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Transcript of interview with Sarah Ferguson: ABC 7.30 Report: 21 May 2014: Budget for Health

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ABC 7.30 Report 21 May 2014

E&OE Transcript

Sarah Ferguson, Presenter: One of the key areas targeted in the Budget was Health. Joining us is Health Minister, Peter Dutton.

Peter Dutton, Welcome to 7.30.

Peter Dutton, Health Minister: Thank you, Sarah.

Sarah Ferguson: We just saw in that story a line from Tony Abbott in his interview today that the Budget had to knock over fences. Is that how you see the state hospital system: a fence?

Peter Dutton: Well, I think when you look at the record funding that we're providing to hospitals in this budget, nine per cent year-on-year growth, an increase of $1.3 billion next year, $1.4 increase the year after, $1.5 billion increase the year after that, it's a significant investment and we want to make sure that states can manage their hospitals effectively and the Commonwealth will increase our spending, not just in hospitals, but across the Health portfolio more and more each year over forward estimates, so it's a big investment.

Sarah Ferguson: Makes it sound like we're living in two completely different universes, I have to say, because in your Budget papers it's clear that you're taking $8.6 billion frame the Health budget. That figure has a minus in front of it. It's a cut.

Peter Dutton: Well if you look at the Budget papers, you'll see an increase year-on-year and what we've done is said that the growth needs to be sustainable ...

Sarah Ferguson: Are you saying that that $8.6 billion cut isn't there?

Peter Dutton: Well there's a nine per cent in increase in the hospital funding in this budget year-on-year out until 2017. And from July of 2017, we say that the growth will be 6.5 per cent. So, we bring the growth from nine per cent back to 6.5 per cent because we think that's more sustainable. And the reality is that when Julia Gillard signed the states up to this agreement, she had to throw an enormous amount of money completely uncosted to get the state premiers to sign up to the agreement. And we've said that we want to increase funding each year, but, reasonably, that we want to do it at a sustainable rate.

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Sarah Ferguson: Well hold on a second because you're talk about that 2017 figure. I'll just start with that, because your policy, the policy which you took to the election was that you would commit to 50 per cent of the growth, the efficient growth n spending in hospitals. You've now broken that promise, haven't you?

Peter Dutton: Well we've said that we want to deliver it at an increased rate each year, but that we want to do it in a sustainable way.

Sarah Ferguson: Just to be absolutely clear: you are no longer staying with that original promise of 50 per cent of efficient growth spending in hospitals - that's gone?

Peter Dutton: We're saying to the states that after increasing Health spending and after increasing hospital spending by nine per cent each year, from 2017 on I want to remove the bureaucratic burden that the Commonwealth places on the state and territories and I want to reduce the burden, the financial burden that that imposes and I want them to run their hospitals bearing in mind that the states own the hospitals, they employ the doctors and nurses and they deliver the services. In the interim, what we've said is if activity within the hospitals, the number of surgeries that take place, increases; we will too increase the amount that we pay to the states. So I think it's a balanced package and it's the best that we can do, bearing in mind that we have an enormous debt and we're now paying a billion dollars per month in interest of borrowed money.

Sarah Ferguson: Alright, let's go back to ...

Peter Dutton: So, sure, we would want to do more, but that's the financial situation that we inherited.

Sarah Ferguson: Alright. Let's look at what you're actually doing right now. Even in your own state of Queensland, I think the cuts are $150 million this year. Tthat gives them less than 50 days to make adjustments to their own budgets. Are you prepared for the services in your Queensland hospitals and hospitals around the country to decline?

Peter Dutton: Well, again, Sarah, that's not correct. If you look at what's in this budget, we provide increased funding year-on-year. In fact in this financial year we put more money into ...

Sarah Ferguson: You're actually foxing our public because as you know well, you have actually taken a cut - you've made a cut in the increased costs in hospital funding. It says it very clearly in the Budget papers that what you've done, the decisions you've taken, will lead to $1.8 million - $1.8 billion rather being taken out of hospitals. That's a cut.

Peter Dutton: Well with respect, Sarah, that's the Labor line. The reality is ...

Sarah Ferguson: No, that's the line in your own Budget papers. I'm quoting it exactly.

