HEALTH FUNDING

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (15:05): My question is to the Minister for Health. What percentage of co-contribution will the minister be seeking from the federal health minister at tomorrow's meeting in Sydney? The New South Wales health minister, Reba Meagher, has demanded a co-contribution of 50 per cent from the commonwealth, while in The Australian today the Tasmanian Premier has accused the federal government of blackmail.

The Hon. J.D. HILL (Kaurna—Minister for Health, Minister for the Southern Suburbs, Minister Assisting the Premier in the Arts) (15:05): I am not too sure what the explanation had to do with the question. What the Premier of Tasmania had to say about a matter which is outside my control is beyond me and I am not sure what point it makes. In relation to the broader issue, we are in the process of beginning the negotiations over the next Australian Health Care Agreement.

That is an agreement which is signed every five years. I do thank the member for raising this question because we know that, over the 11½ years that the Liberal government was in power in Canberra, the contribution made to public health in South Australia declined year after year. The reason it declined was that the commonwealth government refused to sign up to a fair indexation arrangement.

From memory, it signed up to an indexation of about 4½ per cent. As everyone in here should know and everyone in South Australia should know, the real indexation rate in health is closer to double that amount. As a result of its below-indexation funding, the states have been forced to put in more money each year. If we are forced to keep putting in money at the present rate—as the Treasurer will tell you—by about 2032 our entire state budget will have to be spent on health.

I make it absolutely plain that it is this government's belief that the commonwealth should fund public health—and that means, in particular, the hospital system—on a fifty-fifty basis. That is certainly the position we took before the federal election and our position has not changed since then. However, I think it would be unreasonable to expect the federal government to address that in its first budget. However, I do—

Members interjecting:

The SPEAKER: Order!

The Hon. J.D. HILL: It took 11½ years for the situation to deteriorate to the state that it is in now. My priority for the next Australian Health Care Agreement is to get agreement over the indexation rate. The most important part of the agreement is to get indexation correct. The last federal government-state government arrangement, as I recall, started off at around 50 per cent but over the course of the agreement it deteriorated. The single most important thing is to get an indexation rate which reflects the actual rate of growth in the cost of the provision of health care services. That is what I want most. A commitment to improving the commonwealth's proportion of funding over time would be welcome as well.

Of course, the commonwealth has already put on the table a $2 billion package which is in addition to the Australian Health Care Agreement, so, in fact, it is increasing the proportion of funds that it is putting into the hospital system in South Australia. The other thing I should point out—and I thank the member for the opportunity to talk about this issue—is that the Health Care Agreement runs for five years. We are very keen for the Health Care Agreement to be signed before the end of the current agreement, which finishes at the end of June, from memory. However, we do not want that to be the end of the reform process.

The commonwealth has also set up a Health Reform Commission which will make recommendations to all Australian governments about where health should go. In particular, of course, we want more flexibility in the way funding is provided so that there are greater opportunities to prevent people from going into our hospital system by investing in more primary health care and more flexible care arrangements. We think it will probably take a year or 1½ years for the health commission to make recommendations, but we do not want to be locked out of that in the Health Care Agreement.

So, my hope is that we can sign up to this agreement with the best kind of deal we can possibly get at the moment and then review it when the health reform commissions come down to look at including some of these broader issues. This is a complex and important matter for South Australia. Our goal is to see the commonwealth government fund on a fair basis, that is, 50 per cent on an ongoing basis, but my priority for the current agreement is to get a proper indexation basis, so that we can plan into the future on a fair basis.