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Community Affairs Legislation Committee


In Attendance

Senator McLucas, Parliamentary Secretary to the Prime Minister and Parliamentary Secretary for Disabilities and Carers

Department of Health and Ageing

Whole of Portfolio


Ms Jane Halton, Secretary

Ms Rosemary Huxtable, Deputy Secretary

Ms Kerry Flanagan, Deputy Secretary

Professor Chris Baggoley, Chief Medical Officer

Mr David Learmonth, Deputy Secretary

Mr Chris Reid, General Counsel

Ms Rosemary Bryant, Chief Nurse and Midwifery Officer

Mr David Butt, Deputy Secretary

Mr Paul Madden, Chief Information and Knowledge Officer

Mr Andrew Stuart, Deputy Secretary, DoHA National Alignment

ICT and Corporate Support Division

Ms Bettina Konti, First Assistant Secretary

Ms Kerrie Reyn, Acting First Assistant Secretary

Ms Katrina Burggraaff, Acting Assistant Secretary, Corporate Support Branch

Mr Gary Aisbitt, Assistant Secretary, IT Support and Service Delivery Branch

Mr David Paull, Acting Assistant Secretary, IT Solutions Development Branch

Chief Financial Officer

Mr John Barbeler, Chief Financial Officer

DoHa National Alignment

Mr Andrew Stuart, Deputy Secretary

Ms Cathy Haffner, Acting Assistant Secretary, Change Management Unit

Legal and General Council

Mr Chris Reid, General Counsel

Ms Marlene Hall, Special Counsel Aged Care Law

Office of the Chief Information and Knowledge Officer

Mr John Roe, Executive

People, Capability and Communication Division

Mr Adam Davey, Acting First Assistant Secretary

Ms Melinda Bromley, Assistant Secretary, Capability Branch

Ms Julie Schneller, Assistant Secretary, Health Campaigns Branch

Ms Jodie Grieve, Acting Assistant Secretary, Online, Services and External Relations Branch

Ms Cathy Sloan, Acting Assistant Secretary, People Branch

Portfolio Strategies Division

Ms Kylie Jonasson, First Assistant Secretary

Dr Phuong Pham, Assistant Secretary, Budget Branch

Mr David Dennis, Assistant Secretary, Economic and Statistical Analysis Branch

Mr Simon Cotterell, Assistant Secretary, International Strategies Branch

Mr Rob Cameron, Assistant Secretary, Policy Strategies Branch

Ms Carolyn Driessen, Assistant Secretary, Ministerial and Parliamentary Support Branch

Independent Hospital Pricing Authority

Mr Tony Sherbon, Acting Chief Executive Officer

Outcome 1

Population Health Division

Mr Nathan Smyth, First Assistant Secretary

Ms Alice Creelman, Assistant Secretary, Cancer and Palliative Care Branch

Ms Colleen Krestensen, Assistant Secretary, Drug Strategy Branch

Ms Janet Quigley, Assistant Secretary, Healthy Living and Chronic Disease Branch

Ms Sally Goodspeed, Assistant Secretary, Health in Social Policy Branch

Ms Sharon Appleyard, Assistant Secretary, Tobacco Control Taskforce

Dr Bernie Towler, Principal Medical Adviser

Mental Health and Drug Treatment Division

Ms Sue Campion, First Assistant Secretary

Mr David Mackay, Assistant Secretary, Mental Health Early Intervention Branch

Mr John Shevlin, Assistant Secretary, Substance Misuse and Indigenous Wellbeing Programs Branch

Office of Health Protection

Ms Karen Hall, Acting Assistant Secretary, Health Protection and Programs Branch

Regulation Policy and Governance Division

Ms Mary McDonald, First Assistant Secretary

Ms Jennifer Chadwick, Principal Adviser

Ms Kathy Dennis, Assistant Secretary, Research, Regulation and Food Branch

Ms Teressa Ward, Assistant Secretary, Australian and New Zealand Therapeutic Products Agency

