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Friday, 26 May 1989
Page: 2784

Senator ROBERT RAY (Minister for Immigration, Local Government and Ethnic Affairs)(9.07) —I move:

That these Bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-


I bring before the Senate a Bill to enact a number of changes to improve a range of human services provided through the Community Services and Health Portfolio.

The most significant changes involve the implementation of the first stage of the new general practitioner fees package as agreed between the Government and the Royal Australian College of General Practitioners, and new private health insurance arrangements which are designed to maximise the security and protection of the insured aged.

The new GP arrangements are the most far reaching advances which have ever been achieved in general practice in this country and are consistent with advances occurring in many similar western nations. The new arrangements will promote better quality patient care, resulting in improved treatment and assessment outcomes through the provision of incentives to GPs to take part in continuing medical education and quality assurance programs.

Private health insurance arrangements are to be changed to protect the elderly and share the insurance risk of Australia's ageing population fairly among all private health insurance funds. The changes will lead to increased stability within the private health sector, advantaging the majority of health fund contributors in the short term, and the entire private health care industry in the longer term.

The Bill also proposes strengthening of the confidentiality provisions of the Australian Institute of Health Act 1987. It introduces a new pathology services table and changes the arrangements for future alterations to the table. The Bill establishes a private health insurance administration council to take over many of the health insurance functions currently performed by the Department of Community Services and Health. It introduces new health benefit arrangements to encourage greater use of day surgery, and establishes differential day only benefits based on the different types of treatments provided.

A further amendment will enable an independent person or body to apply for the classification of residents in nursing homes where the proprietor has frequently misclassified residents. The Bill provides for transitional funding arrangements for 38 nursing homes for disabled persons still covered under the Nursing Homes Assistance Act 1974 until that Act ceases to operate after 30 June 1992. Finally, there is a minor amendment in relation to the transfer of nurse education to the higher education sector and the dates of collection of higher education census data.

Part two of the Bill provides for amendments to the Australian Institute of Health Act 1987 to impose more stringent controls on release of information by the Institute, preventing the disclosure of information, other than to the Minister, contrary to the conditions under which it was supplied to the Institute.

The amendments recognise the concerns of States and Territories to ensure adequate safeguards of confidentiality of data which may be supplied by States and Territories to the Institute, in particular, the minor amendment to paragraph 29 (4) (b) which ensures that an information provider includes a State or Territory as a body politic and therefore gives that State or Territory power to set terms and conditions for the release or publication of the information it provided to the Institute, represents an agreed response to these concerns.

The amendments in part three of the Bill relate to an agreement between the Government and the Royal Australian College of General Practitioners on a package of measures designed to improve the quality and cost effectiveness of medical services provided by general practitioners.

The package provides a number of inter-related measures to provide incentives for general practitioners to strive to improve the quality of care:

A vocational register of general practitioners;

the requirement that for general practitioners to remain on the register they undertake continuing medical education and quality assurance programs accredited by the RACGP;

the introduction of new items into the Medicare benefits schedule for consultations by vocationally registered general practitioners;

the new items to attract higher fees than those currently available to general practitioners and to generally be based on both complexity of the service provided and the time taken; and

the introduction of improved audit and monitoring arrangements, involving an independent professional organisation, for services provided by vocationally registered general practitioners, which will extend to examining, referral and prescribing patterns and the ordering of diagnostic tests.

This Bill makes provision for the establishment of the vocational register which will enable the new items to be introduced from 1 August 1989 by regulations. Existing items for general practitioner services will remain for use by other doctors providing primary medical care.

The Government intends to introduce further legislation in the Budget session to permit the establishment of the improved audit and monitoring arrangements.

The proposed register will be maintained by the Health Insurance Commission. The Bill provides that the Commission shall register a medical practitioner who has been certified by the RACGP-or other body as determined by the Minister-as practising predominantly in general practice and as having appropriate training and experience in general practice or who is otherwise eligible in accordance with the regulations. Enrolment on the register will be voluntary.

In assessing a practitioner's medical practice, the RACGP will have regard to whether the practitioner provides a comprehensive primary medical service, including treating a wide range of patients and conditions using a variety of accepted medical skills and techniques, providing services away from the practitioner's surgery on request (for example home visits) and making appropriate provision for the practitioner's patients to have access to after hours medical care.

The Government has accepted that fellowship of the RACGP, or an equivalent post-graduate qualification in general practice, should ultimately be the only experience and training which make it appropriate for a practitioner to be placed on the vocational register. This will apply from 1995. However, to protect doctors already engaged in general practice, other qualifications and training will be accepted in the meantime, including membership of the RACGP, a certificate of satisfactory completion of the family medicine program, or five years experience in general practice. This will ensure that doctors who are currently in practice will be able to qualify for vocational registration on the basis of experience before the tighter requirement comes into effect in 1995.

