Minister for Health: Performance (20.03.2013)

Written on the 26 March 2013

Mr JENNINGS (South Eastern Metropolitan) -- I move:



That this house takes note of the answers given by the Minister for Health to questions without notice asked in this house on --


(1) 1 March 2011 regarding the commonwealth-state health agreement;


(2) 21 February 2013 regarding hospital waiting lists; and


(3) 7 March 2013 regarding hospital bed numbers.





Ms CROZIER (Southern Metropolitan) -- I am pleased to rise to speak this afternoon on Mr Jennings's motion. He outlines three particular areas in his motion, which states:


That this house takes note of the answers given by the Minister for Health to questions without notice asked in this house on --


(1) 1 March 2011 regarding the commonwealth-state health agreement;


(2) 21 February 2013 regarding hospital waiting lists; and


(3) 7 March 2013 regarding hospital bed numbers.



I am pleased Mr Jennings has brought these areas to the attention of the house because it gives me an opportunity to speak on what the government has done and to outline to the chamber exactly what the coalition faced when it came into government in 2010. I remind those in the chamber that significant black holes were found in hospital budgets at that time. I have spoken about those black holes before in this place. They included a $44 million unfunded completion cost for the Olivia Newton-John Cancer and Wellness Centre and a failure to provide $25 million to fit out the new Royal Children's Hospital with essential ICT capacity. I thought that was quite extraordinary. A billion-dollar hospital, which we all knew was a fabulous facility, was lacking the provision of $25 million for ICT -- something imperative in a modern day hospital. It showed the lack of planning under the direction of the then Minister for Health, Daniel Andrews, who is now the Leader of the Opposition. He did not manage that process at all well.


The other issue I find quite astounding is that over $55 million worth of Christmas salaries for doctors and nurses were underfunded. As somebody who has worked in the health system I can attest that for those doctors and nurses to be unaware at the time we came to power -- November 2010 -- that in a few weeks time, over that critical period, their salaries and penalty rates would not be funded is extraordinary. I have worked in hospitals on Christmas Day, and it is a very significant day for many people because they are in hospital and not at home with their families celebrating like everyone else. The doctors, nurses and everybody else working in hospitals at that time do a great job. It is often to assist their co-workers that people sacrifice that time. It is astounding that $55.2 million worth of Christmas salaries could be unfunded, and I think anyone who has worked in the health system would feel the same way.


That is what we faced when we came to government. I am pleased that since coming to office the coalition government has increased health funding by $1.3 billion to a record $13.7 billion in total. Victorian health service budgets increased by an average of 5.1 per cent in 2012-13. The state budget funding for hospitals has increased since the coalition was elected, including $9.3 billion allocated to acute health in 2012-13, which was $376 million more for that very important area than was provided in the 2011-12 budget.


The Victorian coalition government is committed to ensuring that we have appropriate and significant funding, and we have addressed that by increasing that funding, despite the challenges we faced in coming to office when we needed to find the additional money in the areas I have already outlined. They were significant figures -- $44 million for the Olivia Newton-John Cancer and Wellness Centre, $25 million for the Royal Children's Hospital IT infrastructure and $55 million for health workers' Christmas salaries. Those three very significant areas were all unfunded, and the minister and the government had to find funding to ensure that they had the appropriate funding and could continue.


Getting back to Mr Jennings's motion in relation to some of these specific areas, he made a number of claims in the course of his contribution. He accused the minister of absolving himself of responsibility for public hospitals and continually blaming the commonwealth in various areas. I will return to the commonwealth issue in a moment.


When former Prime Minister Kevin Rudd was in office -- I am not sure where he is situated at the moment or whether he is going to return to that position; one does not know in the current state of flux up in Canberra -- he had another of his grand plans to reform the health system. He used Victoria as a model, based on the reforms undertaken during the Kennett government years back in the 1990s. That was a process that I understood quite well, because at the time I was working at the Royal Women's Hospital.


