Health Care (Governance) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 4 July 2018.)

The Hon. I. PNEVMATIKOS (11:13): I rise today out of concern for the future of our healthcare system under a Marshall Liberal government, in particular the impact that the Health Care (Governance) Amendment Bill 2018 will have on our healthcare system. I safely assume that we all agree that for us to have a good health system we need to focus on quality of care and services, safety for patients and staff, oversight and accountability, and maintenance and continuity of programs and services.

We need to strive to ensure that patients in a regional hospital are supported to have the same standards of quality and safety as those in the city. We need to use our best endeavours to ensure that we address the number of people presenting at emergency departments in a structural sense rather than employing temporary bandaid measures as problems arise and reach crisis levels. In the same context, we also need to ensure that there is a fair spread of beds and places for elderly Australians who require treatment and medical assistance.

We have already seen the Liberal counterpart, the federal government, cut $2.1 billion from hospitals. What further implications will we see if the state government devolves the health system, or is it more of the same—the state Liberal government following in the shadow of the federal Liberal government? By lowering financial controls and oversight, how will we be sure there is continuity within hospitals, not just in the city but in our regions as well? Who will step in if the quality of services diminishes, for example, say, at the Riverland General Hospital, and what measures are in place to do so?

What if the relevant board is unable to address the issue because their limited funding is preventing them from being able to action the matter? What happens then? What will the government do? At the end of the day you can have a board deciding all manner of issues, but with no control in terms of budget and spending, it is a recipe for dysfunction and disaster. Or is it the case that the government has chosen not to do anything, absolve all responsibility and shift blame to a third party?

As it stands, we already know that the health system is set to lose $10 million of taxpayers' money to establish a web of boards to absolve that responsibility. That is $10 million that could have been spent on providing proper staffing levels and appropriate services in our state health system, rather than adding layers of bureaucracy to an already overburdened healthcare system. Illness and injury does not care where you live or who it strikes; we need to ensure that patients never have to worry about where to go to get treatment. It is about being fair. It is unfair to risk the wellbeing of patients based on the current plans set by the government.

On 7 June, the Minister for Health and Wellbeing spoke on this bill. He stated that the South Australian health system is too large and too complex for it to be optimally operated with all the authority and accountability resting on one person, that being the chief executive of the Department for Health and Wellbeing. I repeat: too large and too complex. If the health system appears to be too large and too complex, maybe the government should reconsider its decision to cut consultation with stakeholders on this matter.

Clearly, the government needs all the help and advice it can get. Decentralising health care will lead to duplication, less coordination and encourage an imbalance of quality, services and programs between hospitals. Our health system is too important to risk fragmentation. We agree that we need transparency for an effective, safe and quality health system. As it stands, we are still waiting for the government to explain how the system will be organised in order to assess its effectiveness and, of course, transparency.

I welcome the government coming to the floor and answering all the fundamental questions that remain unanswered. However, if that remains too large and too complex, I suggest that the government wait and take into consideration any amendments introduced by the opposition to ensure that our health system's quality and safety standards continue to grow for all public hospitals.

The Hon. C.M. SCRIVEN (11:18): I am sure it is agreed by all in this chamber that one of the top priorities of any government is to provide effective and accessible health care for the people we are elected to represent. This area of government affects each and every person in this state, young or old. The health of the next generations are impacted by the health systems of today, starting from the health of potential parents as they prepare for pregnancy, to antenatal and postnatal care, through childhood health, adult health services, chronic disease treatment, preventative health, screening services and more, right through until each of us is facing our last days here on earth, where end of life becomes relevant to each one of us and our families.

It is clearly a complex system. We have federal and state governments responsible for different aspects of our health care and yet as individuals, as people, all of those items interact. We need to ensure that we have a system that works well together across our state, across our nation and in each individual regional area.