I want to stress that any medical practitioner whose practice has been predominantly in general practice as defined for five years-whether full-time or part-time-will be eligible. The RACGP has defined part-time practice as a minimum of two sessions a week, which the Government regards as a generous provision.

The Government is concerned that the AMA has been involved in a campaign of misinformation, with its claims that part-time GPs, the majority of whom are women, will not be eligible to register, when a simple inquiry would have revealed that this was patently false. Likewise, doctors who work in sports medicine, student health clinics, women's health clinics and family planning clinics-other areas targeted by the AMA-will be assessed on an individual basis against the eligibility criteria.

It has been the aim of the Government and the RACGP to include as many GPs as possible within the eligibility criteria-not to exclude them.

The Government also takes issue with the AMA's attempts to depict the new arrangements as in some way discriminating or disadvantaging those doctors who are found to be ineligible. Rather, the reverse is true in that the arrangements will reward those GPs who are prepared to improve their skills by taking part in continuing medical education and quality assurance programs.

Certainly not all doctors will be eligible, but neither should they be if they are not prepared to meet those requirements. What the government and the RACGP are in effect seeking are changes in work practices which result in increased productivity in general practice through an improvement in the quality of patient care.

The Bill also makes provision for a doctor's name to be removed from the register in certain circumstances.

The proposals provide an active role for the relevant professional body, the RACGP, in ensuring the quality of general practice in Australia. It conforms with the role of other specialist medical colleges as the arbiters of professional standards in this country.

The RACGP will provide a review mechanism for its decisions relating to vocational registration, including independent arbitration, to ensure that its assessment processes are fair for all doctors. An independent arbitrator who is acceptable to both the aggrieved doctor and the RACGP will perform this function. Should such processes present difficulties, there are provisions in the Bill to enable registration to be done by other means and another body to be substituted for the RACGP.

The Bill also provides for the general public to be able to find out from the Commission the names of medical practitioners on the register and for the Commission to make information about the register available to the RACGP. These provisions will assist the public to make informed choices about medical care and will facilitate the RACGP's role in registration and removal from registration. The Government and the RACGP are jointly developing a program to better educate and inform the medical profession and the public about the new arrangements.

Taken together with the proposal for monitoring arrangements, these proposals will create a climate for improved patient care at the primary level, a more professional approach to general practice, and improved public accountability for the $1.4 billion in medicare benefits which go to underwriting the costs of general practitioners' services. In the longer term, the government expects general practitioners to be more willing to care for more complex conditions within their competence and to be more discriminating in their use of specialist referrals, prescribing and diagnostic tests.

This should lead to reduced costs in the secondary and tertiary sectors and overall a much more effective use of health resources.

The Government is confident that this package will have the overwhelming support of the majority of general practitioners, and of the community in general.

Part 3 of the Bill also includes new provisions for variations and alterations to the pathology services table. As a result of findings of the Joint Parliamentary Committee of Public Accounts Report Number 236, on `Medical Fraud and Overservicing-Pathology', a new statutory body-the Pathology Services Advisory Committee (PSAC)-was created to review pathology items and fee levels and related matters and to make recommendations to the Minister for Community Services and Health on such matters.

The framework of PSAC was designed to bring about a more appropriate level of financing of pathology services which would adequately compensate the industry, while at the same time removing the potential which had been identified by the PAC report for abuse and overservicing.

PSAC made its first recommendation, which the Government accepted, for an increase in fees of 6.62% to all pathology services, to take effect from 1 December 1987. In July 1988, PSAC recommended a new pathology services table (PST) aimed at rectifying most of the major concerns raised by the Parliamentary Accounts Committee. This new table came into effect on 1 November 1988. However, following a challenge in the Federal Court, the new table was ruled to be void and benefits reverted to the 1 December 1987 PST.

I should stress that the Federal Court ruling on the November 1988 table was not made on any inherent structural deficiency in the pathology table but on the basis that PSAC, in making its recommendation, had not followed parts of the principles determined for the performance of its functions. Subsequent legal opinion was that PSAC's previous recommendations to the Minister for Community Services and Health were also void-because PSAC had followed a similar approach in regard to the principles that had applied to the 1988 table-and payment of medicare benefits for pathology services therefore had to revert to the table in effect prior to PSAC's establishment, that is the August 1986 pathology table. This table against which medicare benefits are currently being paid has all the deficiencies identified by the PAC.

Late in 1988, the RCPA withdrew its nominees from PSAC, rendering the committee inoperative. In effect, under the existing legislation, this means that the pathology table cannot be amended. The Government therefore has no option but to introduce this amending legislation so the pathology table can be varied when necessary.

