Helen Polley (Tasmania, Australian Labor Party) Share this | Hansard source

On 7 March, the Senate Finance and Public Administration References Committee released its report Implementation of the National Health Reform Agreement. The focus of the inquiry, which featured 59 submissions and a public hearing in Melbourne, was on adjustments in Commonwealth funding for state hospital services under the Health Reform Agreement. The dissenting report from Labor senators, including me, clarifies the reasons behind this adjustment in Commonwealth funding to the states, which was announced by the Commonwealth Treasury on 3 November 2012.

The National Health Reform Agreement, announced in partnership with the states and Territories, in August 2011, ensures that more transparent funding of public health is based on services delivered and significantly increases access to care, to drive improved efficiencies. In the coming years Commonwealth funding will be directly linked to the actual level of services delivered by public hospitals, with funding being provided directly to local hospital networks. No longer will the states receive lump sums of cash from the Commonwealth. Instead, funding will rise as health service levels rise. It is a more efficient method of health funding and one that this government can be proud of.

Regardless of what you hear from those opposite in the chamber, the Commonwealth funding adjustment was undertaken in accordance with the terms of the Health Reform Agreement. All jurisdictions knew the agreed funding formula set out in the Intergovernmental Agreement on Federal Financial Relations. They knew that this formula was calculated with reference to population estimates, a health price index and a technology factor. It was no secret they signed up to it. It is a straightforward formula which reflects the costs of delivering public health services.

Prior to the release of the report, the committee held public hearings in Melbourne, as I said, and committee members heard detailed accounts of some of the false allegations that have been thrown at this government. One particularly revealing insight was provided by the Victorian branch of the Australian Nurses Federation. The committee heard from the branch's representative, Mr Paul Gilbert, that the Victorian government may have acted to ensure that the funding adjustment was implemented in a way that maximised service cuts to Victorians. Mr Gilbert stated:

It has been put to me that there was one example where a health service proposed to deal with the cuts by way of not closing any beds or reducing theatre sessions and that that proposal was rejected in favour of one that closed beds and reduced theatre sessions.

He went on:

I think [Victorian Health] Minister Davis … ensured that the impact was as severe as it could be in order to generate the positive outcome.

I must obviously put on the record, although I am sure everyone here is aware of this—I know Senator Ryan over there is—that Mr Baillieu is no longer the Premier. But the former Premier Baillieu's government strategy was to blame the Commonwealth and not own up to the decision it made to cut $616 million from the Victorian health system.

The dissenting report also noted that the Victorian Liberals departed from the normal process and refused to issue quarterly reports of elective surgery lists and emergency department waiting times. They did not enter into the statement of priorities with the state's Department of Health. They also failed to provide the independent Health Reform Agreement administrator with details on how they allocated Commonwealth funding. It was not like these were discretionary tasks that depended on the mood of the Baillieu government at the time; they were standard process. This information was not provided because the cuts to Victorian services were already intended. The Health Reform Agreement funding adjustment presented the Victorian Liberals with the perfect opportunity to attribute blame to the Gillard government. It was for this reason that the health minister decided to step around the dishonest Baillieu government and provide an emergency $107 million health rescue package to the state's Local Hospital Networks.

It was an extraordinary measure, but one that was absolutely necessary because the Gillard government was not going to let the Victorian Liberal government harm the health prospects of all of Victorian citizens. You should never play politics with your state's health priorities, but that is exactly what the Victorian Liberal state government was doing. We will have to wait and see how the Napthine government approaches the funding of the state's health services. We can only hope that he approaches this task with a greater sense of responsibility than his predecessor did.

The dissenting report also points out that the Health Reform Agreement actually features a dispute resolution clause that could have been employed to handle these health funding matters. It has not been triggered by any government, including the Baillieu government. If the Victorian government were genuinely concerned that the Commonwealth's actions were unjust, they could have used it at any time. But of course they did not do so, and we know why they did not do it: because, instead, all they wanted to do was play politics; instead, as I said, the Victorian government preferred to rely on the Commonwealth funding adjustment as a misleading rationalisation of their own funding shortfalls. The Health Reform Agreement ensures that all states will receive additional Commonwealth funding for public hospitals compared to the previous arrangements. Some states have refused to meet the requirements of the agreement and properly perform their role as assistant managers, and this has had disastrous results for the service delivery in these states.

The Gillard government—that is, our government—is 100 per cent committed to reforming Australia's health system, and I would like to again encourage all states to transparently reveal how Commonwealth funding to the health system is being spent. All state governments, including the Victorian government, need to take responsibility for cuts in funding that occurred independently from the adjustments in Commonwealth funding announcements last year. We know very well on this side what Tony Abbott, when he was minister for health, did. He gutted health by $1 billion—