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Tuesday, 6 September 1983
Page: 414


Mr HURFORD (Minister for Housing and Construction and Minister Assisting the Treasurer)(8.50) —I move:

That the Bill be now read a second time.

The purpose of this Bill is to amend the States (Tax Sharing and Health Grants) Act 1981 so that provisions relating to health funding will be consistent with the Medicare arrangements, agreed upon at the 30 June-1 July 1983 Premiers Conference, due to commence on 1 February 1984. Under the Medicare program, additional public hospital funding will be provided to the States and the Northern Teritory to ensure that these Governments are not financially disadvantaged by the introduction of Medicare into their public hospital systems . At the same time, it is proposed that the existing funding arrangements under the States (Tax Sharing and Health Grants) Act will continue separately, at least until its expiry on 30 June 1985.

Health grants have been payable to the States and the Northern Territory under the Act since 1 July 1981. They replaced grants payable under the hospital cost- sharing agreements for States-other than South Australia and Tasmania, whose hospital cost-sharing agreements were to continue to the end of 1984-85-and the Northern Territory, and payments for community health and school dental programs for all States and the Northern Territory. These health funding arrangements, involving grants for general purposes but identifiable as a Commonwealth contribution towards the cost of health programs, were seen by the previous Government as an interim step towards full absorption of health grants into tax sharing grants. While those States no longer receiving hospital cost-sharing payments are not necessarily required under the current legislation to expend their identified health grants on the provision of health services, they accept these grants under certain conditions. In particular the existing legislation requires the States-other than South Australia and Tasmania-and the Northern Territory to provide free access to accommodation and treatment in public hospitals to all eligible pensioners and persons in special need, and their dependants. The legislation also requires these states to furnish certain information concerning the provision of these services.

The Medicare proposals have two implications for the health funding arrangements which I have just outlined. First, South Australia and Tasmania have agreed to participate in the Medicare compensation arrangements on the condition that they terminate their hospital cost-sharing agreements with the Commonwealth on 31 January 1984. Secondly, the Medicare compensation payments are to be provided to the States and the Northern Territory on conditions which include, among other things, that they provide accommodation and treatment in public hospitals without charge to all Australian residents who do not elect to be treated as private patients. The States and the Northern Territory will also be required to make available a range of health statistics to the Commonwealth.

The amendments proposed in this Bill, therefore, provide for South Australia and Tasmania to receive, from 1 February 1984, health grants under this Act in place of grants payable under the hospital cost-sharing agreements. As a result, this aspect of their health funding arrangements with the Commonwealth will be brought more into line with arrangements currently applying in all other States and the Northern Territory. Nevertheless, these changed arrangements largely preserve in 1983-84 and 1984-85 the relative benefit which will have accrued to both these States from the continuation of their hospital cost-sharing agreements with the Commonwealth after 30 June 1981. In 1983-84, South Australia and Tasmania will each receive an addition to their identified health grant after 1 February based on the amount that each would have received had their hospital cost-sharing agreements run for the whole of 1983-84 in the absence of the Medicare arrangements.

In 1984-85, this additional identified health grant payable will be equal to the amount otherwise payable for the whole of 1983-84, escalated in line with the growth in total Commonwealth tax collections in 1983-84 over 1982-83. This is consistent with the treatment of the health grants provided to other States and the Northern Territory under the current arrangements.

The Bill also removes the conditions imposed on the States under the current arrangements in respect of free hospital services and associated data requirements. It is proposed that the conditions which the Government requires to be met by the States in the hospitals area under Medicare will be covered by regulations under the Health Insurance Act as detailed by the Minister for Health (Dr Blewett) in a separate statement.

The provisions contained in this Bill are important elements in the Government' s overall Medicare policy of providing all Australians with ready access to medical and hospital services. I commend this Bill to the House.

Debate (on motion by Mr Howard) adjourned.