People, Capability and Communication Division

Mr Adam Davey, Acting First Assistant Secretary

Ms Julie Schneller, Assistant Secretary, Health Campaigns Branch

Mental Health and Drug Treatment Division

Ms Sue Campion, First Assistant Secretary

T herapeutic Goods Administration

Dr John Skerritt, National Manager

Dr Larry Kelly, Acting Chief Regulatory Officer

Ms Jill Jepson, Chief Operating Officer

Dr Anthony Gill, Acting Principal Medical Adviser

Ms Judy Develin, Market Authorisation Group

Ms Margaret Lyons, Australian and New Zealand Therapeutic Products Agency

Ms Nicole McLay, Chief Financial Officer

National Blood Authority

Mr Leigh McJames, General Manager and Chief Executive Officer

Cancer Australia

Dr Helen Zorbas, Chief Executive Officer

National Industrial Chemicals Notificatio n and Assessment Scheme

Dr Brian Richards, Director

Food Standards Australia an d New Zealand

Mr Steve McCutcheon, Chief Executive Officer

Ms Melanie Fisher, General Manager

Dr Paul Brent, Chief Scientist

Dr Marion Healy, Executive Manager, Risk Assessment

Mr Peter May, General Manager, Legal and Regulatory Affairs

Australian Instit ute of Health and Welfare

Mr David Kalisch, Director

Mr Andrew Tharle, Acting Group Head, Business

National Health and Medical Research Council

Professor Warwick Anderson, Chief Executive Officer

Professor John McCallum, Head, Research Translation Group

Mr Tony Kingdon, Head, Planning and Operations Group

Office of Gene Technology Regulator

Dr Joe Smith, Regulator

Dr Michael Dornbusch, Assistant Secretary, Evaluation Branch

Dr Robyn Cleland, Assistant Secretary, Regulatory Practice and Compliance Branch

Australian Radiation Protection an d Nuclear Safety Agency

Dr Carl-Magnus Larsson, Chief Executive Officer

Mr Martin Dwyer, Operations Services

Dr Stephen Solomon, Radiation Health Services

Mr George Savvides, Chief Financial Officer, Corporate Office

Australian National Preventive Health Agency

Ms Louise Sylvan, Chief Executive Officer

Dr Lisa Studdert, Manager, Policy and Programs

Mr John Kalokerinos, Manager, Operations and Knowledge

Australian Commission on Safety and Quality in Health Care

Dr Michael Smith, Clinical Director

Outcome 2

Pharmaceutical Benefits Division

Ms Felicity McNeill, First Assistant Secretary

Ms Adriana Platona, Assistant Secretary, Pharmaceutical Evaluation Branch

Mr Kim Bessell, Assistant Secretary, Pharmaceutical Access Branch

Mr Stephen Waldegrave, Acting Assistant Secretary, Pharmaceutical Policy Branch

Outcome 3

Medical Benefits Division

Dr Richard Bartlett, First Assistant Secretary

Ms Fifine Cahill, Assistant Secretary, Primary Care, Diagnostics and Radiation Oncology Branch

Mr Shane Porter, Assistant Secretary, Medicare Financing and Listing Branch

Dr Megan Keaney, Acting Assistant Secretary, Medical Specialist Services Branch

Acute Care Division

Ms Janet Anderson, First Assistant Secretary

Mr Charles Maskell-Knight, Principal Adviser

Pr ofessional Services Review

Dr Antonio Di Dio, Director

Ms Patricia O'Farrell, Executive Officer

Outcome 4

Ageing and Aged Care Division

Ms Carolyn Smith, First Assistant Secretary

Mr Nigel Murray, Assistant Secretary, Finance and Funding Branch

Mr Keith Tracey-Patte, Assistant Secretary, Policy and Evaluation Branch

Ms Shona McQueen, Assistant Secretary, Home and Community Care Branch

Mr Russell de Burgh, Assistant Secretary, Ageing and Workforce Programs Branch

Mr Craig Harris, Assistant Secretary, Access Reform Branch

Mr Ben Vincent, Assistant Secretary, Aged Care Programs Branch

Ms Rachel Balmanno, Assistant Secretary, Transition Branch

Office of Aged Care Quality and Compliance

Mr Iain Scott, First Assistant Secretary

Mr Michael Culhane, Assistant Secretary, Aged Care Complaints Branch

Ms Lyn Murphy, Assistant Secretary, Quality and Monitoring Branch

Mr Leo Kennedy, Assistant Secretary, Grants, information, Finance and Technology Branch

Mr Damian Coburn, Assistant Secretary, Prudential and Approved Provider Regulation Branch