The significant reforms that were occurring at every acute and major health service at the time obviously impacted on an institution such as that. We had to work with those reforms and put them in place, so I do have some understanding of the challenges at the time. It was incredibly difficult -- but of course that was off the back of the previous administration that the state had gotten used to, back in the late 1980s and early 1990s.


There were enormous challenges and reforms during those early Kennett years that that government needed to undertake. They were significant reforms, and as I said, I think that former Prime Minister Kevin Rudd wanted to acknowledge those significant reforms and how they held Victoria in good stead over a period of time where other states have wanted to follow.


The health agreement that the current coalition signed with the federal government when coming to office to provide certainty and consistency in the allocation of federal funding was undertaken. We have seen a number of areas that have impacted on the federal funding allocation to the health budget through various mechanisms, one of those being funding through a pool system.


In recent times that has been totally ignored, after the backflip that the commonwealth has undertaken in reversing its decision and reinstating that $107 million to the Victorian health services.


In Mr Jennings's contribution he commented on an answer Mr Davis gave to a question without notice about his representations to the commonwealth in asking for the restoration of money that was taken out midway through a financial year, when hospitals had had their moneys allocated to them, had set their budgets and had planned on the basis of those budgets.


When hospitals are planning their budgets they look at the number of services they can undertake, whether they are outpatient services, day surgery cases or surgery in general. Those are just some of the very important services that the health services undertake. To have money taken out midway through a financial year, when planning and services have been put in place, is quite extraordinary. I will get to the Senate inquiry, which looked at this matter in detail. I would urge anyone who has any interest in this area to read that Senate health report, because it outlines significantly the flawed argument that the federal government undertook.


Mr Jennings said in his contribution that he was a defender of the Victorian health system and that he worked 'assiduously' with his federal 'brothers and sisters' to restore that money. We on this side of the chamber would dispute that. On a number of occasions we actually asked opposition members to speak with their federal counterparts to argue for the $107 million to be restored to Victorian health services. If Mr Jennings did have a word in the Prime Minister's ear and with his federal counterparts, including the Minister for Health, Tanya Plibersek, then I thank him. That was the first part of it, but that was only for the $107 million that needed to be reinstated for this financial year. Victorian health services are going to have a further $368 million ripped out of them over the next three years. The government is arguing that it would like an acknowledgement from the federal government of that $368 million that is also to come back to Victorian hospitals and health services.


The DEPUTY PRESIDENT -- Order! Members of the gallery cannot take photographs while Parliament is in session.


Ms CROZIER -- As I was saying, I want to refer to the Senate report that looked at the whole issue of the federal health cuts. I think it is absolutely certain that there are a number of areas in the report that vindicate Minister Davis's position in arguing for Victoria's fair share to be returned to our health services.

As has been well reported, the Treasurer was basing the cuts at the time on population, and he was saying there had been a decrease in population in Victoria of in excess of 11 000 people.


Hon. D. M. Davis interjected.


Ms CROZIER -- Quite extraordinary. Anyone would know -- any Victorian, anyone who is out and about in our city, including the Minister for Planning, Mr Guy, who is just walking through the chamber -- would know exactly what we are talking about when we talk about future planning and population growth. There has been significant population growth in Victoria, and to say that the population had dropped by 11 000 was quite extraordinary.


Hon. D. M. Davis interjected.


The DEPUTY PRESIDENT -- Order! I inform Mr Davis that interjecting while one of his own members is speaking does not seem sensible, and certainly not when Mr Davis is walking through the chamber.


Ms CROZIER -- To return to what I was saying in relation to the federal Treasurer's flawed population data, the federal Senate inquiry report states that: The government however, attempts to claim these cuts to the states for health were not savings measures. During his MYEFO announcement press conference Treasurer Wayne Swan explained the cuts as follows:


There's been no cut at all and in fact states are continuing to receive very generous increases in terms of funding in health and education but the calculation of the latest indexation method done on an agreed formula, signed and sealed in the agreements, has produced in this year a lesser flow of money in some areas and nothing whatsoever to do with government decision making.


