Support for NSW premier’s call to Commonwealth: reinstate sustainable hospital funding

Wednesday, March 25, 2015

The Australian Healthcare and Hospitals Association (AHHA) supports the call made this week by NSW Premier Mike Baird for the Commonwealth government to explain how future hospital funding will be placed on a sustainable footing. This follows the Commonwealth Government’s unilateral withdrawal in last year’s Budget from the long‑term hospital funding arrangements that had been mutually agreed between the Commonwealth, States and Territories.

“The Commonwealth cannot expect the States and Territories to fund the Commonwealth Government’s budget repair by drastically cutting funding to public hospitals by over $50 billion,“ said AHHA Chief Executive Alison Verhoeven.

The Prime Minister and Treasurer point to the Reform of the Tax System and of the Federation as the way to re‑consider financial relations between tiers of government and how critical public services like public hospitals could be funded.

“While reform of our Federation and the tax system are an important dialogue that governments need to have between each other and with the Australian public, we need action on hospital funding now. We need a greater level of certainty on how the increasing pressure on public hospitals is going to be realistically funded,” said Ms Verhoeven.

“The coming May Budget is the opportunity the Commonwealth Government has to undo the damage to sustainable hospital funding caused by last year’s Budget,” said Ms Verhoeven. “As the Government has withdrawn measures from last year’s Budget, they are recognising that ill‑conceived expenditure cuts masquerading as policy reform will not sustainably achieve their budget objectives or the health needs of the Australian public.”

The Government’s White Paper process to Reform the Federation repeatedly makes clear the growing problem of vertical fiscal imbalance – the Commonwealth raising more revenue than required for their responsibilities, and the States and Territories having greater service commitments than they have the capacity to fund. The recently released fourth Intergenerational Report also showed that Commonwealth spending on health is expected to fall from 7.1 per cent to 5.7 per cent of GDP by 2054‑55.

“At our recent Think Tank on Reform of the Federation and Health, it was acknowledged that the funding and determination of health priorities are a shared responsibility across governments,” said Ms Verhoeven. “Changes cannot be made at one level of government without contemplating the impact this will have on the other.The AHHA calls on the Government to use the coming Budget to reinstate appropriate levels of funding for public hospitals – funding that recognises the growing demand for hospital services and the efficiencies that are being achieved as part of national health reforms.”

The AHHA represents Australia’s largest group of health care providers in public hospitals, community and primary health sectors and advocates for universal high quality healthcare to benefit the whole community.

Media enquiries:

Alison Verhoeven, Chief Executive

0403 282 501