Aged Care Standards and Accreditation Agency Ltd

Mr Mark Brandon, Chief Executive Officer

Mrs Elizabeth Pringle, General Manager, Operations

Mr Chris Falvey, General Manager, Corporate Affairs and Human Resources

Mr Ross Bushrod, General Manager, Accreditation

Mrs Victoria Crawford, General Manager

Outcome 5

Primary and Ambulatory Care Division

Mr Mark Booth, First Assistant Secretary

Ms Kirsty Faichney, Assistant Secretary, Rural and Regional Health Australia

Mr Chris Carlile, Assistant Secretary, Policy Performance and Quality Branch

Ms Erica Kneipp, Assistant Secretary Medicare Local Branch

Ms Meredeth Taylor, National Manager, Rural and Regional Health Australia

People, Capability and Communication Division

Mr Adam Davey, Acting First Assistant Secretary

Ms Julie Schneller, Assistant Secretary, Health Campaigns Branch

Mental Health and Drug Treatment Division

Ms Sue Campion, First Assistant Secretary

General Practic e, Education and Training

Mr Erich Janssen, Chief Executive Officer

Mr David Glasson, Chief Operating Officer

Outcome 6

Primary and Ambulatory Care Division

Mr Mark Booth, First Assistant Secretary

Ms Kirsty Faichney, Assistant Secretary, Rural and Regional Health Australia

Ms Meredeth Taylor, National Manager, Rural and Regional Health Australia

Outcome 7

Regulation Policy and Governance Division

Ms Mary McDonald, First Assistant Secretary

Ms Jennifer Chadwick, Principal Adviser

Ms Tracey Duffy, Assistant Secretary, Office of Hearing Services

Outcome 9

Acute Care Division

Ms Janet Anderson, First Assistant Secretary

Mr Gareth Sebar, Assistant Secretary, Financing and Analysis Branch

Medical Benefits Division

Dr Richard Bartlett, First Assistant Secretary

Mr Doug Fawns, Assistant Secretary, Private Health Insurance Branch

Private Health Insuranc e Administration Council

Mr Shaun Gath, Chief Executive Officer

Mr Paul Groenewegen, General Manager, Prudential Supervision

Ms Annemaree Gray, Acting General Manager, Industry Operations

Mr Josh Edwards, Special Advisor, Prudential Standards and Transactions

Private H ealth Insurance Ombudsman

Ms Samantha Gavel, Ombudsman

Outcome 10

Regulation Policy and Governance Division

Ms Mary McDonald, First Assistant Secretary

Ms Jennifer Chadwick, Principal Adviser

Ms Beryl Janz, Assistant Secretary, Governance, Safety and Quality Branch

Population Health Division

Mr Nathan Smyth, First Assistant Secretary

Ms Alice Creelman, Assistant Secretary, Cancer and Palliative Care Branch

eHealth Division

Ms Linda Powell, First Assistant Secretary

Mr Peter Morris, Principal Advisor

Ms Liz Forman, Assistant Secretary, eHealth Strategy and Legislation Branch

Mrs Sharon McCarter, Assistant Secretary, eHealth Systems and Implementation Branch

Mr Matthew Corkhill, Assistant Secretary, eHealth Operations Branch

Acute Care Division

Ms Janet Anderson, First Assistant Secretary

Ms Ann Smith, Assistant Secretary, Hospital Development Branch

Primary and Ambulatory Care Division

Mr Mark Booth, First Assistant Secretary

Outcome 11

Mental Health and Drug Treatment Division

Ms Sue Campion, First Assistant Secretary

Ms Fiona Nicholls, Assistant Secretary, Mental Health Services Branch

Mr David Mackay, Assistant Secretary, Mental Health Early Intervention Branch

Mr Brenton Alexander, Acting Assistant Secretary, Mental Health System Improvement Branch

Outcome 12

Health Workforce Division

Ms Penny Shakespeare, A/First Assistant Secretary

Ms Gay Santiago, Assistant Secretary, Health Workforce Capacity Branch

Mr Lou Andreatta, Assistant Secretary, Health Workforce Training and Distribution Branch

Ms Kate McCauley, Assistant Secretary, Health Workforce Policy and Data Branch

Health Workforce Australia

Mr Mark Cormack, Chief Executive Officer

Mr Roberto Bria, Executive Director

Outcome 13

Acute Care Division

Ms Janet Anderson, First Assistant Secretary

Mr Charles Maskell-Knight, Principal Advisor

Ms Ann Smith, Assistant Secretary, Hospital Development Branch

Ms Gillian Shaw, Assistant Secretary, National Partnership Agreements Branch

Mr Peter Broadhead, Assistant Secretary, EDW Implementation Branch

Mr Gareth Sebar, Assistant Secretary, Financing and Analysis Branch

Dr Stephen Bygrave, Assistant Secretary, Hospital Performance and Governance Branch

Ms Alison McAuslan, Director, National Partnership Agreements Branch

Medical Benefits Division

Dr Richard Bartlett, First Assistant Secretary

Mr Shane Porter, Assistant Secretary, Medicare Financing and Listing Branch

Regulation Policy and Governance Division

Ms Mary McDonald, First Assistant Secretary

Ms Jennifer Chadwick, Principal Adviser

Mr Peter Woodley, Assistant Secretary, Blood Organs and Regulatory Policy Branch

Australian Organ and Tissue Donation a nd Transplant Authority

Ms Yael Cass, Chief Executive Officer

Associate Professor Jonathan Gillis, National Medical Director

Ms Elizabeth Flynn, General Manager

Ms Judy Harrison, Chief Financial Officer

National Health Performance Authority

Dr Diane Watson, Chief Executive Officer

Dr David Martin, Acting Executive Director, Hospitals Reporting Branch

Ms Tricia Lineham, Acting Executive Director, Healthy Communities Reporting Branch

Mr Graeme Holt, Chief Operating Officer, Corporate and Financial Services

Outcome 14

Office of Health Protection

Ms Megan Morris, First Assistant Secretary

Ms Maria Jolly, Assistant Secretary, Health Protection and Surveillance Branch

Mr Graeme Barden, Assistant Secretary, Office of Chemical Safety

Dr Jenny Firman, Medical Officer

Dr Gary Lum, Assistant Secretary, Health Emergency Management Branch

Committee met at 09:00

CHAIR ( Senator Moore ): I declare open this hearing of the Senate Community Affairs Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for 2012-13, and the related documents, for the Health and Ageing portfolio. The committee may also examine the annual reports of the departments and agencies appearing before it.

The hearing today is supplementary to the budget estimates hearings held in May. The committee has before it a program listing agencies and outcomes relating to matters upon which senators have given notice. The committee has set Friday, 7 December 2012, as the date for the return of answers to questions on notice. Senators are reminded that any written questions on notice should be provided to the committee secretariat by close of business Friday, 26 October 2012.

Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need any assistance the secretariat has copies of rules. I need to particularly draw attention to the Senate order of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised, and which I now incorporate in Hansard.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a)      notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b)      reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c)      orders that the following operate as an order of continuing effect:

(1)      If:

      (a)   a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

      (b)   an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2)      If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3)      If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4)      A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5)      If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6)      A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7)      A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).

(8)      If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(Extract, Senate Standing Orders, pp 124-125)

Would you like to make an opening statement, Senator McLucas?

Senator McLucas: No, thank you Chair.

CHAIR: Would you like to make an opening statement, Ms Halton?

Ms Halton : No, thank you Chair.

CHAIR: We will start with whole-of-portfolio corporate matters.

Senator FIERRAVANTI-WELLS: For the record, I forwarded correspondence through the secretariat, on 12 October and also on 16 October, outlining the sort of information I would be seeking at these estimates. It is mostly financial and in effect goes through the portfolio budget statements to see where there are any variations in things like that. To make it easier I will be asking questions today. I appreciate that not all the information I will be asking for will be available today, and particularly the more detailed information about programs and subprograms, which will be taken on notice. To facilitate matters I might produce one of my tables.

Ms Halton : Your famous templates!

Senator FIERRAVANTI-WELLS: It will make it easier for your staff to insert the information we require. So it is a bit of a double exercise.

CHAIR: Do we have that, Senator?

Senator FIERRAVANTI-WELLS: No, we do not. But what I will do—and hopefully I will do it by the 26th, but I have indicated to Ms Halton that it may not get there until the 26th, but it will be in a relatively short period of time—is make the table available, and then Ms Halton's staff can populate it appropriately. I think that is probably the easiest way to go.

Ms Halton : In terms of the correspondence that was sent through via the secretariat, I think it indicated your interest in receiving information at the subprogram level down and across the forward estimates.


Ms Halton : The only thing is we may or may not have actual disaggregations by subprogram across all of the forward estimates, depending on the program and how the appropriation is made. But in any answer we give you we will indicate where that is the case.

CHAIR: Before proceeding, I acknowledge Professor Baggoley, who is also at the table.

Senator FIERRAVANTI-WELLS: Starting with a general question on whole-of-portfolio. In regard to the actuals and actual expense for the 2010-11 financial year, are they the sort of figures that will be available today—that was the sort of stuff I asked for—or will that be the sort of stuff that will be taken on notice?

Ms Halton : It depends on the program.

Senator FIERRAVANTI-WELLS: Starting with whole-of-portfolio, what is the actual expense for the 2010-11 financial year, including the breakdown of administered and departmental expenses?

Ms Halton : 2010-11 actuals for whole of portfolio?


Ms Halton : To be fair we actually only got this yesterday.

Senator FIERRAVANTI-WELLS: Okay. In fairness I must also say that because the annual report was published only a few days ago I just have not had the opportunity to go through it in this much detail.

Ms Halton : That is fine.

Senator FIERRAVANTI-WELLS: If it is in a document, Mr Barbeler, just give me the reference so that it is actually on the record. I can then go through it afterwards. It is just to get things on the record.

Ms Halton : We can point you where things are.

Mr Barbeler : Are you wishing to make comments on 2010-11?

Senator FIERRAVANTI-WELLS: Yes, for whole of portfolio.

Mr Barbeler : The financial statements that are prepared and provided here relate both to the departmental and the administered.

Senator FIERRAVANTI-WELLS: Yes. And what page is that at.

Mr Stuart : What we have here in the annual report relates to the Department of Health and Ageing and not to the whole of portfolio.


Mr Stuart : It may be that we do not have that data ready to hand, because all of the portfolio agencies produce their own annual reports.

Senator FIERRAVANTI-WELLS: All right. In that case perhaps if you could take whole of portfolio on notice, and then the departmental DoHA is at page—

Mr Barbeler : It starts on page 362.

Senator FIERRAVANTI-WELLS: I will go through that, and you will take the whole of portfolio on notice?

Mr Barbeler : We will provide that information.

Senator FIERRAVANTI-WELLS: Could you then do 2011-12 for the whole of portfolio, and, separately for the department, the actual breakdown?

Mr Barbeler : We will have to get the information from the portfolio, so that might take some time—for 2011-12.

Senator FIERRAVANTI-WELLS: That is fine. Thank you. And 2011-12 is in the document—

Mr Barbeler : 2011-12 is on the same page number I gave you.

Senator FIERRAVANTI-WELLS: Thank you. In relation to the pages 26 through to 29 of the portfolio budget statement, the total resourcing for the department is $5.1 billion. In relation to 2012-13, these are estimates. How are we tracking in relation to that figure?

Mr Stuart : In relation to the 2012-13 budget for departmental costs, the department is tracking absolutely lineball on the estimates at the moment. There is no fat in the departmental budget this year.

Mr Barbeler : The year to date is in line with our budget.

Senator FIERRAVANTI-WELLS: Ms Halton's cookie jar has been depleted!

Ms Halton : Totally! As I keep saying to the people behind me here: if there were a magic pudding under my desk—but there is not.

Senator FIERRAVANTI-WELLS: Are there any changes to the statement from when the portfolio budget papers were published? If there are, are they minor?