Coming from the Limestone Coast as I do, that last point is particularly relevant. We want to have local input into health decisions and the systems that we encounter. However, the question is: does this bill assist with that or does it actually add a level of complexity that will not help positive health outcomes for ourselves, our families, our friends and our neighbours?

The concern is that the proposal in this bill will in fact lead to fragmentation, that it will lower the quality of safety standards, it will lower the financial controls and it will lower the financial oversight. Of more concern again is that the minister appears to be trying to avoid government responsibility for the system. We need to have a system where it is clear who has accountability. By talking about hospital boards and regional boards, where does the responsibility lie? While it is commendable to have local input into decisions, it is also essential that we have a coherent system that works together for the benefit of everyone in the state.

When the Health Care Bill was passed in 2007, it was in response to a number of issues with hospital boards at the time across the state. Some of those issues were safety problems, quality problems, contracting issues and clinical planning issues. Additionally, the governance changes in this bill will undoubtedly come at a huge financial cost. The board fees are likely to be at least $2.1 million per annum, on the advice that we have received. The sum of $2.1  million will go a long way towards providing front-line services to people. Indeed, people in the Mount Gambier region or Naracoorte, for example, would be delighted to have $2.1 million per annum in additional funds go into their hospitals and health systems. Instead, that amount of money will be going into hospital boards, with very unclear outcomes that we can expect to see from it.

In addition to those costs will be costs for recruitment, for advertising, for administration and so on. Of particular concern is the lack of detail in this bill. It is extremely light on detail. In the briefing that the opposition received on this bill, it became very clear that the government still has not worked out many fundamental questions of how they want the system to be organised. It is this kind of rushing through which does not allow suitable attention to detail, which is a real risk in this bill.

The government has apparently engaged in no consultation with stakeholders. The promise during the election to consult on country health boundaries after the election does not appear to have come to fruition. The concerns that people have raised with me is that the government is just focused on moving people around rather than coming up with a proper plan, a cohesive plan for our health system.

By decentralising overall responsibility, who is accountable? The potential outcome of this is that the minister can deflect blame from himself and from his chief executive when issues do occur, as issues always do occur in health. At the same time, it is potentially creating more duplication and far less coordination.

If these boards are going to have such a high level of responsibility, if essentially they will be accountable instead of the minister and instead of the department's chief executive, then these boards must be transparent and they must be accountable. We do not see that in the legislation in front of us. The opposition would like to see much more transparency and accountability in this bill. A series of amendments will be moved to that effect.

Labor committed to a $140 million cash injection over the next 10 years to upgrade country public hospitals and aged-care infrastructure with the goal of ensuring high-quality services can continue to be provided to rural and regional communities. We would like the focus to be on improving services rather than deflecting accountability from the minister and from the chief executive. We look forward to discussions in committee on the proposed amendments and hope to have support.

The Hon. K.J. MAHER (Leader of the Opposition) (11:24): I rise today as the lead speaker for the opposition on this bill in the Legislative Council, and indicate that the opposition will not be supporting this bill. This bill seeks to create 10 health boards across the state to manage the running of our hospitals, adding cost, complexity, duplication and risk.

South Australians are well served by the doctors, nurses, allied health professionals and other staff who work hard in our hospitals and health services every day. They deserve a government that will be willing to put resources into their hands to care for patients, not into setting up new bureaucracies that have the potential to make life more difficult and not solve any of the issues that are important to them.

We are deeply concerned that this bill will lead to a fragmented and divided health system, with the lowering of quality and safety standards and central financial controls and a lack of focus and coordination over our key statewide health services. It also smacks of the health minister trying to avoid responsibility for the system he represents and to deflect that ultimate responsibility elsewhere.

To be clear, the government and the minister have been elected to government saying very clearly that they are going to fix issues they see are wrong in the health system. That is a promise they have made, yet we have not seen any evidence that they are even close to meeting that promise. There is no plan for the health system from the new government. There have been no investments made in the health system since they took office. The small promises that the government did make—to reopen the Repat and establish a HDU at the Modbury Hospital—we have seen, through answers in this chamber, that the government is all at sea in trying to implement them.

