Dr BLEWETT(3.24) —There should, after the farcical events of the last four days, be very little reason to argue the ill-conceived nature of the Government's hospital funding proposals. What was non-negotiable on Friday has become highly negotiable, at least for one of the States, by Tuesday. Indeed one might now describe the new federalism as simply a surrender to the noisest and most obstreperous of the little Australians, Joh Bjelke-Petersen, without regard for the interests of the other States or for the logic of the agreement, if there be logic to it, which was presented to the Health Ministers last Friday. However, it is not simply the flaws in execution of the agreement that we on this side of the House are attacking. We believe there are far deeper flaws than the farcical events of the last few days regarding the hospital funding agreement.

We believe the fundamental principles of those funding proposals are wrong. It is, first of all, simply a reactionary step in late twentieth century Australia to abandon a national government role in determing priorities for the hospital sector. We believe that it is simply a backward step to abdicate at this point in the development of the nation responsibilities of the Commonwealth Government towards the hospital sector. Although the Minister for Health (Mr MacKellar) often in very vague ways clothes his arguments for his new policies in the report of the Jamison Commission of Inquiry into the Efficiency and Administration of Hospitals, it is quite clear that the Jamison Commission opposed the proposal to hand back hopital funding to the States through general purpose grants. This is what the Commission had to say:

The Commission's view is that the existence of some form of identified funding for health services has come to be generally accepted as a means of ensuring that a high standard of health care is available across State boundaries for the Australian population.

Although transitionally there may be some identification, it is clearly and explicitly the intention of the Government simply to include hospital funding in the general purpose grants to the States so that it would be unidentified, untied and quite contrary to the beliefs of the Jamison Commission. The ideal of that Commission was that there should be a rough equality of services across State boundaries. It did not believe that this could be achieved unless there was a significant contribution by the Commonwealth Government. The ideal of a Commonwealth contribution to maintain a rough equality of services across State boundaries was supported by most of the national health agencies in this country. That ideal is now being undermined by the present policies to which the Federal Government is committed. Indeed, the Federal Government's position is basically an abdication of responsibility for the public hospital sector.

I have argued before that this will ultimately lead to a fragmentation of service provision. For example, it is already apparent that quite different means test proposals will apply in most of the States. Queensland has indicated quite clearly that a means test will not be introduced into the free hospital system which it has had for a generation. New South Wales and Tasmania are both looking at applying more generous means tests than those propounded by the Commonwealth Government, which has a very narrow definition of need. No doubt some of the other States will simply follow the Commonwealth plan and have a fairly narrow definition of 'socially disadvantaged'. Quite different sets of means tests will apply in some States. In one State at least there probably will be no means test at all. This will lead to quite different health cover provisions in each of the States; the health cover needs in each State will be different. We are then left with questions concerning not only the variety of health covers but also the mobility of Australians: Will Australians need to adjust their health cover as they move from State to State? The whole of the implications of this abdication of responsibility are really quite foreign and quite antagonistic to the development of society in the late 20th century.

When honourable members on this side of the House make these points they are often subjected to quite false reasoning from honourable members opposite. Members of the Australian Labor Party are not suggesting that a rigid uniformity should be imposed by the Commonwealth on the States. We are suggesting that the Commonwealth should participate with the States in the determination of priorities for public hospitals in this country. It should do so not just on one occasion; there should be regular participation by the Commonwealth Government with the States in determining national priorities for public hospitals in this country. We are not suggesting that the participation should be practised as it is presently being practised by the Minister; that is, simply at the crude level of squeezing funds and letting the States pick up the burdens. We are suggesting that there should be genuine co-operative federalism in the health field, not the unco-operative federalism that has characterised this federation in recent weeks. Indeed, the whole evolution of the present hospital package is a classic example of unco-operative federalism. There has been no effective give and take. There has been no genuine consultation between the Commonwealth Government and the States on the Jamison proposals. In order to support the statement I have just made I will quote the statement made by all the State Health Ministers: It states:

We observe that we have never been consulted in the real sense of the word and at no time prior to its recent decision has the Commonwealth indicated any clear intention to the States.

Unless the Government is going to say that all these State Health Ministers are simply money grabbers, that they have simply got no care or concern for health issues, then that statement is a very clear repudiation of the whole unco-operative approach that has been adopted by the Government in response to this matter. Indeed, I think it is true to argue that there has been more consultation with powerful vested interests-the private health funds and the Australian Medical Association-than there has been with the States. I am confident that the Government and the Minister have talked more with those vested interests who have done very well out of this package than they have with the States. Indeed, in many ways the package was designed to serve the interests of the vested interests in the health sector rather than to serve either the interests of the States or the people of this country. Our first major objection to those proposals-these inefficient and ill conceived proposals-is that we oppose the abdication of the Australian Government from any responsibility in the public hospital sector.

The second principle that we oppose is the imposition of the means test at the point of service delivery. The Government, of course, is now attempting to ensure that a means test is imposed by the financial sanctions that it is using against the States. I will come back to that point. The Minister often clothes his rhetoric in the words of Jamison. The Jamison report is a conservative report, very sympathetic to the values of Government. Yet this report referred to the means test. First of all, the report echoes the views of the Minister on the principle of the user pays, so it is very much sympathetic with his line. The report states:

Because the Commission believes that those able to pay should do so, and that they should be encouraged to do so through insurance, it gave much consideration to the reintroduction of a means test for free access to both inpatient and outpatient services at public hospitals. In doing so, it recognised:

that sickness often generates costs other than medical costs-for example, cost of the breadwinner's income for part or all of the term of incapacity;

that hospital administrators who gave evidence to the Commission were almost unanimous in their opposition to such a proposal;

that collection of debts has been a difficulty in the past.