Mr Stuart : There has been a recent announcement by Senator Wong that we need to factor in. But we do not have a final figure for that yet. Nevertheless we expect just to be able to accommodate that figure within this year's budget. Although, of course, we will need to stretch to accommodate that.

Ms Halton : I would remind you that, if you want to look at those statements, you mentioned the figure $5 billion. It is actually $50 billion. If you go to page 29 and look at the bottom right-hand number. That is actually the number. You need to remember that the way these appropriations work, particularly in terms of the complexities of our dealing with hospital funding, there is the odd little trick in the way these work. But it is the figure on the bottom corner of page 29 that is probably the one to focus on.

Senator FIERRAVANTI-WELLS: So it is $50 billion. And in that you will now have to build in the efficiency dividend?

Mr Stuart : That is on the departmental side.

Ms Halton : That is on the departmental side.

Senator FIERRAVANTI-WELLS: And just remind me of the percentage.

Ms Halton : It was not actually—

Mr Stuart : There is not a percentage.

Ms Halton : It is a dollar figure.

Senator FIERRAVANTI-WELLS: I have some questions in relation to, most specifically, Budget Paper No. 1, which indicates that funding for health will fall between 2011-12 and 2012-13, and we have addressed revisions—I am sorry, page 621—

Ms Halton : Which budget paper?

Senator FIERRAVANTI-WELLS: I am looking at budget statement No. 6—expenses and net capital investment. Would it be better if I put this one on notice?

Ms Halton : Probably.

Senator FIERRAVANTI-WELLS: There are some quite complicated questions about percentages, and reductions in relation to that, so I think I might—

Ms Halton : If the point is about expenditure year on year and what the explanation is—

Senator FIERRAVANTI-WELLS: I am really looking at whether there will be a surplus in your budget—

Ms Halton : The answer is no—

Senator FIERRAVANTI-WELLS: But judging from what Mr Stuart has said, it will be no. Without going into the nitty gritty of it, if previously there was some potential surplus, gathering from what Mr Stuart has said it has now been eaten up and you will be close to the mark.

Ms Halton : Let us be clear. One, there has never been any potential surplus. Secondly, in terms of expenditure year on year there was a profile issue, which some people I think sometimes do not quite understand, that goes to the hospital investments.

There were some front-loaded hospital investments in a number of areas, under the agreement struck with the states in relation to health reform. If you look at the aggregate profile—one year on the other—that is what explains some of those differences. It is on a program-by-program basis.

Senator FIERRAVANTI-WELLS: All right—in the intricacies and the various references—I will put that one up.

Ms Halton : We are not expecting any under-expenditure.

Senator FIERRAVANTI-WELLS: I will put that one on notice.

Senator SIEWERT: I have some more detailed questions around red-tape reduction, some of which I will put on notice, because I presume you will not be able to answer some of the detail off the top of your head.

Ms Halton : Oh, I don't know! Give us a try.

Senator SIEWERT: Things like the number of funding agreements you have with the not-for-profit sector, for example. I am presuming you cannot answer that.

Mr Stuart : No, we cannot answer that off the tops of our heads, and we would actually struggle to do it, otherwise—because we would then need to be very clear about the definition of the non-for-profit sector, which is not an indicative we currently have in our grant systems.

Senator SIEWERT: I would have thought you could put your finger on it fairly easily, given that you will be writing to each of them around the community equity, pay equity, case.

Mr Stuart : We are looking for other departments to lead, with the non-for-profit sector, in understanding a very clear definition of that sector. It is work that is ongoing.

Senator SIEWERT: Maybe I will ask you on notice: how many organisations will you be writing to with an offer, under the pay equity case?

Ms Halton : The answer will be: we cannot answer that question yet.

Senator SIEWERT: When will you be able to answer it?

Ms Halton : That is a fair question, but I do not know the answer to it. Essentially, as Mr Stuart said, we are working on this at the moment. Because we do not record the information in a way that enables us to pluck out that subgroup, there will have to be a program-by-program examination. We just do not know how long that will take us.

Senator SIEWERT: That leads into my next question: when will you be making an offer? I understand that each organisation will be getting one letter from each agency. We established that last time. As I understand it, from when I mentioned it at Prime Minister and Cabinet yesterday and the day before, that is still the expectation—that each agency will be sending one letter to each of the organisations they work with.

Ms Huxtable : This is in regard to the SACS case. There are two elements to the work that we are doing. One relates to the back-pay issue regarding Queensland and the other relates to the broader piece of work. In terms of the work that we will be doing in writing out to organisations, we estimate that there are 1,000 Commonwealth HACC program funded service providers and 516 NRCP providers that may be affected and up to 550 mental-health provider funding agreements that may require amendment. We are going through the process of writing out to those organisations.

Senator SIEWERT: Are you doing that now?

Ms Huxtable : It is imminent. In respect of the back-pay arrangements, we expect that services will be contacted by the end of this week.

Senator SIEWERT: That is the Queensland—

Ms Huxtable : Yes, the Queensland issue. The legislation was introduced in the last week or so. We have just been waiting for that to be finalised, to enable those letters to go. So those letters will be going quite soon.

