The Federal Government will inject an extra $915 million over
five years into the public health systems of the Australian States
and Territories.
The provision of these additional funds are conditional on the States
and Territories which have not yet signed Australian Health Care Agreements
indicating their willingness to do so by 28th August. Queensland
and the Australian Capital Territory have already reached agreement
with the Commonwealth.
Victoria, South Australia, Western Australia and the Northern Territory
have already indicated their willingness to sign Australian Health
Care Agreements as a consequence of the new offer made by the Commonwealth.
I am confident that New South Wales will also indicate its willingness
to sign up by 28th August.
Resolving this funding impasse will lead to significant improvements
in the quality, accessibility and flexibility of our National Health
Care systems.
The States and the Northern Territory had been seeking a $5.5 billion
lift in funding over five years.
In discussions over recent weeks it became apparent that a mutually
acceptable resolution could be reached if the Commonwealth was prepared
to slightly increase the base funding for public hospitals and to
provide more flexibility in how our offer was structured.
Accordingly the Commonwealth has been prepared to increase the five-year
funding by an additional $915 million taking the full five-year allocation
to $31.34 billion compared to $23.4 billion provided under the 1993-98
Labor Medicare Agreements.
This amounts to an increase in real funding for the States and Territories
of 10.2% in 1998-99 and 17.6% over the five years compared to 1997-98.
Under the revised offer, base funding for the States and Territories
will be increased by an additional $200 million in 1998-99 ($1.1 billion
over five years) over and above the funding already being provided
under the agreements already accepted by Queensland and the ACT, or
through specific purpose payments to the remaining jurisdictions.
This will bring the total increase in the Commonwealth's funding
under the Australian Health Care Agreements, over and above any amount
already included in the forward estimates, to $3.834 billion over
five years.
Fulfilling commitments I have previously given to Queensland and the
ACT, both jurisdictions will share proportionally in the additional
increase in the base funding to be provided under the Australian Health
Care Agreements.
Of the additional base funding, $850 million is new money agreed by
the Commonwealth, with the remaining $250 million being transferred
into base funding from the National Health Development Fund.
The funding available for infrastructure projects through the National
Health Development Fund will consequently be reduced from $500 million
to $250 million over five years.
The Commonwealth has also agreed to funding totaling around $65 million
for State and Territory specific health priority projects.
The $680 million to be provided over five years for initiatives designed
to improve quality and safety, and the funding provided for mental
health and palliative care, remain unchanged.
The Commonwealth has also reiterated its commitment to compensate
the States and Territories for any further decline in the level of
private health insurance coverage.
These new agreements are historic in the sense that they address critical
reform priorities such as quality and safety; improve the flexibility
of funding so that we can provide better care in a range of settings
other than acute hospitals; maintain our commitment to mental health
and palliative care; and lay the foundation for long-term infrastructure
needs.
This will lead to further innovation in the way that services are
provided, with greater ability for health care providers to meet individual
needs and provide care in the most appropriate setting, and will strengthen
our ability to meet growing demand while preserving world-class standards
of clinical excellence.
The fine detail of each bilateral agreement will be finalised by Dr
Wooldridge and the State and Territory Health Ministers.
As the Tasmanian Government is in caretaker mode a formal agreement
cannot be signed until after the August 29th election.
6 August 1998