This legislation proposes that those provisions in the Health Insurance Act relating to the pathology services table and PSAC mechanisms be repealed and replaced with a structure which allows the Minister for Community Services and Health to determine an appropriate table which is then prescribed by regulation. This is a similar mechanism which is in place, and has been in place for many years, in respect of the general medical services table.

The new table is based broadly on the 1988 table recommended by PSAC, but with modifications to reflect some of the concerns raised by the profession. While it simplifies the existing table, taking into account advances in technology which have occurred since the last major restructuring of the pathology services table in 1977, and reduces the overall number of items, it also eases some of the restrictions contained in the 1988 table in relation to the availability of some tests. The Government is confident that the new table will promote good medical practice and reduce the potential for abuses, and believes it essential for it to be put in place to allow for a more appropriate level of medicare benefits for patients compared to the existing table.

The Minister for Community Services and Health would like to place on record his appreciation of the considerable input made by the pathology industry through the Australian Association of Pathology Practices (AAPP) in the development of the new PST which is appended to the draft Bill. AAPP gave freely of its time and expertise throughout this process and the Minister is pleased that agreement has been reached on the structure of the new table and the description of individual items within it.

The Government is confident that the continuation of this consultative process in relation to matters concerning the pathology services table will be of benefit to the Government, pathologists, and patients.

Part 4 of the Bill seeks to make two main changes which affect people with private health insurance, firstly in relation to revised reinsurance arrangements which will commence from 1 June 1989, and secondly in relation to the establishment and functions of the Private Health Insurance Administration Council.

The reinsurance account arrangements form an integral part of community rating, which has always applied to the health insurance arrangements in Australia and has an important social welfare role. This principle provides that all people are treated equally for health insurance purposes, regardless of age, medical history or family size. The alternative is a risk rated system where the young and healthy would pay lower premiums but the aged, the chronically ill, and people with large families would find the cost of insurance prohibitive-they would pay far more than they do currently.

The reinsurance arrangements provide a mechanism for part of the benefits liability for heavy claiming contributors to be shared between funds on an equitable basis. The current system, which has remained largely unchanged since 1978, involves sharing the benefits liability at the basic table rate for any days in excess of 35 per contributor unit in a 12 month period. The effect of this system is that funds with a higher than average reinsurance claims experience are subsidised by funds with a lower than average experience.

As a result of concerns that the current arrangements were not equally reflecting the varying experience of funds with a disproportionate share of heavy drawing contributors, a detailed review was conducted. That review showed that benefits paid out to the 65 and over age group amounted to about one third of total hospital benefits, although the group represented only about 15 per cent of the total insured population. Moreover, there was a significant disparity between funds in the liability for these benefits, some 70 per cent of which related to hospitalisation under 35 days in a year and were thus not included in the current reinsurance arrangements.

It also became apparent that total hospital experience, as opposed to basic table only, would be a more appropriate basis for reinsurance as some 83 per cent of all those insured have supplementary cover. In addition, basic table cover is being increasingly aligned with public hospital experience and thus increasingly out of step with benefits paid for private hospital services.

After extensive consultation with the private health care sector, preference was given to a reinsurance system that covered the total hospital experience of the 65 and over age group as well as total hospital experience over 35 days for the under 65s. The proposed new arrangements therefore provide a much fairer basis for reinsurance and specifically recognise those people, that is, the aged and chronically ill, who are the heaviest users of hospital services.

These changes will provide greatest assistance to those long established non-profit funds with a disproportionately high share of aged and chronically ill members. Where possible, the Government will be looking to those funds to reduce their contribution rates or forgo planned future increases. Some funds, particularly the small new for-profit funds and the closed funds with restricted membership, and which have a better than average claims experience related to age profile, will, of course, face an increased liability, which is the very nature of reinsurance.

Many of these funds have enjoyed a privileged position within the health insurance market, either because they are relatively new or because they have been able to be more selective of their members. The Government has decided that this unfair competitive advantage should not be maintained at the expense of the majority of contributors and that there should be a more even playing field between funds.

The extent to which these changes will need to be reflected in contribution rates will vary from fund to fund, depending on factors such as the profitability of current contribution rates and the level of accumulated reserves. Many of those funds with an increased liability already possess substantial reserves.

As well, the Government will be making a one-off contribution to reinsurance of $20 million this financial year to minimise the effect of the new arrangements. This money will be disbursed over the next eighteen months to December 1990 so as to cushion the impact of the reinsurance changes on those funds most heavily affected. Apart from this one-off contribution, there will be no further Commonwealth contribution to reinsurance.

This combination of factors will mean that any increases in contribution rates as a direct cause of the new arrangements will be minimal.