In fact, the government had to admit to the council that their very own health department has said that their policy for a stand-alone HDU is going to cause serious clinical risk for patients. The minister was so concerned about it that just this week he made clarifications to avoid misleading this chamber in relation to the clinical safety concerns that his own department has for a stand-alone HDU at Modbury.

On the big questions, like implementing a winter demand plan, the minister has been caught out of his depth. He did not release a plan until a full third of the way through winter, when ramping had already reached huge proportions right across our health system. With no plan for hospitals and no new investment in hospitals, it is inconceivable that creating new levels of bureaucracies and diverting millions and millions of dollars of funding from patient care into boardrooms will do anything except make the jobs of doctors, nurses and all of the others who work in our hospitals harder.

Before going into further detail on specific concerns about the bill itself, I am going to address concerns we have about the lack of consultation that the government has chosen to undertake on this bill. The opposition went into a briefing on this bill expecting to hear about the large amount of consultation that had taken place prior to the introduction of this bill. Why did we go in expecting this, Mr President? Because the Liberals specifically promised in their election commitments to consult on the bill.

In one of their 2018 election documents, 'Engaging communities and clinicians for better health', the liberals committed to:

…consult on the boundaries of up to six regional health networks as a first step to establish their boards of management.

When we asked in our briefing if the minister had fulfilled his commitments he seemed somewhat confused by the question and said that he would send us proof that he had done such consultation, yet all we have been provided with to date is a short letter sent out in December 2017 to health advisory councils which fails to meet the government's commitment to consultation following the election. It is another broken promise from this government, and we are still waiting for the government to provide us with a list of stakeholders consulted on the bill following its introduction, or any plans to consult with stakeholders on this bill.

Embarrassingly, for the government, we have heard from many stakeholders that our request for feedback on this bill is the first time they have ever heard about this bill, and the government has refused to release whatever documents for consultation it may or may not have received. In relation to consultation, here is what the AMA said on a previous consultation on the bill:

In considering our response to this new Bill, the AMA(SA) has consulted its records on the Health Care Act 2008. The draft bill for this Act [that is the 2008 bill] was released for public consultation on 2 July 2007. The then Minister for Health, John Hill, presented it to the AMA(SA) Executive Committee on the Bill on 14 August 2007 in advance of its introduction in Parliament on 27 September 2007…

So there is a model for consultation that has previously worked, and we just do not know why this new government, and particularly this minister, refuses to consult, as has happened in the past. The Australian Psychological Society says:

The APS is concerned about the absence of stakeholder consultation for the proposed Healthcare (Governance) Amendment Bill 2018 for South Australia. In particular there has been an insufficient amount of time provided for stakeholders to consider and comment on the broader impacts for health consumers in SA.

This is especially fraught due to the absence of information detailing the issues or analysis, including an economic analysis, comparing the new model with the current system of governance.

This absolute and complete failure to consult with clinicians and key health organisations is unacceptable when we are looking at a bill that fundamentally seeks to change the entire governance structure of our health system.

The opposition is concerned about the lack of proper strategy and implementation plan for this new system of governance. What emerged in our briefing on this bill was that the government has removed the usual limitation of enacting a bill within two years of its passing. It became clear that this government will likely take more than two years to put this system into place. Naturally, we asked why, and it turns out there has been no planning for this legislation to take effect.

We have legislation put before us that has no planning whatsoever behind it. In the briefing, almost every question put to the minister about how this reform will work practically was answered with, 'Oh, it's a stage 2 consideration'. In effect, the government has no idea of what they are doing and what will come after this. There are still so many fundamental questions remaining in terms of how the government wants this new governance structure to operate.

