Senator COONAN (7:07 PM) —At the start of this parliamentary year one of the recurring issues that is trotted out for public gaze is the level of federal funding for health and the role of the states in delivering health services, especially so in my state of New South Wales. It is an issue which generates a great deal of misinformation. In New South Wales the Carr government is constantly trying to avoid scrutiny of its own mismanagement of health by blaming the Commonwealth for any shortcomings and shortfalls in the New South Wales health budget. This week Labor is at it again.

Public hospital waiting lists in New South Wales for elective surgery topped 50,000 for the first time. There were calls, yet again, for the New South Wales health minister, Dr Refshauge, to resign. The only excuse he can think of is that the blame lies with the Commonwealth. It is a pretty lame excuse and it is an excuse that simply does not stand up to scrutiny.

First of all, the states have a great deal of autonomy in how they use Commonwealth funds granted to the states. Under the present arrangements, the states and territory governments determine the total funds available for public hospitals, budgets for individual hospitals, the number and location of hospitals, and the services available for hospitals. They determine the level of service, the areas of service and the needs of their constituents. The Commonwealth provides the funds and the states attend to their distribution.

But much of the argument about health funding relates not to the Commonwealth health distributions but to how state treasuries actually allocate financial assistance grants. These are non-specific purpose grants from the Commonwealth, and it is up to the states to determine how they are actually allocated. But the state health bodies argue their share of these funds should be in the same proportion as the share they get from the state budget. Therefore, if a state health department receives, say, 25 per cent of the budget, it argues it should receive 25 per cent of the financial assistance grants made available by the Commonwealth to that state.

But, not surprisingly, the state treasuries do not always see it that way and in the continuing battle for funds the Commonwealth is often targeted unjustifiably as being responsible for holding back funds to state health bodies. Spats between state bodies are harming health services and nowhere is this sort of harm more evident than in New South Wales.

As I said, latest figures in New South Wales indicate elective surgery waiting lists have now topped 50,000 for the first time. There are now 50,778 people waiting for surgery and, just as alarmingly, 4,602 people have been waiting 12 months or more. Those who do manage to have surgery without waiting the 12 months or more still have to cool their heals for an average of 1½ months compared with only 27 days a few months ago. But like an oft repeated mantra, the Carr government has blamed what it claims are Commonwealth funding cuts for this situation.

But the Carr government simply ignores the facts. In 1995 to 1996 Commonwealth outlays on New South Wales hospital services was $1.65 billion, up from $1.3 billion in 1990 to 1991 and just under one-third of the $5 billion national total. The New South Wales slice of the total Commonwealth health services cake was $6.1 billion in 1995 to 1996, up from $4.4 billion in 1990 to 1991. Again, the slice represents almost one-third of the national total of $18.6 billion.

The Commonwealth's contribution has increased every year. Yet Mr Carr and Dr Refshauge continue to claim that these problems are the result of claimed Commonwealth funding cuts. This is totally incorrect, and it is timely to examine the level of funds provided by both the Commonwealth and the states to see where the financial burdens actually lie.

Under the 1988 to 1993 Medicare agreements, total Commonwealth hospital funding grants to states rose to $3.933 million from $3.80 million in 1988-89, a three per cent rise each year in real terms. In 1993 to 1998, Medicare agreements maintained the funding and indexation components of the previous agreements while adding new funding components, the implementation of which resulted in an additional $2 billion in Commonwealth funds for hospitals over five years. It is quite clear already from these figures that the Commonwealth is meeting its commitments and that the Commonwealth has continued to inject funds into the Australian health system.

In the 1992-93 budget, the Commonwealth injected an additional $1.6 billion into hospital funding over six years. Following the Premiers Conference in 1993-94, it was raised to $2 billion as a result of the agreement to pay New South Wales and Victoria Medicare guarantees. These payments honoured the Commonwealth's guarantee to the two states that they would receive increased financial assistance grants. These amounted to $131 million for New South Wales and $112 million for Victoria. The net result of these factors was that Commonwealth funding to the states increased by about $500 million, or 11 per cent, in 1993 to 1994 and a further $216 million, or three per cent, in 1994 to 1995.

In sharp contrast to the Commonwealth's contribution, state funding for public hospitals has failed to show any steady growth. The Commonwealth Grants Commission has researched the funding and found the states contribution to health funding has been maintained at 1990-91 levels over the five years to 1996. On the other side of the coin, the Commonwealth's contribution has risen more than 30 per cent in the same period. Of course hospital funding has fared no better from the states. It, too, has been maintained at 1990-91 levels while the Commonwealth's contribution has risen by about 25 per cent.

This trend is confirmed by analysis published by the Australian Institute of Health and Welfare which shows that the Commonwealth share of expenditure on public hospitals rose to 49 per cent in 1994 to 1995 from 42 per cent in 1989 to 1990. In the same period, the states share fell to 42 per cent from 47 per cent. Under the current 1997-98 budget estimate, Commonwealth payments to the states under the Medicare agreement rose $175 million, or 1.5 per cent. Of this, 99.9 per cent was for the states with only $7.2 million being for national projects. The funding then, despite some claims to the contrary, was not reduced but was maintained at the funding levels of the previous budget. I will not go into the problems that the Commonwealth has experienced with cost shifting.

The next round of hospital funding grants will not be finalised until June this year. It gives us some time to review some of the central issues, including the collection of a full year's data to determine the extent of cost shifting, investigation of strategies and devices to monitor the extent of the practice, and it could include measures such as an independent survey of doctors on the subject of cost shifting, a GPs cost shift audit through the accreditation process, and perhaps an investigation of pathology and diagnostic imaging requests.

With all the evidence at hand, it is therefore clear that any assertion that the problems with the New South Wales health system are the result of Commonwealth funding cuts would not pass a basic kindergarten maths test. Perhaps Mr Carr and Dr Refshauge should be looking in their own backyard at the infighting between state government instrumentalities for financial assistance grants from the Commonwealth and their own ineptitude at managing an efficient health service. It is time the Carr government simply stopped blaming everyone else for its problems and started getting its own house in order and giving the people of New South Wales the health service they rightly deserve.