It should be noted that although the changes will increase the reinsurance pool from $200 million to more than $600 million a year, this will result in a redistribution of only an estimated $70 million, as compared to $29 million under the current arrangements. This represents less than 5 per cent out of total hospital benefits of $1.54 billion.

Thus, while these new arrangements will provide for a greater sharing of risk and therefore greater stability within the industry, there will still be ample scope for competition and cost efficiency.

As a further incentive for funds to seek to expand their memberships, newly insured members-not including those who transfer between funds-will be excluded from the reinsurance count for the first year of their membership, although their claims will be included in the reinsurance pool assessments.

The new arrangements remove the disincentive to insure people aged over 65. They also provide a positive incentive for funds to offer better supplementary benefits and therefore will encourage the use of private hospitals-a fact which the Australian Private Hospitals Association attempts to gloss over. The supplementary benefits which will be acceptable for reinsurance purposes will be defined by ministerial determination.

By providing for a greater sharing between health funds of the cost of caring for the aged and the chronically ill, the Government is underwriting its commitment to community rating-a commitment which to date has been shared by those opposite and which I would hope they would continue to share, as community rating works to the benefit of the aged, the chronically ill, and large families.

Much needless anxiety has been generated in recent times by hysterical claims about a supposed crisis in the private health care industry, yet an analysis of the facts shows that this is simply not the case. Over the past four years, the private health sector has remained relatively stable, with only small variations overall in both the levels of private health insurance coverage and in private hospital utilisation. Indeed despite what some prophets of doom have claimed, the number of people with private hospital cover has grown by more than one million in that period. The Government has always maintained that Medicare's continued success and high popularity is dependent upon the maintenance of a strong, viable private health care sector.

The Government recognises that there are particular pressure points within the private health care market and indeed these changes are designed to alleviate some of those pressures. However they are not intended to solve every problem besetting the private health care market as some would wish.

It is not the Government's responsibility to maintain the viability of every private hospital bed in Australia. That would simply better sustain an inefficient private system at public expense. Nor is it the Government's responsibility to compel or encourage people to take out private health insurance. Under Medicare, all Australians are covered for essential medical and hospital treatment and then have the freedom to choose whether to take out additional private cover.

With this initiative, the Government is ensuring increased stability for health fund contributors and a more even playing field for the private health funds-it is now up to the private health funds, private hospitals, and private doctors to make the private health care market work.

For example, if private funds and private hospitals cannot agree to closely align their charges and benefits, and if private hospitals will not observe the step down periods, so that patients are left substantially out of pocket even after paying top table insurance, then quite naturally they will question whether they should retain their private cover or go to private hospitals. But these are problems which only the industry can resolve.

This Bill also provides for the devolution to an industry body of certain private health insurance functions currently carried out by the Department of Community Services and Health. This proposal accords with the Government's budget strategy to reduce the size of the public sector and its policy of reducing the degree of regulation in the private sector.

The industry body is to be known as the Private Health Insurance Administration Council. It will be under the control of an independent Commissioner, who shall have four advisers-three representing the Health Insurance industry with the remaining adviser also being independent. Members of the Council will be appointed in accordance with guidelines which will be developed in consultation with the industry.

The main functions of the Council will be to:

administer the reinsurance arrangements;

monitor the financial performance of health funds to ensure viability and to make recommendations as to the action to be taken where a fund's experience declines;

collect and disseminate financial and statistical data, including an annual report for tabling in Parliament, on health funds' operations; and

administer the funding arrangements for the operation of acute care advisory committees.

The Bill proposes to allow individuals to seek an injunction from the Federal Court against an organisation that appears to be acting in breach of Section 67 of the National Health Act. This section was primarily designed to ensure that health insurance business could only be offered by registered health benefits organisations in accordance with community rating.

Section 67 has, in the interpretation of `Health Insurance Business' versus `Accident and Sickness Insurance Business', generated a substantial number of legal challenges which have proven to be both complex and time consuming. Departmental resources will no longer be available to be devoted to the resolution of these disputes.

The Bill also provides that organisations may register as a health benefits organisation on a national basis rather than a state basis as at present. However, organisations will still need to conduct a separate fund for each state in which they have approval to operate. Also, they will still need to seek approval to transfer reserves between states as a safeguard against predatory pricing to increase their membership size.

The repeal of Section 73baa of the National Health Act which controls diversification activities by registered organisations is merely in keeping with decreasing unnecessary regulation.

The Bill also provides for tighter solvency requirements for health funds, similar to the requirements for general insurers provided under the Insurance Act.