That shows the federal Treasurer has one point of view; however, his argument about population data was flawed. The argument that Victoria had had a decrease of in excess of 11 000 people -- having had that formula -- is quite extraordinary. The Senate report goes on to say that from a federal perspective the federal Treasurer has been actually found out, if you like, in relation to his miscalculation of this very important area.


The report says, in the section headed 'Changes to parameter values used in Treasurer's determination':


As noted above, the growth factor for hospital funding is calculated using three factors. The technology factor is fixed at 1.2 per cent. However, the other two factors -- the health-specific cost index and the growth in population estimates weighted for hospital utilisation -- vary over time.


Of course they vary over time in those three areas. The report continues:


It is the variation in these two factors for the Treasurer's 2012 determination which has resulted in the revision of payments to the states and territories.


Mr Davis, the Minister for Health, and the coalition government argued assiduously that at the heart of the matter was Australia's population growth rate between 31 December 2010 and 31 December 2011. The report states the committee concurred with that view. That highlights just how flawed Treasurer Wayne Swan's calculations were. To have imposed that onto our health services did not do him any favours; nor did it do the Prime Minister or the federal Minister for Health, Tanya Plibersek, any favours as they tried to argue that case on Mr Swan's behalf.


The conclusion of the Senate report goes on to state:


The committee considers that the basis on which the calculation of the funding cuts has been made is flawed.


The committee agrees that the best possible estimate of Australia's population should be used in coming to a population growth figure. However, the committee does not consider that the commonwealth's calculation of the population growth between December 2010 and December 2011 is defendable ...


This report contains damning indictments about what happened in Victoria's health services. The report acknowledges that the commonwealth's cuts were imposed on states and territories midway through the 2012-13 financial year and that that was following the Treasurer's determination of October 2012, which I have mentioned. In terms of any organisation being able to have an appropriate budget position, it is quite extraordinary for it to have money ripped out that way. I am therefore very pleased that the federal government has acknowledged that and is returning the $107 million to Victorian health services.


I would have to say that it needs to. In terms of those hospitals, I know a number of statements of priorities (SOPs) have been signed and agreed to. They were done on the basis of the original figures that were calculated under the first agreement. After the announcement by the commonwealth last October, new SOPs were signed. Now that the $107 million has been reinstated a third series of SOPs have had to be signed. This is very confusing for health services, and they deserve some certainty in this whole area.


That brings me to the point that no health service has yet received that $107 million -- and those health services are waiting.


They cannot plan for future services that they need to undertake, whether they be surgery, such as day surgery, or outpatient services or the running of a health service in any other manner. That money needs to be reinstated, and the Victorian coalition government would ask and call on the federal government to do that. We would ask Mr Jennings -- and he said he was working assiduously with his brothers and sisters at a federal level -- that he go and ask for that money to be paid back immediately, forthwith, because those health services are waiting.


A comment from Mr Jennings has been quoted in today's Age -- and it is quoted in relation to this whole issue of waiting lists. I know Mr Jennings is not here, but he may be listening, and this is his motion. The article in today's Age says:


Opposition health spokesman Gavin Jennings said the state government had tried to confuse Victorians about the impact of the $107 million federal funding reduction, while making its own cuts of about $123 million a year.
And I will come to that point in a minute.


There is no confusion about what the Victorian government has done. The confusion has come from the commonwealth government. it has taken away $107 million from health services midway through a financial year. That is incredibly confusing for any organisation, and hospitals are certainly complex. They need to have certainty in their budget. The article goes on to quote Mr Jennings as saying:


The truth these [documents] show is that waiting list numbers are a disaster, even after the money has been put back by the commonwealth ...


That simply is not the fact; it is not correct. Perhaps Mr Jennings knows something that I do not know. Perhaps the cheque from his federal counterparts is in the mail. But if Mr Jennings asked the dozens of health services across the state that are waiting for the money to be returned to them, they would say they have not seen one cent of it. I ask whether he knows something in making that statement as reported in the Age today, and whether he can call on his federal counterparts to get that money returned to Victorian health services.