Senator SIEWERT: Is it still the case that an organisation will get only one letter from your agency if it gets more than one grant? And I am fairly confident that some of them will have more than one.

Ms Huxtable : We have the HACC and the National Respite for Carers Program, running through aged care and the mental health care providers. They are probably reasonably discrete, in that regard, between aged care and mental health. I would probably have to take on notice the degree to which we are able to streamline the aged care arrangement. Certainly with HACC, because we have gone through a very detailed reconciliation process as part of that program transferring to the Commonwealth, we have very sound data, and we already have a portal that enables us to very easily communicate with HACC service providers. So I think the HACC side of the equation is more straightforward than it would have been, say, 12 months ago. There will clearly be some overlap between the NRCP providers and the HACC providers. When we come back on aged care we can probably give you a bit more information on how we are planning to make sure that that is as streamlined as possible.

Senator SIEWERT: Thank you. That would be appreciated. In terms of the relationship with the states, I understand that there is a process of interaction with the various agencies or groups themselves, and then there is interaction with the state government in relation to any national agreements. What is the level of your department's involvement in those negotiations with the states and territories? Or is it purely Treasury doing those negotiations?

Ms Huxtable : Treasury is certainly leading on those negotiations. We do have phone hook-ups, and we work together with other agencies that are impacted, quite regularly. I think we had the last teleconference only a few days ago. But Treasury is certainly taking the lead in the work with the states.

Senator SIEWERT: I am going to asking them about that tomorrow, so I will follow that up then. Thank you.

Senator FIERRAVANTI-WELLS: I have a question on something I have touched on in the past. As part of this takeover, will you also be doing some sort of quality assessment of some of those providers that you are taking over?

Ms Huxtable : Do you mean for the HACC program?

Senator FIERRAVANTI-WELLS: Yes, or some of the programs that were previously run under state auspices and that are now run under Commonwealth auspices. Will you be looking at some of those aspects of it? You might recall that I raised it particularly in relation to the Tweed area and the Tweed COPS program. That was just one example that I used. Is that part of that process?

Ms Huxtable : We have taken over the management of the whole program, so we are now in direct contract with individual service providers, and with that comes all the administration, quality assurance et cetera.

Senator FIERRAVANTI-WELLS: So there is a possibility that those that perhaps may not have had as much scrutiny under various state organisations may now get a bit more scrutiny under the Commonwealth.

Ms Huxtable : We would probably be better off talking about this under outcome 4. I would note also that of course in Victoria and WA those arrangements do not apply.

Senator SIEWERT: What is the dollar amount that your department expects to be contributing?

Ms Huxtable : Could we do that in outcome 4? That is where the bulk of this is—in aged care.

Senator SIEWERT: Okay, but will you be able to cover all the agency requirements there? I would rather deal with it as a quantum. If we can deal with it all there, across the agency, that is fine.

Ms Huxtable : Yes, I think that would be fine.

Senator SIEWERT: Once you have issued the letters to organisations, are they able to appeal that?

Ms Huxtable : There is certainly a process of engagement with those agencies, so the letters go out and then there is an opportunity for them to have an engagement with us about that.

Senator SIEWERT: And they will then be engaging with you directly rather than with Treasury?

Ms Huxtable : Yes.

Senator SIEWERT: So they will engage with each agency that they are funded by if they do not agree with their particular assessment?

Ms Huxtable : That is right, because it goes to an assessment of the SACS component of their workforce, et cetera. So we are able to make some assessment of that. They may then have a different view, and we would need to work through that.

Senator SIEWERT: Queensland is different because of the back pay issue. In particular, you have Western Australia and Victoria where, firstly, Western Australia has not handed over its IR powers and, secondly, you have the difference in the HACC services. What impact does that have?

Ms Huxtable : That would be part of the negotiations with the state in terms of what is in the contribution in those specific states. We would not be working directly with the HACC service providers in those states, but Treasury would be negotiating with the state governments in that regard.

Senator SIEWERT: This is where I want to tease things out. You may have to take some of my questions on notice. In that case, with the letters that are going out to Western Australian and Victorian organisations in terms of the HACC services, are they getting a letter from you around that or are they relating to the state? This, as you would appreciate, it is a threshold issue for some of the organisations in my home state and in Victoria.

Ms Huxtable : Sorry, I do not know the answer to that. However, at outcome 4 I am sure my colleagues who are here for outcome 4 will know the answer to that. If we could address that one in outcome 4 they are the ones who are responsible for the HACC arrangements.

Senator SIEWERT: So I am clear about what we can ask them, what is the relationship with the HACC services? How is that going to operate? Who are those agencies getting a letter from? Is it Treasury or the state government? How is that process being worked out? What is DoHA doing then over the mental health grants because that is a separate issue as well, and the quantum? There would be appreciated, thank you.

Can I quickly go onto the red-tape reduction. I had a substantive discussion yesterday and Monday with finance and the not-for-profit office. We were talking about the process of grant applications and the development of the template. What is the time frame for DoHA to be moving onto that more common approach with the templates that they are trying at the moment? What is the timeframe for you to be moving to that process?