Organisations will be required, nationally, to maintain the greater part of $1 million (with provision to prescribe a higher amount to maintain monetary value because of the effect of inflation) or two months' contribution income. Provision is included to exempt funds from this requirement-for example, for small funds which would have to cease business if forced to carry reserves of $1 million. Where exemptions are sought by existing organisations they will need to produce satisfactory actuarial and other evidence to demonstrate their viability. No exemption will apply, however, to a new organisation seeking registration.

These more stringent requirements are considered imperative as a safeguard against a fund collapsing, particularly in this increasingly `de-regulated' environment. However, in the unlikely event of a collapse two measures are proposed to protect the interests of contributors.

Firstly, the Private Health Insurance Administration Council will be empowered to impose a levy on health funds for the purposes of meeting any outstanding claims for benefits of the collapsed fund. Secondly, the Bill proposes an expansion of a condition of registration on funds to accept former contributors of a collapsed fund with full continuity of benefits entitlements.

The changes proposed to section 78 of the National Health Act are designed to simplify the processing of changes in health fund rules and complement the reduction in departmental staff resources.

The purpose of the changes in clause 48 of the Bill is to facilitate mergers between registered health benefits organisations located in different states. Currently mergers can only take place between organisations in the same State. This amendment is consistent with that contained in clause 28 to provide for national registration of organisations.

Clause 51 makes provision to prescribe by national health regulation a specific modification to the operation of the basic private table. The purpose of this amendment is to allow for a health fund to seek ministerial approval for self-funded pilot or demonstration schemes to advance private health insurance.

As part of the devolution process, provision is made for a rationalisation of the acute care advisory committee review process and hands over responsibility for the administration and financing of the process to the Private Health Insurance Administration Council. However, the purpose of the review process, namely to adjudicate on whether certain long term patients in hospitals are acute care patients or nursing home type patients, remains unaffected, as will the medical basis for that adjudication.

Clause 17 is designed to close a loophole whereby `gap' type medical benefits can be paid when not related to the actual loss sustained in meeting medical expenses. This practice is contrary to the Government's policy of prohibiting certain medical insurance, as intended by section 126 of the Health Insurance Act.

In clauses 20, 21 and 22, changes are proposed to remove anomalies in the current day hospital arrangements, as well as to encourage day only admissions in lieu of overnight inpatient hospital stays, for a range of surgical operations and medical procedures.

Overseas experience suggests that up to 40 per cent of surgical procedures can be safely undertaken on a day-only basis. The amendments proposed should ultimately achieve a similar result for Australia, which will:

be more convenient for patients;

assist in reducting public hospital waiting times;

reduce hospital costs; and

contain health fund premiums.

The proposals allow for the identification of a range of largely surgical procedures considered suitable for day-only admissions to either hospitals or licensed free-standing day surgery centres. These procedures will, where the patient is privately insured, qualify for a day-only basic table benefit rather than a full inpatient hospital benefit unless the patient's doctor certifies that an overnight admission was warranted because of medical, social or environmental reasons.

As an adjunct, in recognition of the varying levels of complexity of procedures which can be carried out on a day-only basis, a grouping of the procedures will be undertaken to which a differential scale of basic insurance benefits will apply. The present arrangement of a flat rate benefit does not recognise the differing costs and complexities of individual procedures.

These changes are designed to further promote day surgery in line with the special funding being provided to the States and Territories under the new medicare agreement incentive package arrangements which provide specific grants for the development and improvement of day surgery in the public hospital system.

The Bill also amends the National Health Act to introduce provisions designed to prevent abuse of the resident classification system. Under current arrangements nursing home proprietors are able to abuse the resident classification system by providing information leading to the classification of residents at unjustifiable levels, thereby obtaining excess benefits.

These amendments enable the secretary of the Department of Community Services and Health to determine that an independent person or body should apply for the classification of residents in cases of flagrant and frequently provided inaccurate information leading to the classification of residents at levels which have not been sustained at review. A nursing home proprietor will have the right to request a review by the Minister of the secretary's determination.

The Bill also facilitates the phased transfer of all nursing homes for disabled persons from the Nursing Homes Assistance Act 1974 to the Disability Services Act 1986, which provides access for people with disabilities to a more appropriate and extensive range of services.

Honourable Senators would be aware that all aged persons nursing homes previously covered by the Nursing Homes Assistance Act have been transferred to the National Health Act. The Nursing Homes Assistance Act now covers only 38 nursing homes for disabled persons, with the further 20 nursing homes for disabled persons covered by the National Health Act.

It is the Government's intention that all nursing homes for disabled persons should be brought under the Disability Services Act by June 30, 1992. All of these homes were advised of this in May 1988. Eight have transferred and a number of others have indicated their intention of doing so.

The nursing homes have also been advised that once they transfer under the Disability Services Act, additional funding, as necessary, will be made available to enable them to deliver a less restrictive range of services to people with disabilities.

