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Tuesday, 25 November 1986
Page: 3717

(Question No. 4723)


Mr Hodges asked the Minister for Health, upon notice, on 7 October 1986:

What are the reasons for the difference between the Health Insurance Commission's administration costs for 1984-85 shown in 1986-87 Budget Paper No. 1 as $113.5m and the 11th annual report of the Commission which shows management expenses as $107.643m.


Dr Blewett —The answer to the honourable member's question is as follows:

The figure in Budget Paper No. 1 incorporates the appropriation for administration or management expenses of $110.5 million and capital acquisition of $3 million. Thus the comparison of the $107.643 million should be with the figures of $110.5 million.

The figures shown in Table 3.1 of Budget Paper No. 1 reflect expenditure by the Commonwealth. In the case of items titled ``Medical benefits'' and ``Health Insurance Commission Administration'' the payments by the Commonwealth are made to the Health Insurance Commission which under the terms of its enabling legislation is required to pay Medicare benefits to those entitled to receive them and to meet management costs including the acquisition of capital items. Payments by the Commonwealth in these areas are shown as receipts or income in the Statement of Activity at page 34 of the Commission's Annual Report and, in detail, at note 2 on page 39 of the Report.

The financial statements of Medicare (pages 34-42 of the Report) show how the funds received were utilised and the assets and liabilities at 30 June 1985. It may be said that the $2.857 million difference between the $110.5 million received by the Commission and the $107.643 million shown as management expenses is represented by cash at bank. However, this answer is simplistic as the accounts of the Commission are prepared on a fully accrued basis (as is required by the Guidelines issued by the Department of Finance and recommended in the 199th Report of the Joint Committee of Public Accounts) while the funding is on a cash basis. Direct comparisons are, therefore, not possible.

The difference between Table 3.1 of Budget Paper No. 1 and Note 2 in the Annual Report is shown in the following table:

($'000)

Budget

Paper

No. 1

Note 2

Differ-

ence

Medicare Benefits...

2240.1

2235.5

(4.6)

Management Expenses...

110.5

Capital...

113.5

4.9

1.9

2353.6

2350.9

(2.7)

The $4.6 million paid by the Commonwealth but not shown as a receipt by the Commission reflects the value of benefits paid by the Department of Health for services rendered before the introduction of Medicare and for subsidiaries under Section 129a of the Health Insurance Act for optometrists to visit isolated patients.

The sum of $1.9 million shown as being received by the Commission but not paid by the Commonwealth reflects cash carried forward from 1983-84 and transferred, in 1984-85 to capital acquisition.