In an even more amazing twist, in the briefing it was fully acknowledged that, under this so-called stage 2, it is likely that an entirely new health bill will be put to parliament late this year or early next year before the boards actually commence. We are being asked to pass legislation with the knowledge that this probably is not what is going to happen. It is an insult to this chamber and an insult to the healthcare sector and stakeholders in this area.

It is bizarre that the government is looking to introduce this and then replace it all even before it comes into operation. It is treating us in this chamber with contempt and disrespect by asking us to pass a bill that they have no intention of operating. It remains unclear as to how the July 2018 start date for board chairs interacts with the potential passage of this legislation. Surely, there needs to be a transitional arrangement in place, and presumably contained within the legislation, but we have no detail on that. We will certainly be going through that in some detail in the committee stage.

In relation to costs of this new system, we are concerned with the excessive cost health boards will have. We are not convinced it is good use of money, and it will take tens of millions of dollars from patient care to salaries for board members and this bureaucracy. We are concerned about the lack of detail we have received on costs when it comes to these changes. We have asked the minister for costings but we have had very little in response.

Undoubtedly, this bill will substantially increase the cost of the health system. For instance, the board remuneration fees from the figures we were provided are likely to come out at well over $10 million from the forward estimates. Then there is recruitment, advertising, setting up, administration and everything else the boards need for their operation. And that is before we reach the largest cost, the cost associated with developing and duplicating central functions of the health systems as they stand, including budgeting, human resources, administrative staff and operating systems. Duplicating all of this across the system is likely to be a substantial hit to the budget bottom line, all of which will take much-needed funds from patient care and divert them to bureaucracy and duplication.

It is worth considering the history of where we were before we arrived at this bill. In considering a bill on the creation of boards, it is useful to consider why the former government abolished health boards just a decade ago. This is something that the current government clearly failed to do before pushing ahead with this bill. When the Health Care Bill was passed in 2007, it followed a multitude of issues with various hospital boards across the state, including safety and quality problems, contracting issues and difficulties surrounding clinical planning. All the evidence pointed to the fact that we needed to streamline the governance of health, so we listened to the evidence as a government back in 2007 and acted accordingly. This government has decided to tear apart that system in the absence of any proper evidence to do so.

In terms of fragmentation of statewide governance and services, we think the government is focused on shuffling bureaucrats around rather than on coming up with a comprehensive plan for a health system, which is what they need to focus on. Just like the minister could not be bothered coming up with a winter demand plan until a third of the way through winter, we see it again with this plan—not having a plan at all that goes with what they are talking about.

By decentralising overall responsibility in the health system the government is attempting to deflect blame away from the minister while at the same time creating more duplication and less coordination across the system. It means the devolution of financial control as well, and this has caused problems when health boards were last in existence.

The opposition has stakeholders coming to us with many concerns about the issues this will raise for statewide services. For instance, the AMA raised concerns regarding the impact of devolution on regional South Australia:

The AMA(SA) would stress that there should be no loss of funding/resources for regional health/clinical services due to costs associated with establishing the boards. We also seek to know what residual central governance may remain for regional SA. Rural medical workforce management is one significant area of concern. The AMA(SA) favours certain functions of statewide significance to remain centrally managed.

How the current statewide service will work in this new structure is one of the myriad of concerns the government has pushed aside, saying, 'Don't worry about it, just ignore it, that'll be stage 2, and we may just change the whole legislation anyway.' There is also concern from stakeholders that the devolution of authority will naturally lead to a lack of broader policy focus on those services that cross different board boundaries, and first and foremost amongst those is mental health.

The opposition is also unsatisfied with the lack of accountability and transparency surrounding these boards. If the government wants to create boards with such high levels of responsibility there needs to be a similar transparent and accountable mechanism, which we certainly cannot see in the legislation before us. If the government is serious about transparency there are lots of ways these boards could be more transparent, and this is something we intend to address in the committee stage with opposition amendments.

A related point is one of the expertise of these boards. We learned that in Victoria there is a significant review underway on clinical governance, looking at boards needing to be better educated to make the decisions they are required to make. We want to know what will be in place to educate our boards and ensure they are making the soundest possible decisions.