Consistent with the Government's view that the nursing home model does not provide the most appropriate, least restrictive, accommodation for people with disabilities, the Bill introduces a sunset clause to the Nursing Homes Assistance Act to provide that the Act will cease to operate after 30 June 1992 and provides that no approvals will be given for new nursing homes under this Act. This brings services funded under the Act in line with those services formerly funded under the Handicapped Persons Assistance Act 1974, which are already required to have transferred to section 10 status under the Disability Services Act by that date.

The Bill also amends the definition of ``nursing home care'' by including a specific reference to ``personal care'' which is defined as ``assistance of a personal nature given to help a person attend to his or her daily needs or carry out his or her daily routine''. This recognises that many people with disabilities are in nursing homes because they have high personal care needs, not because they require the medical model of nursing care provided in such homes.

The Bill also seeks to establish an indexed upper limit on the level of funding that can be provided to nursing homes that choose to remain under the Nursing Homes Assistance Act. The Bill therefore provides for the continuation of the previous deficit financing arrangements, with the proviso that the level of ordinary expenditure per occupied bed in 1988-89 can be increased only in accordance with an approved level of indexation.

Finally, the proposed simple amendment to the States Grants (Nurse Education Transfer Assistance) Act 1985 is consequent upon a change introduced by the Department of Employment, Education and Training to collect census data on students enrolled in higher education courses on 31 March and 31 August rather than 30 April and 30 September. The census data is used to check, for payments purposes, that the planned numbers of students are actually enrolled.

Any future amendments to the key dates for collection, or other matters required or permitted by the Act to be prescribed, may be made by regulation of the Governor-General.

Financial Impact Statement

The amendments to the AIH Act have no financial impact on government outlays.

The financial impact of the new GP fee arrangements will be announced separately as part of the government's statement on Medicare fee increases for 1989/90. The revised pathology services table arrangements will result in a saving of $45 million on the forward estimates for 1989/90 and 1990/91.

The Government will be providing a one-off payment of $20 million to the Reinsurance Trust Fund in this financial year but will remove its $1 million annual contribution from 1989-90. The effect on the CPI of the full impact of the reinsurance changes as reflected in contribution rates will be nil.

An amount of $300,000 will be provided over three years to assist with the establishment costs of the Private Health Insurance Administration Council. All other expenses will be borne by the industry, with the Council having the power to impose levies to meet the costs.

The amendments to the Nursing Homes Assistance Act are expected to provide moderate savings in the order of $1 million a year, although this will be offset by the requirement for additional funds to assist nursing homes for disabled persons to make the transition to the models of service delivery required under the Disability Services Act.

I commend the Bill to the Senate.


This Bill authorises the Commonwealth to enter into a new five year agreement with each State and with the Australian Capital Territory and the Northern Territory for the provision of services for homeless people in crises under a new supported accommodation assistance program (SAAP).

When this Government came to office in March 1983, it identified homelessness as a major priority for urgent attention. At that time, there were no clear policies or directions to remedy youth or older age homelessness and there was no coordination of emergency accommodation services for women and children. Some programs were administered and funded by the Commonwealth and others were administered and cost shared by States.

There was no overall planning and programs were uncoordinated and unnecessarily complex. Needs were not being met due to lack of planning and due to restrictions on the assistance which could be provided. Funding of approved projects under existing program guidelines was often inadequate.

On coming to office, we established, in 1983, a major review of crisis accommodation programs. The review found that there was no logical basis for the existing arrangements. As a result of the review's recommendations, the Government established the Supported Accommodation Assistance Program-the SAAP program-in January 1985, bringing together existing services under a common funding and policy auspice.

SAAP is a jointly funded Commonwealth/State program administered by the States. Under the program, non-Government organisations and local government authorities receive recurrent and non-housing capital funds to provide supported accommodation and related support services to homeless people in crisis and who need help to move towards independent living.

A wide range of services are provided including refuges, drop-in centres, half-way houses, meals services, counselling in daily living skills and referral and advocacy services. The program's operation is governed by a Commonwealth/State agreement which will expire on 30 June 1989.

A jointly funded national evaluation of the SAAP program was conducted by an independent consultant, Ms Colleen Chesterman, in 1987, to examine the program's effectiveness and to advise on ways of refining its design and focus.

In the course of the review, virtually all SAAP service providers were consulted as well as numerous organisations supporting the homeless in every State and Territory.

The SAAP review report, `Homes Away From Home', was publicly released in February 1988. The report noted the program's very major achievements to date. It concluded that SAAP was well targeted, providing vital emotional and material assistance to the most disadvantaged people in Australia-people who are poor with insecure housing, many of whom have suffered physical abuse, addiction or institutionalisation.

