at the Commonwealth minister when only $150 million is supplied. This bureaucracy will create enormous distraction and will impose a burden of compliance on the customer-facing end of the system: the hospitals. At the end of the day, all of this will largely be invisible to patients, who will see very little difference in what they get.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of these two pieces of legislation. One is the National Health Reform Amendment (Administrator and National Health Funding Body) Bill 2012 and the other is the Federal Financial Relations Amendment (National Health Reform) Bill 2012. If you listened to the member for Bradfield, you would think that Labor controlled government in every state and every territory. In fact, that is not true. In fact, the National Healthcare Agreement was agreed by COAG, the Council of Australian Governments formed by Labor and coalition governments at different levels, in 2008 and amended in July 2011. Perhaps the member for Bradfield should consult with his state colleagues in the Liberal Party, the Liberal-National parties, the Country Liberal Party and other parties like that—whatever guise or description they call themselves in the state or territory—because his conservative colleagues signed up for this agreement in 2008 and signed up for it in July 2011. He did not say that in his speech today at all. In fact, he did not tell this House that they agree at a state level to this process.

The problem with regard to health funding in this country has been driven by mutual blame, suspicion, accusation, Canberra bashing, state bashing and the like year after year. So the agreements we came to in 2008 and 2011 were about increasing the capacity of the federal government to contribute more to improving transparency. That is why it did not matter whether it was a chief minister or a premier of a Labor or Liberal state. They agreed to a process to improve transparency, reporting and auditing of each separate state account in the funding pool; provision of advice by the administrator being set up under this legislation to the Commonwealth Treasurer on calculation of Commonwealth payments to each state minister; the preparation of special-purpose financial statements in the operation of each state pool which the states are contributing and the auditing of each state pool by state auditors-general; and the inclusion of special-purpose financial statements in the administrator's annual report. This process was agreed to by both sides of politics at a state and federal level, but those opposite cannot bring themselves to say 'yes' to just about anything. It is 'no' to this, despite the fact that their coalition and conservative colleagues at a state level support this.

Why do the states support this? They know what will happen when we establish this process and the government at this level commits more money: it will make a difference. You will see the Commonwealth bearing greater costs associated with the establishment and ongoing costs of the administrator and the funding body, and you will see an increase in contributions by the Commonwealth for the growth of hospital and health funding to 45 per cent in 2014-15 and 50 per cent from 2017-18 onwards. We have guaranteed that we will provide $16.4 billion in additional efficient growth funding from 2014-15 to 2019-20. We have also put forward an additional $2.8 billion into the system.

Why am I giving these figures? Because it is true that the coalition offered nothing at a state level in my home state at the last state election and at the last federal election: not an extra doctor, not an extra nurse, not an extra hospital bed, not an extra ward nor an extra hospital. Complaints, whingeing, carping, moaning, griping and grudging—that is what we get from those opposite. We do not get dollars and cents on the table. On this side of the House there are proposals to establish apparatus, agreed on a bipartisan basis and with additional money on the table—double the kind of funding that our previous coalition government from 1996 to 2007 offered the Australian people.

We are seeing substantial funding increases. There are structures or frameworks being established under this legislation and, as I said, some block funding services provided. This is changing the way we do things, and it has been agreed to by the states: an administrator will advise the Treasurer about who will pay into the national health funding pool, amounts calculated by the administrator and an emphasis on activity funded services. That is what is happening with this legislation. This legislation establishes the administrator of the National Health Funding Pool.

I do wonder sometimes why coalition members actually stand for federal politics. They seem to be against government and they seem to be against anything that governments do. But we know that government, private enterprise and community services actually make a difference. The coalition's hatred of and hostility towards government seems to be endemic—it seems to be in their DNA. We hear members opposite talk about this sort of thing and all they want to do is criticise. We have established the National Health Performance Authority, which those opposite opposed—inexplicably. I am simply amazed that they did. We have established the Independent Hospital Pricing Authority as well.