A final high-level concern to flag ahead of the committee stage is the high level of confusion and lack of clarity surrounding accountability and hierarchy between the chief executive of SA Health, the boards and local health network chief executives. There is an issue of local health network chief executives being accountable to both the SA Health chief executive and also the relevant board. Undoubtedly, this will create confusion and conflict when things inevitably go wrong. It is unclear what would happen in the event that there is a disagreement between those various parties regarding a local service level agreement.

Once again, in the briefing we were told that this was to be sorted. That is a completely unsatisfactory answer when a government, a minister, is asking a chamber of the parliament to consider the passage of legislation that will involve fundamental changes and have fundamental effects on something as important as the health system. It remains unclear whether boards must wait for the chief executive sign-off on choosing a local health network chief executive or whether they simply must consult the chief executive and can ignore any disagreement upon the consultation. I am sure that is something the minister can clear up very easily.

The ANMF raises similar concerns in their submission:

The chief executive officer for a hospital board is then in an invidious position that they are appointed by the board only after approval by the CE of the department and they are then subject to direction of the CE but accountable to the board and also subject to their direction. This conflicted position should, in our view, be clarified with single stream accountability.

If that sounds confusing, it is because it is. That is the way the legislation is currently crafted. The AMA had this to say:

The function of the boards is of interest, including expected governance and strategy functions, as well as compliance with directions from the minister and CE of the Department for Health.

Would this structure mean 'all care and not enough responsibility' for the Chief Executive of SA Health? Does it provide too much distance of the minister from the activities at a hospital level?

Does the minister's power to appoint/dismiss the chairs and members harm the independence of the board?

These are very reasonable questions from the AMA that the minister has an obligation to answer before we consider the bill further. And we still have not heard back from the government in response to questions raised during the briefings as to whether or not boards are eligible to review decisions to appoint advisors under the legislation, which I am sure the minister will clear up in his second reading response.

In summary, this is a bill that will take funding away from patient care and shift it into bureaucracy and boardrooms. It will lead to the same problems that we have seen before in the complexity, duplication and the concerns in the controls of finances, safety and quality. The government has not thought through many of the very basic questions about how this system will operate and it is treating the parliament with contempt by rushing in a bill that, by their own admission, they are not sure is satisfactory and may well scrap entirely and replace with a new bill before the end of the year.

This goes to the reason why the bill is before us. It was a commitment for their 100 days and come hell or high water the government was going to put something in regardless of the lack of consultation and the lack of ability for any clear way that the bill will work. They have produced the bill in a way that does not give parliament confidence of the transparency and accountability of these boards, boards that will be in charge of some of the largest sums of taxpayers' money of any government boards in this state.

There has been precious little to no consultation with stakeholders and we have been presented with an extreme lack of detail on the practical outcomes of this legislation. This is a bad bill that will make our health system weaker, and I urge members to oppose the bill or, at the very least, to support some of the amendments that the opposition is putting up that will improve what is a fundamentally flawed bill.

The Hon. F. PANGALLO (11:42): I rise to speak in support of the second reading of the Health Care (Governance) Amendment Bill 2018. The bill represents the first stage of changes to our health system, as outlined by the government in its pre-election commitments. It signals a first step in the decentralisation of the public health system through the establishment of metropolitan and regional governing boards.

This is a significant change, given the former Labor government had abolished governing boards 10 years ago on the pathway to instituting the much-maligned Transforming Health, which continues to produce poor outcomes for patient care in the state's public health system. Transforming Health has become more about transferring health out of our public hospital system, leaving behind a cumbersome and bureaucratic framework of care that has done nothing to meet the needs of patients and leaving in its wake long patient queues for treatment.