The review noted that there has been a marked increase in the level of resources allocated by both Federal and State Governments since the introduction of SAAP which has resulted in greatly expanded assistance for homeless people in crisis. There are now some 800 SAAP services operating in a co-ordinated fashion from some 1200 outlets.

Data from the national SAAP client data collection indicated that, on any one day, over 11,000 people throughout Australia are assisted under SAAP, of which:

1,500 are in youth refuges;

2,500 are in women's refuges;

4,200 are in general crisis accommodation services; and

3,100 receive non-accommodation services such as meals, counselling and advice.

Moreover, the introduction of SAAP has placed many services on a secure financial footing for the first time. This has enabled providers to improve the quality of accommodation and appropriateness of services provided, particularly through the provision of non-institutional client focused services.

The SAAP review recommended the continuation of SAAP as a jointly funded Commonwealth/State program supported by a new five year agreement with each State and Territory.

The recent report of the National Inquiry Into Homeless Children undertaken by the Human Rights and Equal Opportunities Commission, known as the Burdekin Report, reinforces the need for a supported accommodation assistance program. Clearly, responses to the complex web of issues related to youth homelessness cannot be confined to one policy area or level of Government. However, the new SAAP program will provide major improvements to the Government's response to the problem of homeless young people. Some States have already increased the emphasis on medium and longer term alternatives to youth refuges and this trend will continue under the new program.

The development of a range of types of services with an emphasis on moving to independent living as soon as possible will be encouraged, consistent with the recommendations of the SAAP Review Report.

A draft Commonwealth/State agreement was presented to Social Welfare Ministers at their meeting on 20 March 1989. State Ministers endorsed that agreement but the Commonwealth was concerned to ensure that the position of young children was clarified. To this end, a definition of young people has been included.

The agreement, which forms a Schedule to this Bill, covers the joint arrangements for a new jointly funded Commonwealth/State program administered by the States and Territories which would operate for five years from 1 July 1989.

The agreement takes account of the experience of the current program, the views of States and community groups expressed through the operation of the program and its advisory processes and the SAAP Review's findings and recommendations.

The objective of the new program will be the provision by non-profit organisations and local governments, with financial assistance from the Commonwealth and the States, of transitional supported accommodation services and related supported services to men, women and children who are homeless and in crisis to help them move towards independent living, where appropriate, or other alternatives such as long term supported housing, as soon as possible.

The primary principle of the new program is to ensure that homeless people in crisis in Australia have access to adequate and appropriate transitional supported accommodation and related support services. In implementing this principle, assistance provided will also reflect the following detailed principles.

The focus of the program will be on transitional assistance. Services will be designed to be of varying duration and levels of support to meet the needs of individuals to move towards independent living or other appropriate alternatives;

The emphasis will be on ensuring individuals retain maximum independence;

There will be early assessment of clients' needs, referral to more appropriate services or programs where required and available and assistance to secure long term housing alternatives;

Services will be available to all sections of the community;

Services will be sensitive to the problems of homelessness, domestic violence and personal crisis and will actively work to enhance the dignity, self esteem and independence of clients;

Services will assist clients in ways which recognise the individual needs of clients, develop clients' independence and enhance their own support network; and

Priority will be given to services involved in direct service provision for homeless people in crisis and whose focus is on assistance for individual clients.

The new program will cover a range of service models of varying duration, type and level of support. It will include services designed to meet the particular needs of women who are homeless and/or in crisis as a result of domestic violence as well as services for Aboriginal people and people from non English-speaking backgrounds. Services for chronically homeless people with limited capacity for independent living will continue to be eligible.

It is important that SAAP is not used as a substitute for other programs of assistance by State governments for homeless youth. State governments have responsibility for children under 16 years and the Commonwealth is concerned to ensure that SAAP does not become the easy way out for States.

For this reason, the agreement provides that new services which cater exclusively for children under 16 years will not be funded under this program. As well, the agreement provides that SAAP will not be used to replace or duplicate services and assistance already provided by, or which are the responsibility of, other government programs or services such as substitute care and aged care.

Under the new program all people who are homeless and in crisis are able to be assisted. However, for some groups such as young people under 16 or the frail aged, SAAP cannot provide the specialised services required. The program embodies the principles that for all groups helped under the program there is to be early assessment or clients needs and referral to more appropriate services or programs where required and available.

No existing SAAP services will be disadvantaged by the introduction of the new arrangements. Services currently funded under SAAP will continue to be funded under the new program, subject to normal accountability and performance standards.

