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Wednesday, 24 November 2010
Page: 3678


Mr SWAN (Treasurer) (6:39 PM) —I thank all members who contributed to this very important debate on the Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010. It is an important bill. This is a debate about Australia’s future. Australia’s population is ageing and our health costs are going up. The Intergenerational report did shine a light on just how serious the challenges are that we face as a nation. In coming decades, we will have a significantly older population and relatively fewer taxpayers to support that ageing population. If we do not rise to that challenge then the truth is we are just leaving it to our children to solve. Do we expect them to just go without some life-saving treatment when the money is not there? Do we expect them to cut other vital services so they can afford the health system that we all take for granted? I don’t and nor do the government. We do not accept that a do-nothing approach is the way to go. That is why the government are acting on the challenges through this bill. It is a historic bill. It reflects the priority that the government places on health care now and well into the future.

In April this year, COAG, with the exception of Western Australia, reached a historic agreement on health and hospitals reform—the establishment of a National Health and Hospitals Network. This is one of the most significant reforms to Australia’s health and hospital system since the introduction of Medicare. It is one of the largest reforms to service delivery since Federation. The government’s health reforms are all about delivering better value for every health dollar spent. They are necessary so that future generations can enjoy world-class, universally accessible and affordable health care. The one thing the seven states and territories agreed as part of health reform was that a proportion of GST would be dedicated to health in each state. This bill provides the legislative underpinning of that agreement.

Under the National Health and Hospitals Network, the Commonwealth government will become the majority funder of Australia’s public hospitals. The Commonwealth will fund 60 per cent of the efficient price for all public hospital services and 60 per cent of capital, research and training in our public hospitals. We will also take funding and policy responsibility for GP and primary healthcare services and for aged-care services. As well, we are committed to reducing cost shifting and to strengthening the integration between care provided in hospital and in community settings. So we will, over time, move to fund 100 per cent of the efficient price of primary healthcare equivalent outpatient services.

In line with the Gillard government’s strict budgetary approach, this will still see the budget back into surplus in three years. Fiscal responsibility is a key component of these reforms. The investment is fully funded over the forward estimates, wholly consistent with our fiscal strategy, and does not add to the budget deficit. An independent pricing authority will determine how much the Commonwealth will pay for hospital services. The Commonwealth’s share will be based on how much the independent authority says that a particular service should cost—no more and no less. This will ensure that taxpayers receive the best value for their investment in health care and it will also drive efficiency in the delivery of health services.

I would like to make some comments about some of the criticisms that have been made in this House about the bill and in particular some of the criticisms from those opposite. The opposition have been wringing their hands about the GST dedication that has been agreed with seven out of eight states and territories as part of the COAG agreement. What was the coalition’s health policy at the last election? I think I might take the opportunity to remind those opposite of their policy, which states:

… the Coalition would be prepared to consider moving to a higher percentage of hospital funding, including 100 percent of the efficient price, but only if a State Government would voluntarily agree to surrender an appropriate percentage of its GST revenue.

So the coalition’s own election policy states that they would ask the states to surrender a proportion of GST revenue. This reveals that the coalition’s public posturing about GST is what it is—simply another excuse to oppose reform; nothing more than another excuse to wreck reform.

Opposition speakers have also suggested that we should junk our health reform because only seven out of eight states and territories are signed on, but at the COAG in April every state and territory except Western Australia signed up to the government’s health reform package. This included agreeing to the dedication of a portion of GST funds to health, which this legislation allows. The detailed implementation of the COAG agreement will require revisions to the Intergovernmental Agreement on Federal Financial Relations, and these revisions will need to be agreed by all states and territories. The revisions to the IGA can be designed to allow Western Australia to join the health reforms or to remain separate from the health reforms. The bill preserves the existing federal financial relations arrangements for Western Australia until it becomes a signatory to the National Health and Hospitals Network Agreement, and Premier Barnett has indicated that Western Australia will not stand in the way of other states participating in health reform.

I think it is of concern that the Liberal opposition would want to stop Australians benefiting from these reforms when seven out of eight states can see the merit in the new arrangements. Even Premier Barnett has indicated that he will not stand in the way of other states, so the criticism from the opposition is yet another example of their determination to wreck another important reform which is required to deal with the ageing of our population.

We have also heard opposition speakers express surprise that different amounts of GST will be dedicated in different states. I think this does speak volumes about their lack of interest in and knowledge of this reform process. This element of the reform was made clear in the National Health and Hospitals Network Agreement, was made clear in the 2010-11 budget and was made clear in the 2010-11 MYEFO, which I released earlier this month—it is plainly there for all to see. This is part of what seven out of the eight states and territories signed up to in health reform at COAG in April. This included signing up to a dedication of GST, which is what this legislation facilitates. The portion of GST to be dedicated will be a reflection of how much of the GST the state itself spends on health. The proportion is different in different states because different states spend different amounts on health. But in each state the allocations from dedicated GST combined with contributions from the healthcare SPP will provide 60 per cent of hospital funding and fund 100 per cent of GP and primary healthcare services, which are currently provided by the states.

Opposition speakers have noted that ministerial determinations that are made under this bill are not disallowable instruments. However, the bill limits the discretion in making these determinations. New section 21A requires that the minister consider the National Health and Hospitals Network Agreement and the intergovernmental agreement when making determinations, and new section 21B prevents the minister from making determinations inconsistent with the National Health and Hospitals Network Agreement that would result in substantial financial detriment to one or more states unless a proper process was followed. As part of this process, the determination must be tabled and approved by each house of parliament.

We have also heard opposition speakers make the claim that these reforms will somehow make state and territory finances worse off. That is completely absurd. I am not sure whether the opposition has been following the detail, but this is simply untrue. The amounts of GST that are dedicated will all be spent on health. In addition, as part of the reforms, the Commonwealth expects to provide an additional $15.6 billion for health and hospitals out to 2019-20 directly from the Commonwealth budget. This is in addition to the dedicated GST amounts and it is in addition to the previous estimates of Commonwealth health spending. In other words, states will not be worse off in the short term and over the longer term they will be significantly better off under these reforms.

In summing up, this bill underpins historic reforms to Australia’s health system—reforms which will put Australia’s federal financial relations on a more sustainable footing for the future and allow us to better manage expenditure on health for growth. These changes are designed to deliver value for money from our spending on important health services so that future generations can enjoy the affordable and sustainable healthcare system they all deserve.

Can I also pay tribute to the very hard work that has been put in on this bill and all of the arrangements that go with it by the Minister for Health and Ageing. This is indeed a historic reform for Australia which meets the challenges of the future and does it in a financially responsible way.

Question put:

That the words proposed to be omitted (Mr Hockey’s amendment) stand part of the question.