The coalition cannot consult with their colleagues at a state level about these types of things. I do not know whether they believe that the only way to communicate is by carrier pigeon, but certainly email and phone still operate. I wonder whether the Leader of the Opposition should ring up Barry O'Farrell and see what his attitude on this is? And Colin Barnett, and even Campbell Newman, because the states are backing us on this—except that those opposite, their federal coalition colleagues, cannot bring themselves to do so.

Let us have a look at our record, because the legislation here establishes a framework for a new system by which we will provide funding, and then let us look at those opposite. They do not say this. They do not admit it, although the then health minister back just before the 2007 election had to grudgingly and with contrition admit it, that the Australian Institute of Health and Welfare was correct in saying there was a diminution under the coalition government of funding for health and hospitals and that the states and private sector had to take up the slack. Grudgingly, he admitted that on the eve of the 2007 federal election. Conceding the veracity of that report was pretty tough for them, I am sure, because he had been there for a long time—the minister for health in the coalition government. And now he is in a different disguise—a different label. He is actually the Leader of the Opposition—the same man who ripped $1 billion out of the health system when he was there.

We have massively increased the funding and we cooperated with the states. That is what this legislation is all about. This legislation goes hand in glove with what we have seen in terms of the budget: the extra $515 million for dental health funding and trying to redress the problems in public waiting lists—$400 million for a blitz on the public waiting list. What did the coalition do when they got into power in 1996? They abolished the Commonwealth Dental Scheme, forcing low- and middle-income earners onto long waiting lists that stretched out further and further again. I saw the same thing when I was the chair of the Esk health reference committee, and I saw it when I was on the Ipswich and West Moreton Health Community Council, as the waiting list expanded further and further at the Ipswich general hospital and its satellite hospitals in and around the Ipswich and West Moreton region. And why was that? Because the coalition steadfastly refused to accept that their policies were a failure. They refused to inject serious money to redress the problem. We are doing that as part of the budget, as part of the arrangements covered by this legislation. We are making sure that dental care for the disadvantaged is a priority, and that people do not face those waiting lists and those barriers to getting the health care they need, because poor teeth result in illness, injury and other problems. I am very proud of that, as well as extra provisions on bowel cancer reform, and I am very proud this government does it as well.

We are making a difference in the injection of funding in health and hospitals and in the private sector. I am pleased to say that in my own electorate the bulk-billing rates under this government and the health programs have reached a record high in the March quarter of 81.2 per cent of GP services bulk-billing. But in Blair the rates are so much greater. I found that out today when I looked into it. The rates for GP visits in Blair are 90.3 per cent of GPs bulk-billing; rates for pathology are 89.2 per cent; and rates for optometry are 99.1 per cent—an overall rate of 83.1 per cent. That is a big difference. I remember when it languished in the sixties and seventies under the previous Howard coalition government.

We are establishing a national health reform framework under this legislation. It is going to make a difference. It is going to make sure that what we establish in consultation with the states will see the federal government take a greater proportion of responsibility. Those opposite cannot bring themselves to agree that we are securing the future of Australian health by increasing funding. We will see how they vote on health bills in the future, but so far they do not seem to acknowledge their failures of the past. They do not seem to acknowledge that this is a bipartisan approach across all levels of government to take health and hospital funding into the future; a framework and an agreement that is devised by all levels.

I support this legislation. I think it will make a difference in my area. We are making a difference, as I said, in the bulk-billing rates. I note the Senate report on this particular legislation supported it, and it was very clear in what it had to say about it. I note that the costs under this framework will be borne in large part by us. I note the fact that it will be open and transparent. I note the COAG reforms. I note that the communique was signed off by all levels of government and by all sides of politics, and I just wish those opposite would finally recognise that this is too great an issue to be subject to partisan bickering by those opposite. I support the legislation.

Debate adjourned.