In his motion Mr Jennings talks about the health agreement, which I referred to earlier in my contribution. Again I refer to the Senate inquiry that found that in the implementation of the agreement:


The states signed up in good faith to the funding agreements but ... the commonwealth pursued politically motivated funding cuts to improve its financial position at the expense of public hospital users.


That was an extraordinary finding by the Senate inquiry. It goes to the heart of the political motivation of the commonwealth in arguing in this very emotive policy area. Everybody knows that health is a difficult and complex portfolio area, and the Senate report, with those findings, is quite damning of the federal government. The federal Minister for Health, Ms Plibersek, should be astounded with that finding. I hope she takes notice of it and does not use politically motivated messaging or language, which she has, as I have heard and seen in those advertisements in the paper which try to explain the commonwealth's position. It is highly politically motivated and wrong for Mr Jennings to say that Minister Davis has been, I think his words were, 'wreaking merry havoc across summer' about this whole issue when in fact the minister has been arguing on behalf of Victorian patients and Victorian health services to return the money that has been stripped away from them.


It is not a question of being politically motivated in relation to this issue; it is about returning that money after it had been allocated in a budget process. I believe the commonwealth realised, as did the Victorian Labor opposition, that health services were quite bemused and astounded by the actions of the commonwealth government because of the impact it would have on them on a day-to-day basis. Quite rightly, Minister Davis and the coalition government have stood up for Victorian patients and health services in calling for the commonwealth government to return that money.


In today's Age article Mr Jennings referred to elective surgery waiting lists. I remind members that the former Labor government let $30 million in elective surgery funding lapse. We came to government at the end of 2010 and discovered that lapse in funding in 2011. There was a reduction of $50 million in national partnership agreement funding in July 2012 for elective surgery in emergency departments, which certainly had an impact on those two particular areas. At the time that partnership agreement was being discussed and signed the Victorian coalition government warned that the $50 million cut would create a shortfall for elective surgeries in Victoria alone. We are now feeling the impact of that in this very important area of health service delivery, and certainly those elective surgery waiting lists are something that the Victorian coalition government is addressing.


There is no question that the $107 million cut is having a further impact on the elective surgery waiting lists. As I said, there cannot be money stripped out of the budget if there are a number of procedures and surgeries planned to be undertaken.


If that happens, it causes uncertainty and there will be cancellation of surgery, postponement of surgery and surgery pushed out into other areas, which means that other figures have to be adjusted in a more negative aspect. The people who are being affected by this are Victorian patients.


Funding cuts at any time, as we have witnessed from the commonwealth, will have an impact. The hole cannot be plugged by simply writing a cheque, which we are waiting to receive, and then all the surgeries can be attended to overnight. It takes planning and it takes time. Resourcing issues with clinicians and a whole range of areas need to be undertaken. We cannot just have a cheque in the mail and pretend that surgeries are going to happen overnight. That will not happen. There will be a flow-on effect from these federal health cuts and it will take some time for health services to be able to catch up and to be able to plan and keep their services in line with what the expectation was at 1 July 2012 when that money was allocated in the 2012-13 budget.


I acknowledge that those waiting lists have been impacted. Many of the health services that have had this issue thrust upon them have worked hard to address many of the issues and have tried to inconvenience as few patients as possible, but a lot of it has been taken out of their control. I commend the hospital clinicians, staff and boards for their decision making in looking at this issue and trying to address it in the best possible way.


Mr Jennings's motion also goes to the question of hospital bed numbers. There is no doubt that the $1.3 billion increase in funding since we came to office will improve the situation, but there is also an absolute commitment to increase the capacity of our health and hospital systems. Through that health funding increase the coalition government has been able to look at that. We can see that with some of the new hospitals that are being planned for and built for a future Victoria; we are building beds for the future.