It considered various proposals for formalising such a means test. It found major objections to all of them.

The best it could suggest was possibly an informal income test without sanctions. That is certainly not the view of the Government. The Jamison committee looked at it and discovered, therefore, that not only did most hospital administrators oppose it, not only did it create enormous inefficiencies in relation to debts, but also it recognised, of course, that with sickness there are a whole lot of after costs besides simply the medical bills. Therefore the Jamison committee opposed the kind of rigorous means test which this Government is trying to impose on the States.

Of course, if the Government is successful it will create in the hospital sector a two-tier system. We will have the public sector primarily catering for the poor, the disadvantaged, and also, of course, for the high cost technology activities. All the straight forward, high profit surgery will be channelled into the private sector, which, of course, has received increased subsidies for those very types of surgical activities which the Jamison committee pointed out were one of the major cost problems in this society-the excess elective surgery in Australian society. Yet, this Government, supposedly worried about costs, provides a specific subsidy to encourage that activity in the private hospitals. All of the double talk of the Minister cannot cover that up. Indeed, on this issue of the means test we have really had the most extraordinary double talk from the Minister. During the election campaign, when of course, it might have worried the voters if they were told that in six months time the Government was going to endeavour to impose on the public hospitals a means test, the Minister was very strong on this point. He stated:

. . . there was absolutely no truth in the statement that the Government was planning to restrict patients' free access to public hospitals by reimposing a means test for hospital care.

With the need to win the election only six months ago the electors were assured that no means test would be imposed. Six months later the Government is going all out to compel the States to impose a means test. But when questioned on this the Minister said:

A decision as to whether a means test will be imposed for access to public hospitals in entirely a matter for the States concerned.

That does not have anything to do with the Minister. That is no explanation whatsoever. If one had read the Minister's statement of a fortnight ago, one would see that it clearly implied that unless the States imposed a means test they would have financial sanctions imposed upon them. The Minister deliberately set out-whatever he said yesterday-to compel the States to impose a means test. Let me just show how this is to be done. First of all, each of the States has had a very significant cutback in funds. I ask the permission of the Minister to incorporate a table in Hansard to try to suggest some of these fund cuts that have been made.

Mr DEPUTY SPEAKER (Mr Millar) —Is leave granted?

Mr MacKellar —It is wrong, but leave is granted.

Dr BLEWETT —In order to encourage a proper debate in this country I would be very happy for the Minister to come forward and provide us with a correct table.

Leave granted.

The table read as follows-

SUMMARY OF ESTIMATED HOSPITAL GRANTS TO STATES UNDER NEW HOSPITAL ARRANGEMENTS

Table

1 2 3 4 5 6 7 8 9

New revenue raising capacity

1980-81 proposed by Commonwealth,

Com. claw-

est. Com. with by source

back as

exp. for add 10%

% of orig.

Hospital for Bed Outpatients

Total Com. grant

CHC and 1981-82 charges Inc. in and com- Total Com. Com. (Table 7

and School (full up to $80/ insured pensation revenue clawback payments as % of

dental year) $115 p.d. patients charges raised (60%) 1981-82 table 2)

$m $m $m $m $m $m $m $m % NSW 510 561 73 20 35 128 77 484 14 Vic. 339 373 48 30 20 98 59 314 16 Qld. 199 219 10 58 39 107 64 (48)* 155 (181)* 29 (22)*

SA 133 146 16 25 4 45 27 119 18 WA 158 174 12 13 13 38 23 151 13 Tas. 46 51 3 14 3 20 12 39 23 NT 25 28 1 7 3 11 7 21 25 ACT n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

* *

* Could be more if the fees raised (Table 6) are greater than estimates.

* Effect of Queensland adjustment 12 May 1981.

Mr MacKellar —What is 155 plus 16?

Dr BLEWETT —I will explain each detail in a moment. We then can have a debate about the accuracy of this table and about the statements which are being made by various State Ministers. The Health Ministers have stated:

We believe the Commonwealth financial decisions are arbitrary and dangerously unfair to the people of Australia.

Mr Borthwick, the Liberal Minister for Health in Victoria, says that the figures are demonstrably wrong. If one looks at them what the Commonwealth has tried to do is to impose a financial sanction in order to make the States charge full public hospital charges on all people except the very narrowly defined poor. The Commonwealth clawback from each of the States would be: For New South Wales $77m; Victoria $59m; Queensland $64m, until yesterday; South Australia $27m; Western Australia $23m; Tasmania $12m; and the Northern Territory $7m. Let me show how significant that sanction is. It represents a percentage cut. In each case this is quite high in order to persuade the States to do what the Commonwealth Government wants them to do. For New South Wales that cut is about 14 per cent of what the State would otherwise have got; for Victoria it is a cut of 16 per cent; for Queensland, until yesterday, it was a cut of 29 per cent, but because of the special back door arrangement that appears to have been reduced to 22 per cent; for South Australia it is 18 per cent; for Western Australia 13 per cent; for Tasmania 23 per cent-almost a quarter-and for the Northern Territory 25 per cent. If we take just the States and leave out the Northern Territory, it appears to me that Tasmania, since the back door deal with the Premier of Queensland, is the most seriously disadvantaged State. Of course, the Queensland decision means that if those figures had any logic at all, they have now been undermined. We want to know on what basis those calculations were made. We want to know what is the logic behind them. We want to ask the Minister whether there is any logic across the board now that one State has received this special grant.

Finally, let me say that last week the Minister pilloried the position of the Labor Party in crude and dishonest terms. We accept the need to cover the costs in this country, but we say that the costs should be covered by an income related payment so that every Australian contributes to health care according to his means and takes from health care according to his needs.

Mr DEPUTY SPEAKER (Mr Millar) —Order! The honourable member's time has expired.