Supply Bill 2014

Second Reading

Adjourned debate on second reading.

(Continued from 21 May 2014.)

Mr PICTON (Kaurna) (17:45): I am very pleased to support this Supply Bill. It is a very important piece of legislation before this parliament which enables all the running of government. In particular, I would like to highlight one aspect of the running of government which is very important, that is, public hospitals in South Australia. We have all had experience with public hospitals in this state, and they do a fantastic array of work. However, this support is being fundamentally undermined at the moment, something that this parliament needs to pay very close attention to and should be very concerned about.

As we saw in last week's federal budget, this Liberal government in Canberra has decided to take an axe to funding to public hospitals. It has made changes to our health arrangements in such a wide array of areas that it is difficult to grasp the enormity of what is at stake. It includes the GP tax, cuts to the PBS, cuts to specialist visits, and cuts to preventive health, but it is the cuts to hospitals which really put at risk so much of what we do as a South Australian government and what this parliament should be taking care of. It really strikes at the heart of the basis of our federation.

In 2011, COAG agreed to some landmark health reform. All the states and territories signed up to that health reform, and what that guaranteed to states and territories was an extra $19.8 billion which would go to public hospitals to 2019-20. Up until 2029-30, it was going to represent an extra $175 billion for our hospitals. The remarkable thing about this health agreement was that for the first time the commonwealth would actually partner with the states in terms of funding hospitals for each service. It would not just be a block grant for services, where there was a cheque for a certain amount that had no correlation with how many people actually needed treatment for cancer or for mental health or any other range of services.

For the first time, we would actually look at how many services were provided and what the cost of those services were, and the commonwealth would provide a share of that funding on that basis. That means that hospital services could grow together with the demand for those services and, as the population ages, there would be more funding for elective surgery, more funding for emergency treatments, as required. Members may have heard Tony Abbott, our Prime Minister, say in the media that there was no guarantee that this agreement would be continued in the future, in the out years. Even as late as this week, he said to David Penberthy on FIVEaa:

…we also said David, before the election, that yes we would honour the Rudd/Gillard deals on schools and hospitals for the first four years but we weren't going to be bound in the out years…

So, he said, 'Look, for four years we are going to commit to this but not in the out years.' Well, that is complete rubbish. Before the election the Liberal Party, in their document 'The Coalition's policy to support Australia's health system', explicitly said that it would:

…support the transition to the Commonwealth providing 50 per cent growth funding of the efficient price of hospital services as proposed.

It even boasted:

But only the Coalition has the economic record to be able to deliver.

Not only did they promise that they would match the agreement that was set out and agreed between the commonwealth and all the states but they boasted that they would be the ones who would be able to deliver.

What we have now seen is that agreement being completely kyboshed, thrown out within months of them coming to government. I think that really strikes at the core of the ability of the commonwealth and the states to strike agreements and to have confidence that each other will continue to meet their side of the agreement in the future.

In the past 20 or 30 years, there has always been a process with COAG of the states and commonwealth getting together. There has been give and take and argy-bargy, but at the end of the day there has been consensus agreements reached between the commonwealth and the states, between Labor and Liberal. What has now happened is you have the commonwealth unilaterally tearing up those agreements. They did not say, 'Let's go back to COAG; let's try and renegotiate a new agreement,' they just said, 'We will rip up this agreement and we will replace it with absolutely nothing, and there is no extra funding.' Essentially, the commonwealth has taken the approach that issues like the future of public hospitals are no longer issues of national importance that should be agreed through COAG, and they are no longer things that the commonwealth should be trying to assist with.

There were also agreements in terms of extra subacute beds and improvements for emergency departments and elective surgery, which had targets for states to reach, and if those states reached those targets then there was reward funding available for the states. It was an incentive that the commonwealth had put in place to say to the states, 'We want to see improvements in public hospitals.' The states agreed to that and took a wide range of improvements setting up a number of programs to improve public hospital performance. We have seen in South Australia huge improvements in elective surgery waiting times and also in emergency department waiting times. In fact, we are one of the best performing states at the moment.

But now, the federal Liberal government has said the reward funding that would be due to come to our state is going to be ripped up and made to disappear. I think that also adds to the ability for states to say, 'Well, how can we ever trust the commonwealth again?' If they are going to have such an agreement, we do all the hard work to meet the targets, and then the reward funding that was meant to come to the states is not there anymore. How can that trust continue?

Funding the running of a hospital is not like funding the running of a museum, a gallery or an office. With a static service, you can simply increase the payments on the basis of inflation, but with hospitals you have got hugely fluid costs that are determined on the number of people as patients who come through the door for services.