There was $522 million in the 2011-12 budget to build new beds and other system capacities and to renew existing assets.


A terrific new hospital is being planned for and will be built in Mrs Petrovich's area of Bendigo. It will be a significant facility for that area and will service many people from northern Victoria in a significant way. I am sure the people of that area are watching that project closely and welcoming it, as has been indicated by members who represent the area. No doubt there will be some challenges along the way; there always are with these things. They are difficult but important projects, and the government is committed to improving health services in that region as well as other regions right across the state.


We know that with these sorts of initiatives and projects we have to meet challenges along the way, and we are trying to do that.


Mr Jennings referred to money that was stripped out of the Victorian budget, but it is well known that it has not been stripped out by the Victorian coalition government but rather is being redirected to front-line services, because that is where capacity is needed, rather than our having a bloated bureaucracy.


We have made some cuts and trims to redirect money from the bureaucracy to front-line services, and that is only a good thing. Likewise with hospital advertising, this government has not gone around in helicopters with red hats, talking about this and that with the Premier doing this and that. You have not seen any of that. We have taken money out of advertising and put it into front-line services. The money has been redirected to make a more efficient health system and to ensure that the growing complexities of the population can be met.


There are many challenges with our population that we will meet.


We have an ageing population that will have an increase in chronic disease, will live longer, will have more acute health admissions and will require more health services. We acknowledge, as governments at all levels acknowledge, the challenging change in demographics. It is imperative that governments plan for a change in population and demographics to cater for our growing population, and we have looked at that. The previous government did not do an enormous amount of planning to meet those challenges in a whole lot of areas, and on coming to government we found significant areas of concern that we are addressing, and we are addressing those issues in a methodical and responsible way. It is about getting the budget back into a sound fiscal position so that we can cater for a growth in services as demand in Victoria continues to grow.


I have to dispute Mr Jennings's assertions and comments in relation to hospital bed numbers. He said that there was pain, suffering and negligence and that it is a sorry situation; they are all terms he used throughout his contribution to the debate. I reiterate that we came into government in 2010 with significant fiscal challenges in a range of areas. Health was only one; there were significant others. I do not need to remind the chamber of those -- we have been through them on a number of occasions -- but they take some management and need to be brought into line.


In addition to that we had $6.1 billion of GST revenue ripped out by the federal government.


In the latest example -- and these are big figures -- $107 million was ripped directly out of health in one financial year. These are issues that we are addressing and will continue to address. I am pleased that the commonwealth has backtracked on its decision to cut $107 million from health funding, but, as I said at the outset, I call on those opposite to speak to their federal counterparts and to ask for the $368 million to be reinstated to our health services. Otherwise, it will be a sorry situation; Mr Jennings is absolutely right. To avoid the pain, suffering and negligence that he described as being inflicted on Victorian patients by the Minister for Health and this government, which is over the top and emotive in itself, Mr Jennings's side should be arguing strongly for that money to be reinstated to ensure that Victorian patients have access to those health services.


These are difficult financial times. Whether we are looking at issues affecting us on a national or international level, governments need to be fiscally responsible and spend money wisely. That is why we have redirected money from bureaucracies to front-line services and from advertising campaigns back to areas where health services can be addressed and improved, but it takes planning to look at this entire area of health.


In my contribution I have addressed Mr Jennings's motion to take note of those three specific areas, and I look forward to hearing the contributions of others. The coalition government is standing up for Victorian patients. I commend the Minister for Health for the strong stance he has taken on this issue. He has spoken to in excess of 80 hospital boards -- nearly all the hospital boards across the state -- to explain the situation. They know what the federal government has done and are very concerned about it. They are waiting for the $107 million to be returned to their health services.


As I said in relation to the article in today's Age, if Mr Jennings knows something we do not know and the cheque is in the mail, that would be terrific. However, hospital services and patients are waiting on that money, and all in the house would agree that Victoria would very much welcome the $107 million and the further $368 million over the next three years.

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