Peter Dutton: No, let me make this very important point: the hospital agreement as it operates at the moment in this financial year is the agreement

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brokered by Julia Gillard and signed up to by each of the state premiers. That's the hospital agreement that we operate under today. So if the states don't achieve a certain level of activity, if they don't have population growth in accord with the agreement that was brokered by Prime Minister Gillard, then there is a reduction in funding. So there's nothing that this government has done in this budget that will see those funds reduced. The money that you're talking about comes from two areas. One is as a result of the agreement that Labor brokered, so we preside over that agreement at the moment. And, secondly, there was some money for a national partnership agreement, about $1.6 billion, which started on 1st July in 2011 and is due to expire on 30th June this year. It was a defined amount of money for a defined period. The states knew that it was to finish 30 June of this year. Labor Party went to the last election saying that they wouldn't extend that money. We took the same policy. And if people want to categorise that as a cut, which I think is completely unjust, that's an issue for them, but we provide nine per cent growth in hospital funding year-on-year and from 2017, 6.5 per cent ...

Sarah Ferguson: Alright, you've made that point.

Peter Dutton: I think it's an important point to make.

Sarah Ferguson: I accept that. One of the arguments that the states are making against you at the moment, those people who expected those agreements to be honoured going forward, are that the incentive payments to improve waiting lists for elective surgery and faster moving - moving faster through emergency departments, they've gone. They were part of their budgets and now they're going to have to find that money. Where are they going to find the money?

Peter Dutton: Well part of the problem for some of the states is that they've overstated the amount of activity within the hospital. So in South Australia, for argument's sake, where they're not putting through the patients that they claimed that they would, they're not getting paid for those services. And we're saying: if you see more patients, if you do more hips and more knees, we will pay for that activity. So, this the incentive for the states to see more patients and the Commonwealth, as I say, will meet our funding obligations in terms of that activity. And I think that's a fair arrangement, but we're not going to pay for activity which is not taking place within public hospitals. I think most Australians, most taxpayers would see that as reasonable and that's the basis upon which we've provided the numbers in the Budget.

Sarah Ferguson: Let me ask you a question another way: did you make it clear at any point in the lead up to the election that you were intending to get out of funding public hospitals long-term?

Peter Dutton: No, we made a few commitments before the election. One was that we wanted to increase the funding that we put into hospitals. We honour that in this agreement. We wanted to make sure that we increased the amount that we spent ...

Sarah Ferguson: Well you don't because you're no longer committing to that 50 per cent increase in growth cost, so you're not honouring that commitment.

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Peter Dutton: Well, Sarah, we are. We're increasing by nine per cent each year and we're increasing funding at a smaller rate, but still at 6.5 per cent from 2017 on. So we increase hospital funding every year. The other commitment that we made was that we would pay down Labor's debt, which we've done in part in this budget, and secondly, that, particularly in relation to my portfolio, that we would increase the money that we spend overall within the Health portfolio, and again, we do that, in addition to creating a $20 billion capital guarantee Medical Research Future Fund and I think that's incredibly important in this budget context as well.

Sarah Ferguson: Let me just talk to you very quickly about the Medicare co-payment. Was your intention that people would go to the doctor less?

Peter Dutton: Our intention was to - a couple of things. One was to strengthen Medicare. At the moment, for a population of 23 ...

Sarah Ferguson: We don't have much time. If you'd just answer that question: do you want people to go to the doctor less?

Peter Dutton: I want people that need to go to the doctor to go to the doctor more and for a longer consultation if that's appropriate, but these are issues and decisions for the doctors to make and I want to make sure that we can strengthen Medicare going forward. The Labor Party model of giving everything to everyone for free is not sustainable and I think we strengthen Medicare in this arrangement.

Sarah Ferguson: It's very clear though already that those decisions are not decisions that are going to be made by doctors; they're being made by patients. According to the Rural Doctors Association, already today there are evidence of Indigenous patients who believe the payment already exists cancelling their appointments. Is that what you want?

Peter Dutton: Well I want to make sure that we can put more money into the system. 10 years ago we were spending $8 billion on Medicare; today we're spending $20 billion. I want to make sure that people can still be bulk billed, which is what we provide for in the new arrangement from 1st July next year, we provide a safety net for people otherwise that once they achieve 10 services, they can go back to bulk billing. We provide millions and millions of dollars to Aboriginal health services so that Indigenous patients can be seen. I think we provide a balanced package and I think, frankly, we set Medicare up as a great system for generations to come.

Sarah Ferguson: Peter Dutton, thank you for joining us.

Peter Dutton: My pleasure. Thank you.