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Monday, 20 May 1957


Mr BIRD (Batman) .- I propose to devote my time to discussing the dangerous drift in public hospital finance throughout Australia. I know that some Government supporters say that the financing of hospitals is the responsibility of State governments, but under the present system of uniform taxation the States are the poor relations of the Commonwealth, and hospital finance has undoubtedly become a national problem. It is no earthly use members of the Government throwing up their hands in horror and saying, "Let the State governments get out of the mess themselves". Unfortunately the State governments, financially, are in a terrific mess. For example, the Government of Victoria will have a deficit of about £4,000,000 this year, and I understand that all the other State governments are in a similar position.

The Victorian Hospitals and Charities Commission expects that Victorian public hospitals will have a total deficit of about £3,500,000 this year. Obviously, such a state of affairs cannot be allowed to exist much longer. Our vital public hospitals cannot be left to flounder from crisis to crisis. This struggle for solvency has gone on for many years, and the hospitals are fast reaching a position of real insolvency. It is high time that the National Parliament recognized the situation and attempted to do something for what are, after all, national institutions. Unless a comprehensive programme of financial security for hospitals can be evolved, there must be grave consequences for the health of the community. Every hospital in Victoria - and I say this without equivocation - is leading a handtomouth existence.

At present hospitals are financed by a subsidy from the federal Government on the basis of 8s. per bed, a grant from the State governments, charges to patients, the proceeds of lotteries, and voluntary effort. This hotch-potch system has just about reached the end of its tether. It has failed to do the job, and unless this Government and the respective State governments get together and evolve some businesslike system of finance there must be a catastrophic breaking down of hospital services throughout the Commonwealth. At present, it is impossible for hospital managements to plan to meet the demands of a growing population. Many small institutions in the country areas carry on only through the generosity of tradesmen, who are prepared to allow their accounts to stand over for months.

I would like to cite the experience of a small Victorian country hospital in the electorate of Lalor. I regret that the honorable member for Lalor (Mr. Pollard) will be unable to speak in this debate, but he has asked me to bring before the Parliament the letter that he received from the Kilmore Hospital recently. The hospital is only small, but its financial position is typical. The letter is from the president and manager, and reads -

It is the desire of this committee that I direct your urgent attention to the state of finances of this Institution. For some considerable time our activities have been severely curtailed due to inadequate maintenance grants being available from State governmental sources.

The writers are referring to the Bolte Liberal State Government. The letter further states -

All attempts to secure additional sufficient grants from the State Government have proved unsuccessful. Quite frankly, the hospital services in this State are in serious danger of breaking down as the various bankers refuse to finance additional deficits by means of further overdrafts. The reason given by the State Government for its inability to make adequate financial provision for its hospitals is that insufficient funds are made available from the Federal Government for its needs.

In view of this my Committee considers that the Federal Government should shoulder some of the financial burden of hospitals. Surely it must be recognized that hospitals play a most vital part in the affairs of the nation. At the moment they are being crippled and standards of service are starting to deteriorate, because of the inability of hospitals to pay their creditors or to maintain full staffs. The persons who will suffer will be those in need of medical and hospital attention.


Mr Bowden - That was a circular letter, and was sent to every one.


Mr BIRD - If it is typical of every hospital that merely reinforces my argument, and I assume that I may count on the support of the honorable member for Gippsland (Mr. Bowden) in my appeal to the Government on this matter. If the hospitals do not receive more finance, services must be curtailed. No civilized community should be asked to accept such a state of affairs. The Commonwealth is in a fairly affluent position and must find the money needed, on a big scale. Plainly, a new Federal-State effort is needed in order to achieve some sort of stability.

Some Government supporters query whether the Commonwealth should be asked to do more, but this is one case where a national viewpoint is essential. Greater federal assistance is imperative. After all, the federal Government has a real interest in this matter. Of all immigrants, 42 per cent, go to Victoria and at least 85 per cent, of these go to Melbourne. The federal Government must realize the problem that this places at the door of 'the Victorian hospitals. For example, one in every three mothers at the Royal Women's Hospital is an immigrant. In the Queen Victoria Hospital, the proportion is one in four. The same can be said of other hospitals, though, perhaps, to a lesser degree. The fact remains that much of the trouble experienced by Melbourne hospitals is due to immigration. As the financing of immigration is a federal responsibility, this Government should set aside funds to offset the effect that the immigration policy has had upon the State hospitals.

