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Monday, 6 December 1999
Page: 12808

Ms GAMBARO —My question is addressed to the Minister for Aged Care. Will the minister advise the House what the benefits will be of the government's response to the Productivity Commission's nursing home inquiry into coalescence?

Mrs BRONWYN BISHOP (Aged Care) —I thank the member for Petrie for her question. I had the pleasure this morning of announcing the government's response to the question of coalescence, and that is that we will be injecting new money, $148 million, to remedy what has been a leftover legacy from the Labor Party. If I can explain, very simply, the Labor Party put in place differential based state funding whereby different states received different amounts of funding for nursing home care. In 1997, as part of our reforms, a process of coalescence—to bring everyone to a national rate—was put in place, and that was to occur over seven years. That matter was referred to the Productivity Commission for its comment and it agreed with moving to a national rate but disagreed with the seven-year term.

The question was one of equity, Queensland being the lowest funded state and Victoria being the highest. What we have done by making available new money of $148 million is to ensure that the national rate for Queensland will be achieved by the year 2002, with an increase of $83 million. South Australia will receive in excess of $14 million and, because under the old scheme there was to have been a dip in the subsidy paid to Victoria, $40 million will be pumped into Victoria to ensure that dip does not occur. Similarly for Tasmania, there will be $6.3 million to ensure that that does not occur in that state.

Overall I can say that funding will continue to grow at an average rate of five per cent, which will amount across the board to something like $800 per bed. The fact of the matter is that we are putting together now an equitable package, which means that those states which were penalised under an unfair Labor system will now have equitable funding. The proposal that Victoria should have been penalised has been rectified by putting an additional $40 million into place—what I can call a thoroughly equitable outcome. Can I put on record my thanks to the industry representatives who negotiated with me for the last months, particularly to the churches who are the largest providers in this country, and indeed I would refer honourable members to the press releases put out by Catholic Health Australia and by the Uniting Church.