Mr Stuart : We are doing a lot in this space. The template that is being worked on, coordinated by the department of finance, is for low-risk grants. We expect to start using that where applicable when it is ready for use. Separately the department is almost complete with its own whole-of-department cross program grant template for more complex grants. We have had a consultation process with the sector on that which is nearly complete.

Ms Halton : Which they have been very supportive of.

Senator SIEWERT: Yes, I know they are very keen to do this.

Mr Stuart : That is right. So, we are on the threshold of using that new grant template as soon as it is ready, within the next few weeks.

Senator SIEWERT: On threshold, different agencies have different levels of what that means.

Mr Stuart : This is exceedingly imminent.

Ms Halton : Verging on the edge of the precipice, Senator. Let us be really clear, they are keen to do it and so are we. There is a real efficiency dividend for us, and everyone knows that resources are extremely tight. What we are trying to do is basically have one business model for the whole portfolio. We have tried to do that in negotiation with the sector so it works for the sector as well as for us.

Senator SIEWERT: We had a substantive discussion yesterday—well, as substantive as you can in about 10 minutes. It was more than we have had in some other areas—about what 'low risk' means and what are the criteria for low risk. Are you using those same indicators that finance are for low risk? There is a sort of matrix. We were talking about a matrix.

Mr Stuart : Finance is still working on that. We are also thinking about risk in parallel. We are going to engage further with the sector about risk as well. One of the things that I have feeding into the department's thinking about risk is some work that has actually been done by the Not-For-Profit Sector Reform Council. We also have models from other departments, including FaHCSIA, and we have the piece of work that is being done by finance. At some point all of that will come to a single approach.

Senator SIEWERT: Okay, so there will be a common understanding of what is meant by 'low risk' and 'high risk'. Yesterday we were talking about it not just being about financial risk; there are risks in relation to being able to achieve outcomes and things.

Mr Stuart : That's right.

Senator SIEWERT: So there will be a common understanding across all agencies about what that is?

Mr Stuart : That is probably a little bit further away.

Ms Halton : Yes, I think that is probably quite hard, Senator. Partly, it is because of the context in which each of the portfolio works. I think there is some common space between us, DEEWR and FaHCSIA, just because of the nature of our business. Finance have a theoretical understanding of what we do, but they do not run any programs; whereas we run programs—and, let's be honest, we are the ones who get to sit here in front of you and, if someone has made a mess of it, you guys are going to be the first ones to sniff it out and haul us over the coals; which is the right thing. So we have to find a way which, in the programmatic context we are working, we have an approach to risk which is reasonable. I think we can share common definitions in some places with those other portfolios, but we have quite a bit of work to do on that.

Senator SIEWERT: Okay. I appreciate that some agencies will put different emphases on different areas if there is a matrix worked out about risk, but will that matrix be common?

Mr Stuart : The Department of Finance and Deregulation is still working through, and they are still consulting. They are still working with us and with the sector, so I do not think there is a final answer to that yet. There was a discussion I attended, as the kind of champion, if you will, for our department, on the compact, with the Not-For-Profit Sector Reform Council. There was a discussion between the council and the department of finance where it was clear there was room for further discussion. We would like to have as common a view as possible, but there are also issues in health that have a very specific context. We have groups of people in care on a daily basis who are vulnerable, and I do not think that is low risk—just to pluck an example.

Senator SIEWERT: I appreciate that. So they would not be in that low-risk criterion; they would be in the higher risk area.

Mr Stuart : That is right. And we would be using our own grant agreement for those kinds of people.

Ms Halton : I guess that is the point, Senator. Ultimately, under all the various frameworks we operate, I am the one who has to sign-off the financial statements to say that I think we have spent the money appropriately; and ultimately I am the one who sits here and has to say yes, we have done everything we can appropriately. So I am very keen for us to have as common an approach as we can across the service, wherever we can, but I also have to take account of the fact that some of the programs that my officers administer are not the same as some of the programs in other portfolios.

I would actually argue we are probably at the cutting edge of this work, to be honest, because we started down a whole-of-portfolio track before anybody else did—so we are very committed to it. But I do not want to sit here and mislead you and say, 'Oh yes'—and then some sort of standard approach promulgated by Finance I am just going to have to swallow. I am going to have to satisfy myself that it enables us to satisfy our obligations.

Senator SIEWERT: It sounds like there is much more progress in terms of what you define as lower risk—

Mr Stuart : I think there is very good progress across the whole front. With respect to lower risk, we will be waiting for the department of finance to conclude their work. I think that is slightly behind our work now, on a whole-of-department approach, across all the other grants in the department where we will be using a common framework. The key goal here, the holy grail of this for everyone, is to triage red tape and risk. So the lower the risk, the less process, the less reporting. We are trying very hard to have one agreement with each external party going forward. We are not there yet, but that is what we are working on—a single point of contact in the department; one agreement; lining up the reporting schedules for different programs, so that those who have multiple relationships with the department will find the work a lot diminished. And they are very excited about that; they are saying, 'When can we start?'

Senator SIEWERT: So, for example, in the care portfolios, where there are statutory requirements as well, when you say 'one agreement', will that then cover off the different reporting requirements under the statutory requirements as well?