I understand that the CommonwealthState hospital benefit agreement expires in August. I urge the Government to act most generously in drafting the new agreement. At present, the Government pays a subsidy of 8s. a day for each occupied bed. This figure has remained unchanged since its introduction in 1945, with the exception that, under the national health scheme, persons who are insured receive 4s. a day extra from government funds and a further 6s. a day from the insurance organization. Speaking generally, the Commonwealth is contributing only 8s. a bed a day. When the Commonwealth began paying this 8s., it was costing hospitals only 19s. 6d. a day to maintain a bed. The Commonwealth is still paying only 8s. a day despite the fact that the present cost per hospital bed is £4 12s. a day. Surely, in those circumstances, this Government must realize that it has a case to answer, and that in drawing up a new agreement, it should recognize the huge increases in costs that have taken place over the last ten years. I suggest that at the very least the present payment of 8s. a day should be increased to £1 ls. a day because the cost of maintaining a hospital bed has increased with rising living costs over the last ten years.

I regret that the present agreement has not achieved the purpose its sponsors set out to achieve in 1945 because the Commonwealth's contribution is fixed; it has not risen in proportion to rapidly rising hospital costs. I suggest that the increased contribution of £1 ls. should be made retrospective to last July in order to help hospitals to wipe out their accumulated deficits. I make that suggestion in all sincerity.

I suggest further that in addition to increasing its contribution, the Commonwealth should give very serious consideration to evolving a new national scheme to cover the cost of new buildings as well as maintenance costs. This seems to be a very real problem with hospital authorities. Take the position in Victoria. Only last year, work on additions to two hospitals almost stopped because the State Government did not provide sufficient funds. St. Vincent's Hospital is a splendid institution with a wonderful record of service extending over many years. Much-needed additions are being made and, because of inability to obtain sufficient loan money from the State Government, the hospital committee was forced to seek finance from a private money-lending institution. It borrowed £250,000 in order to carry on with the work, but the great difficulty is that this £250,000 must be repaid out of contributions received from the Hospital and Charities Commission. Honorable members will readily appreciate that this borrowing is merely postponing the evil day. What is the position of the PrestonNorthcote Hospital? I happen to be a member of the Board of Management of that institution and I know the facts. We were extending some years ago, then we were forced to cease work, but we started again last year. The reason for closing down was lack of finance by way of State grant, and we are now on the verge of closing down for the same reason. It is a fine hospital, and its services are badly needed in a rapidly growing area but at the moment, because of lack of finance, only twenty men are engaged on erecting additions and it would seem that, at the present rate of government assistance, the work will take six years to complete. The hospital, when it is completed, will have accommodation for 360 beds and will be in a position to render a vitally-needed service to the northern suburbs of Melbourne. It is idiotic to expect a hospital to be built under those circumstances. Is it not uneconomic? The work is costing far more than it should because of delay. The position is tragic. This hospital which is urgently needed, is three-quarters completed, but work is unable to proceed because of lack of finance. I suggest that the circumstances which are delaying the completion of St. Vincent's Hospital and Preston-Northcote Hospital are unnecessary, inexcusable and unpardonable in a civilized community. We should give more aid to hospital committees who are doing their best to see that money is made available.

In financing the Preston-Northcote hospital, we have almost drained the cash reserves of every citizen in the area, but that has not been sufficient to enable us to carry on with the work because, as all honorable members know, building costs have become inflated over the years. It is totally inexcusable that any State should have inadequate hospital accommodation, but we are certainly experiencing that situation in Victoria to-day.

Another grave defect in our hospital system is the condition of our teaching public hospitals. These institutions are the hub of the State's hospital service. They have facilities for medical research and specialized diagnosis and treatment. I know that in Victoria - and no doubt this applies to the other States - the standard of hospital service for the State depends upon the service given by the teaching public hospitals, because these institutions also train medical undergraduates, graduates, hospital pharmacists, physiotherapists and other personnel who are indispensable to hospital work. In Victoria to-day there are six teaching public hospitals.


Mr Howson - There are eight.