As everyone, including Tony Abbott, should know, the number of people requiring treatment is going to increase rapidly over coming years. As those extra patients come into emergency departments, there is going to be no extra funding from the commonwealth to cover those patients. They are only covering the patients that are there at the moment and adjusting that for inflation. There is not going to be any extra funding to account for more and more patients, and more patients who need extra services as the population gets older.

There is no shortage of expert advice on the future challenges for our health system and what needs to be done to address them. Nationally, we had the National Health and Hospitals Reform Commission give us a report, or a blueprint, on what needed to be done to fix our health system, and in South Australia we had a generational health review that did a similar thing. The overriding focus of both those reports is that governments needed to invest more money in preventing illness and treating illness early to prevent expensive and invasive hospital visits and procedures.

What we have seen in this budget is that not only is the commonwealth shirking its responsibility in terms of primary care and preventative health, they are cutting preventative health programs, both that they deliver and the states deliver. They are also cutting primary health care through Medicare Locals and through the GP tax; we have already seen GP clinics say that patients are staying away from getting the treatment that they need because they are worried about the impact of this tax, which has not even come into existence yet.

All of that is going to place extra pressure on hospitals, and at the same time, the state has less ability to fund the extra hospital presentations, so there is going to be more pressure on us to not fund primary health care and preventative health care programs as well. So we see a complete reversal of all the expert advice that the focus of the system should be on the primary and preventative end, and the state is going to have to focus what scarce resources we have on our acute system—on the last line of defence in emergency departments.

Under this agreement between the commonwealth and the states that the Abbott government has scrapped there was protection for rural and regional hospitals built into the agreement. That was that these hospitals would receive block funding to account for their low volumes that they would not fare by themselves well under activity-based funding alone. That means that while the busy metropolitan hospitals were getting funded on the basis of the number of patients that were coming in, regional hospitals could be sure that their funding would be secure in block-funded grants.

Because the volume funding for the larger hospitals is being wound back and scrapped by the Abbott government, that is going to place additional pressure on regional hospitals that have a low volume because the state is going to have to deal with all the patients that are coming into the larger, metropolitan hospitals, and regional hospitals are going to be squeezed, inevitably, out of the arrangement. I note the presence in the chamber of the Minister for Regional Affairs and I know he will be concerned as well about the impact that this will have on hospitals in his electorate if these cuts come through from Canberra. So we are going to see a massive squeeze there.

The cuts contained in this federal budget will hit South Australian public hospitals very hard. At the moment we have short waiting times in emergency treatment and elective surgery. The ability for us to continue those short waiting times is going to be very difficult with this funding cut. Anybody who you can talk to in the running of public hospitals will tell you that the easiest way to turn off the tap of funding is to increase waiting lists. You do not schedule as many elective surgery sessions as you otherwise would, and you force people into long waiting lists. For instance, we saw when the commonwealth under the Howard government cut the commonwealth dental health scheme that waiting lists in South Australia ballooned out to 49 months, a massive period of time for somebody to wait to get their teeth checked, and they are taking the same approach now with not caring about what waiting lists are going to be like in public hospitals.

The Hon. G.G. Brock: They might be dead by then.

Mr PICTON: The minister says he might be dead by then. I definitely do not think you would be.

The Hon. G.G. Brock interjecting:

Mr PICTON: Oh, other people would be—that's right. If you need cancer treatment or if you need some sort of very urgent care, it needs to be within days. You cannot wait months, you cannot wait years. I think now our waiting lists for urgent elective surgery cases on average is eleven days in South Australia, which I think is an excellent achievement by our health system, but the ability for us to keep that low waiting time with this funding cut is going to be very difficult to maintain, and the cuts are huge in terms of over $600 million impact to our hospitals over four years.

We have heard the Prime Minister and the Treasurer say that it is all in the out years, but that is not correct because there is a $55 million impact in this coming financial year starting 1 July. The next year after that it is $112 million and the year after that $168 million, rising to 2017-18 when the impact will be $269 million, which is a massive impact for our hospital system, and it will only grow and grow after that.

We know that it will hit people who are poorest the hardest, because people who are poor cannot afford private health insurance, they cannot afford to get the best specialist doctors to treat them, and they cannot afford to skip the public waiting list lines that will be necessitated because of this cut. We have seen with some of the people on the other side of this house that none of them have come out to criticise the Abbott budget cuts to our hospitals, and they seem to be trying to promote this argument, and we are starting to see how they are going to respond to the budget cuts.

Mr GARDNER: Point of order.

The SPEAKER: Point of order from the member for Morialta.

Mr GARDNER: I draw your attention to the state of the house.

A quorum having been formed:

Mr PICTON: I seek leave to continue my remarks.

Leave granted; debate adjourned.

At 18:00 the house adjourned until Tuesday 3 June 2014 at 11:00.