Financial assistance to the States shall be by way of grants. The Commonwealth and the States will continue to provide base funding equivalent to the level of their annual contribution to the program as at 30 June in this year immediately preceding the relevant financial year, indexed on an annual basis. At 30 June 1989, Commonwealth base funding for SAAP will be $64.1 million and States' base funding will be $40.3 million. This represents a real increase of 248% in Commonwealth/State funding for SAAP since the commencement of the program in 1985.

Despite the very great increase in Commonwealth/State resources devoted to homeless people in crisis, there is an urgent and increasing need for additional services. Accordingly, the Commonwealth is providing $5 million per year for new and expanded services for the first three years of the new program on the basis of equivalent forward commitment and dollar for dollar matching by the States. Commonwealth and State growth funds accepted in one year would be incorporated in the program base for the following year and the total base indexed. In total, this represents an increased Commonwealth commitment of $40 million over three years. These additional Commonwealth funds will bring the total Federal Government commitment to the program, including maintenance of current expenditure, to about $240 million over the three years to 1992 which represents real growth of some 20% over the three year period.

An important new feature of the SAAP program will be the development of Commonwealth/State plans which will set out the operation of the program for each year in the State. The plans shall include:

An assessment of existing service provision and distribution;

An assessment of unmet need;

The agreed Commonwealth/State priorities for the year, including identified target groups;

Program finances for the year;

The timing, content and process of major program reviews;

Proposed research and data collections for the year in relation to the State program or on National issues; and

The timetable for planning and approval processes in the current and the subsequent financial year.

Feedback and advice from SAAP service providers and relevant community groups is a vital element in the development of the Commonwealth/State plan. Accordingly, the new program provides for the development of new and enhanced advisory structures. A ministerial advisory committee will be established in each State comprised of members drawn from service providers and other parties with relevant expertise (forming the majority of the committee) and Commonwealth and State Government officials.

The ministerial advisory committee shall provide advice to Ministers on priorities to be taken into account in the annual planning processes, levels of unmet need and matters such as program accountability requirements, service standards and data needs. The plan itself will be jointly approved by the responsible Commonwealth and State Ministers.

Within the current SAAP program, there are three sub-programs for homeless people in crisis relating to women, youth and general services. The SAAP review found that the current SAAP sub-programs have played an important role in the establishment phase of SAAP but suggested that the sub-program focus had created unnecessary complexity, led to restrictions which disadvantaged certain high need groups (for example, single homeless women and families) and hampered flexibility in planning and referral. It recommended the replacement of sub-programs with target groups.

Accordingly, under the new program, funds will be allocated within States each year according to priority target groups rather than sub-programs. Planning for the development of services and the allocation of resources will be on the basis of priority target groups identified in the planning process.

The new program covers a range of measures which will lead to improved program effectiveness and efficiency. Apart from the plan, these include service agreements between all SAAP services and State Governments incorporating agreed nationally consistent provisions, and regular review of service performance.

Another important feature of the proposed agreement is in the area of user rights. The Commonwealth and States will agree within two years of the commencement of the agreement on mechanisms for resolving breaches of individual rights.

Such mechanisms will include principles and strategies for the protection of users' rights, which may include such matters as participation in decision making. Mechanisms will also include internal grievance procedures for the resolution of breaches of user rights at the service provider level and external review procedures. SAAP has been to the forefront in involving clients in decisions about issues which affect them. These proposals will continue to provide protection and dignity to people at a traumatic time of their life.

Assistance for homeless people in crisis is a shared Commonwealth/State responsibility and an area which requires close cooperation in order to achieve the best possible outcome from available resources.

Both the Commonwealth and States have vital but different roles to play. To ensure that there is no duplication of effort, the agreement clearly sets out Commonwealth and States roles and areas in which joint action is required. While the States will continue to be responsible for administration of the new program, joint ministerial approval will continue to be required in respect of matters such as the funding of new services and variations to, or defunding of, existing services.

Capital funds for SAAP services will continue to be made available under the Crisis Accommodation Program (CAP) within the Commonwealth/State housing agreement. In 1988-89 the Commonwealth will provide $19.5 million under CAP. SAAP and CAP will be dealt with by the same advisory committee in each State to provide a co-ordinated approach.

Apart from authorising financial assistance to the states, this Bill seeks authority for the Commonwealth use up to 2 per cent of Commonwealth growth funds each year for the purpose of national research and development. This will provide scope for Commonwealth initiatives in program development and national research.

Access to adequate and affordable housing for all is a major priority within the Government's social justice strategy. The new supported accommodation assistance program will build on the experiences of SAAP over the last four and a half years and will provide a more coherent and effective approach to the problems of people who are homeless and in crisis.

Through this Bill, the Commonwealth, in partnership with the States, is continuing its commitment to the funding of supported accommodation and related services. I thank the State and Territory Ministers for their cooperation in the formulation of the new program.

I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.