Mr BIRD - I stand corrected by the honorable member for Fawkner, (Mr. Howson) who I know, has some knowledge of this problem. He has been very sympathetic towards and very active on behalf of the hospitals of Victoria, and I know that what I am saying is striking a responsive chord in his ear. We have eight teaching public hospitals in Victoria. The staffs are working under cramped conditions, and the services of all are very strained indeed. According to an estimate, it will cost £30,000,000 to put these hospitals in first-class order. That amount is required for expenditure on capital works. The building programme of these eight teaching public hospitals is either being carried on at a reduced rate or has not been started at all, and this must have a very serious effect upon the training of essential professional personnel for the future, especially in view of the increased population brought about by the Government's immigration policy. There is no earthly chance of the State Government's providing the money for these teaching public hospitals. The Commonwealth Government must recognize its undoubted responsibility to these teaching hospitals by giving them special grants.

The Victorian Hospital and Charities Commission which is doing an excellent job with depleted resources has been given £4,100,000 for this financial year to finance the capital works programmes of all hospitals in the State, in addition to the numerous charitable and welfare institutions. Out of this sum, it is making available only £1,500,000 for metropolitan teaching hospitals. Obviously, this money will go nowhere. The Hospital and Charities Commission is responsible for capital works grants to the teaching hospitals, fourteen base hospitals in Victoria and over 100 district hospitals. Where will £4,100,000 go in that direction? Why, it is a mere drop in the ocean!

It has to be remembered also that the teaching hospitals_ are expensive institutions because of the complicated specialist departments they must have. To give honorable members some idea of the cost involved, I point out that an X-ray department of a modern hospital must have at least six X-ray machines, which cost between £10,000 and £20,000, and a staff of from 30 to 50 technicians. The hospitals are doing all they can. They are conducting public appeals, but there is a limit to what can be collected from the public. Unfortunately, public response to appeals, whilst it has been generous, has not returned very high sums in comparison with the huge increase in building costs. The response has certainly highlighted the generous instincts of the Australian people, but, unfortunately, the results have fallen far short of the desired target.

The Alfred Hospital is a very old institution. It occupies a very honoured position in the history of Victorian hospitals, but, unfortunately, it has only a very small balance in its building fund. This institution is now in need of £8,000,000 for reconstruction work, and it is making an appeal to the public, but there is a limit to what the public can give. Although the hospitals generally have received some hundreds of thousands of pounds as a result of public appeals, it is a fact that if they were to depend solely upon public subscription, they would not be able to build one story, let alone the five or six stories that are required.

St. Vincent's Hospital, which I mentioned earlier, is in a very serious plight. The shut-down of its activities was obviated only because it was able to secure money from outside sources. All it has done is to delay the evil day, because that money must be paid back over the next few years. It is quite patent to all Victorians who have taken any interest in this subject that under the present arrangement it is manifestly impossible for the Victorian Hospital and Charities Commission to provide anything like the sum required to bring Victorian hospitals to the required condition. The Commonwealth should accept some responsibility for this all-important task. A special grant should be made for teaching hospitals because the training of doctors, which is a responsibility of the teaching hospitals, is an important educational benefit for the Commonwealth. The real need of our hospitals to-day is a closely knit State and Federal scheme which will ensure security of finance and adequate hospital facilities for all.

I trust that the Government, when it is renewing the agreement later this year, will give some consideration to the points I have made. They are, first, that the bed allowance of 8s. a day should be increased to at least £1 ls. a day; secondly, that a special capital works grant should be made for the construction of hospitals; and, thirdly, that the Government should give special consideration to the provision of the money required to modernize our allimportant teaching hospitals. If those things are done, this Government will make at least one notable contribution to the hospitals; and if it does so. whilst it is responsible for many grave omissions so far as our humanities are concerned, it has a wonderful chance of making its mark on this era of our political history by recognizing its financial obligation and saying, in effect, " From now onwards, we recognize we have some part to play as far as finance is concerned, and we will not see people in a state of mental uneasiness because they are unable to obtain admission to hospitals. We will not have the spectacle of respectable citizens on hospital boards being almost on the point of collapse because they cannot find adequate money to finance their institutions ". I am glad to see the Treasurer (Sir Arthur Fadden) in the House, and I suggest that he give serious consideration, when preparing the next budget, to increasing considerably the grants for public hospitals. If he does so. I am certain that his action will meet with the approbation of every Australian citizen.







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