Mr Stuart : I am struggling to think of a grant program under statutory requirements.

Senator SIEWERT: For example, the care money you give to aged-care, there are statutory requirements that they have to meet—

Ms Halton : They are not grants.

Mr Stuart : They are not grants; they are subsidy benefits.

Senator SIEWERT: Okay, point taken.

Ms Halton : They are benefits paid with respect to residents—

Senator SIEWERT: But some of those organisations will be grant recipients as well. Where it is possible for the various reporting requirements, will you be able to streamline that as well? So they are still reporting against their statutory requirements, but any grant requirements are also able to be reported through that process as well?

Ms Halton : I think we have to get into the specifics, Senator. What we are trying to do here is actually extremely difficult because you are trying to, if you like, synthesise years and years of programmatic history and approach and all the rest of it. For service providers who have benefit payments made with respect to residents, for example, together with other things they might be doing under grant programs, the notion that we will be able to combine those quickly—that is not going to happen that fast. I think that is quite difficult. I think we need to crack through the grants stuff first—get it up, get it running, streamline the processes. I have had a conversation with a couple out of the aged-care sector who are very good partners in trying to do this work. The problem we have, which I have said to them, is that we rightly get held to account in terms of what is happening and standards of care et cetera. Senator Fierravanti-Wells has just asked us about quality of care in the community and what are we going to do to look at that. Our problem is that that is a very difficult and contentious area. Trying to combine any streamlining in that area with this other process, I think is just a bridge too far—particularly in the short term.

Senator SIEWERT: Okay, thank you. Who is your compact advocate?

Mr Stuart : That is me, Senator.

Senator SIEWERT: Thank you. I know where to ask particular questions—

Mr Stuart : I have actually had seme contact from the not-for-profit sector on particular issues, and that has been really valuable. Because I am, in a sense, coordinating all grant reform in the department, that is a very useful position to hold.

Senator SIEWERT: Thank you.

CHAIR: Are there any more general questions for whole-of-portfolio?

Senator FIERRAVANTI-WELLS: I have a couple, if I can. In relation to budget papers—I am looking most particularly at 'trends in major components of medical services and benefits sub-function expenses'—

Ms Halton : Which budget paper are you reading from, Senator?

Senator FIERRAVANTI-WELLS: I am looking at statement No.6: Expenses and net capital investment.

Ms Halton : Which page, Senator?

Senator FIERRAVANTI-WELLS: Page 624. And 621 first, if I may, which has a summary of expenses in health and the total health figure for 2011-12 was $61 billion and then in 2013 it goes to $64 billion and then $67 billion and $71 billion.

Ms Halton : Yes.

Senator FIERRAVANTI-WELLS: Okay. Now, there is a drop. Can you give me a broad outline in relation to that drop? There is a fall in the first year from 2011-12 to 2012-13 and then there are growth rates of about four or five per cent in the following years. As I understand it, last year's budget indicated growth of about three per cent between these years, which also I understand factored in the private health insurance changes and the closure of the dental scheme. Can you give me an explanation as to why there has been a significant revision in this year's budget?

Ms Halton : We will take that on notice but, as I indicated to you earlier, there are a number of factors that combined, including things like HHF expenditure—large lumps of capital.

So there is a series of things that are unusual in terms of the profile of expenditure between 2011-12 and 2012-13. In fact, I was aware of this when we announced the budget, when I stood up to do my talk to the stakeholders, because we are very conscious of these figures. So perhaps we can come back to you on notice with some specifics. But there certainly were some profile issues in relation to a number of areas, including capital and also including moneys that were provided as part of the hospital reforms and when those funds were expensed. And, as you say, there are other things—

Senator FIERRAVANTI-WELLS: And will you be able to show me precisely those variations, and what was responsible for those variations?

Ms Halton : Sure.

Senator FIERRAVANTI-WELLS: In relation to the Medicare services that go over to 6.24, Medicare services indicate only a 1.3 per cent growth in 2012-13, compared with over six per cent in some of the other years in the forward estimates. In the context of understanding the whole-of-portfolio figures, can you explain why you are anticipating such limited growth in Medicare in 2012-13?

Ms Halton : It would probably be better to deal with this under the program, when the actual program officers are here.

Senator FIERRAVANTI-WELLS: When is it best to canvass this one again?

Ms Halton : It will be under MBS, which will be tonight at 7.30.

Senator FIERRAVANTI-WELLS: I might just come back to that in outcome 3. Thank you. I have one question in relation to the efficiency dividend. How does the efficiency dividend that was applied to the department in 2012 compare with other years? Has the 2.5 per cent across-government dividend, which was in MYEFO, been applied to the department in addition to any existing efficiency dividends? In other words, how many efficiency dividends are you factoring in?

Mr Stuart : In respect of the Department of Health and Ageing, we have the impact of the strategic review and the impact of the existing efficiency dividend, and then the impact of the new efficiency dividend of 2.5 per cent, which is a one-off increase in the efficiency dividend, which then carries on into future years.

Senator FIERRAVANTI-WELLS: Thank you. I have asked the question about departmental expenses in relation to the global financial questions, so thank you very much.