Health (Commonwealth State Funding Arrangements) Bill 2012

Written on the 21 June 2012

I am very pleased to rise to speak on the Health (Commonwealth State Funding Arrangements) Bill 2012 and to have been able to listen to the contributions of Mr Jennings and Ms Hartland. I am also pleased that Mr Jennings has indicated that the opposition will be supporting the bill following what I am sure will be a fairly swift committee stage.


The purpose of this bill is to provide for the implementation of a national health reform agreement between the commonwealth and states and territories that was agreed to by the Council of Australian Governments on 2 August 2011. The bill establishes the office of the administrator of the national health funding pool, and I agree with Ms Hartland that Mr Jennings outlined the bill very succinctly and said that it was a fairly simple mechanism for the funding arrangements to occur and flow through to Victoria.


I will just remind members about a little bit of the history of what happened in finally signing the agreement. As Mr Jennings pointed out, it started under the former Labor government when the then Premier, John Brumby, and then health minister and now Leader of the Opposition in the Assembly, Daniel Andrews, did a deal with the federal Labor government. That deal really was not in the best interests of Victorian patients, and I have to commend the current Minister for Health, Mr Davis, and the current Premier, who went to Canberra and fought on behalf of all Victorians and importantly Victorian patients.


Earlier in 2010 the Western Australian Premier, Mr Barnett, had a number of concerns about that first deal. The resounding verdict was that then Premier Brumby and Minister for Health, Daniel Andrews, signed that deal without taking into consideration what it would actually mean. It was not a good deal for Victorians, full stop.


There was a degree of discussion about the agreement, and once Premier Baillieu and Minister Davis highlighted the aspects that were missing from that initial agreement and that Victorian health services and Victorian patients were going to be short-changed, the Labor states then followed suit. While these changes were started under the former Labor government, without the Baillieu government having gone in to bat for Victorians we would have a deal under which we would be significantly worse off. I commend the health minister and the Premier for taking up that fight, succinctly arguing the case and getting improved services for all Victorians.


Those improved services include the funding aspects that will lead to more hospital beds and, importantly, provide protection from forced amalgamations of local hospital networks and hospital health services. Mr Jennings made reference to that, and I have to agree with him. He said that Victoria should have a say in its health service arrangements.


I think he would agree that fighting for and achieving that particular aspect was a good thing. The deal will also allow for better clinical services and outcomes through reviews of proposed targets for elective surgery and emergency department services. As I already indicated, the deal has also brought forward significant amounts of funding.


I also agree with Mr Jennings that there are significant challenges in this area for all jurisdictions and health services. That is certainly the case. I also agree with Mr Jennings that we have confidence in the hospital staff and in Victoria having a very high standard of care across our health services. We acknowledge all the great work undertaken by the people in our various health services. I know Mr Jennings, Ms Hartland and I all watch what those health workers do, understand what they do and advocate for what they do.


In raising the challenges that the current government faces, it is also fair to remind the chamber of the pressures the Baillieu government was under last year when it was striking this deal. The commonwealth had just taken $4.1 billion out of Victoria's GST revenue, with very little consultation, and that was in light of what we were facing when we came to government -- project blow-outs that placed significant constraints on our budgetary process and fiscal position. We are now talking about the 2012-13 budget, but it is important to remind members of what we were dealing with at the time the Premier and the health minister struck this agreement. Despite those financial constraints, they went in to bat for Victorian patients and secured a better deal all round. As I said, there a number of significant gains in this respect.


Mr Jennings talked about the legacy of the health system in Victoria, which has been a leader across the nation. I am pleased to say that is absolutely true. The casemix or activity-based funding model started under the Kennett government. It is a model that has strengthened our financial management and planning of hospital services and was maintained by the Labor government. That model has held Victorian health services in great stead, and on a national level it is looked at by other states as a great model. There are many examples of what previous governments have done, and in the area of casemix activity it is one in which I was closely involved in and had some input into when I was working in the public health system, so I know how it worked operationally. Funding is a complex area, and health in itself is a complex area.


To get back to the mechanisms of the bill itself, it will establish the office of administrator of the national health funding pool. The minister for this jurisdiction, who is a member of the Standing Council on Health, will appoint the administrator to the office of the administrator of the national health funding pool.


The administrator will have various functions. As Mr Jennings highlighted very succinctly, the administrator will calculate and advise the Treasurer of the commonwealth of the amounts required to be paid by the commonwealth into each state pool account of the national health funding pool under the national health reform agreement, including advice on any reconciliation of those amounts based on subsequent actual service delivery.


The administrator will also monitor state payments into each state pool account, make payments from each state pool account in accordance with the directions of the state concerned and report publicly on the payments made into and from each state pool account and other matters.


The bill provides for the transparency, accountability and safeguards which all members would be interested in ensuring are in place when we are dealing with taxpayers money. We want to put that money to good purpose in relation to health service delivery.


When Premier Baillieu and Minister Davis went to Canberra and argued the case for all Victorians in relation to this health reform, they secured an agreement that allows for greater input from the state and local perspective, so there will be no forced amalgamations of health services.


The agreement allows for new national agencies, including the Independent Hospital Pricing Authority, to set a national efficient price for hospital services, and for the administrator aspects I have just highlighted. It also ensures that the pooling arrangements for Victorian hospital funding remain within Victoria.


Although this is a system that is set up by the commonwealth and there will be in effect another layer of bureaucracy administering those funds to the states, that cost will be borne by the commonwealth and not by Victorian taxpayers that would subsequently flow through to health services.


I think these are important elements to highlight.


Mr Jennings also highlighted the additional money that is coming to Victoria.


I have no doubt that that will be put to our health services in an efficient and effective manner. There are challenges amongst our health services; we all acknowledge that, but I am pleased to say that in addition to the management aspect these reforms will also ensure that the health services will not change as a result of the reform agreement. Also, the proposal for the commonwealth to take over responsibility for home and community care services will exclude Victoria, so Victoria will maintain that control. It is very important that we have a say in relation to how we administer our health funds and how that impacts directly on our health services, whether they are large health services or whether they are small local health services.


In conclusion, I am very proud to say that the Baillieu government has stood up for the interests of Victoria and Victorian patients.


This bill will ensure that the financial arrangements that provide commonwealth funding to our hospital services are appropriate and supportive of Victoria's established and effective hospital service system. It is a very good hospital service system which has held us in good stead so far, and I have great confidence that it will do so in the future. I commend the bill to the house.

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