The bill further allows for our local health networks to be governed by their own local boards and allows the governing board chairs to be appointed by 31 July 2018 in an advisory capacity and in full capacity from 1 July 2019. The expressions of interest closed a few days ago, on 29 June. These overambitious time lines concern me, as I would have liked to have properly considered the number of amendments which the opposition only filed on Tuesday of this week. The bill itself was only introduced on 7 June.

The bill makes significant changes to the performance and accountability of our hospitals by installing the governing boards, and we need to get it right. The second stage is to establish a new governance and accountability framework for the public health system, which will incorporate this legislation into new legislation to be introduced, we are told, later this year or early next year.

The minister has stated the proposed legislation for the second stage will allow for the consultation this bill was not afforded this time round. Indeed, the minister has provided assurances that the next bill, which represents the second stage in the process, due at the end of this year or early next year, which will replace the existing Health Care Act 2008, will have a robust and lengthy consultation process. I trust that the minister is prepared to give that undertaking in the council today.

I look forward to hearing from the minister in terms of him providing reasons why the Labor amendments should not be supported, given that prima facie many of the amendments make sense. I would also like the minister to address the concerns and feedback raised by stakeholders, including the AMA (SA), the Australian Nursing and Midwifery Federation (SA Branch) and the Health Consumers Alliance of SA in relation to representation on boards and consumer engagement in correspondence which was tabled by Hon. Tammy Franks on Tuesday.

There is no doubt the system needs to change. The idea of SA Health essentially adopting a managerial model, with no doctors being appointed to chief executive positions within the Department for Health or the local health networks, was ill-advised. South Australians are paying the cost for those decisions—one of the issues, I believe, that had a huge impact on the result of the state election.

SA Health has effectively excluded clinicians from critical decision-making, preferring to spend vast amounts of taxpayers' money on employing bean counters from the likes of Deloitte, McKinsey and KPMG to carry out service redesign work, which has only served to create controversy and division and left us with a crippled and gravely ill public health system.

The best health systems in the world have medical expertise at the helm. I echo the sentiments of the Australian Medical Association (SA) that:

...the lack of medical leadership and authority at the highest levels of SA Health has significantly contributed to what we see at the moment—budget deficits, ambulance ramping, e-health issues, morale issues, a lack of innovation, poor clinical analytics and a lack of clinical engagement: an issue explicitly acknowledged by the current Government—all resulting in a health system that is significantly under-performing, in our view.

It is unfathomable that in a First World state such as ours the public hospital system lost the equivalent of 70 hours of ambulance time, or effectively nine ambulances off the road, between 11am and 7pm on one day last week. Ramping serves only to monopolise ambulance availability by forcing crews to care for patients in car parks while hospital EDs are full. The critical job of ambulance crews is to deliver patients to EDs so they can be appropriately triaged and assisted by medical teams, not paramedics. Ambulances stuck in car parks in a conga line, waiting, waiting, waiting, will inevitably lead to avoidable deaths.

I spoke in this place earlier in the week about the tragic death of 18-year-old woman Kiera Moreldo. On the cusp of so much possibility for her future, she died in her sleep two weeks ago from a preventable genetic heart condition while being forced to wait to see a cardiac specialist at the end of September for an appointment. This simply should not have happened, and the delay has only compounded her family's grief.

A constituent recently contacted me after he was advised by Flinders Vision that the waiting list at the Flinders Medical Centre for public ophthalmic patients is between one and two years. They did ring him back to tell him they had found a private ophthalmologist who was willing to do each eye for $2,350 via the private health system. The amount of $4,700 is a vast sum of money for most pensioners to suddenly find. This pensioner is in desperate need of cataract surgery, and while he waits he is going blind and can no longer drive and is becoming more dependent on his wife to care for him. This is completely unacceptable.

Contrast this with the situation in Nepal, where skilled ophthalmologist and co-founder of the Himalayan Cataract Project Dr Sanduk Ruit can perform a cataract surgery in under five minutes, having restored eyesight to over 100,000 people in Africa and Asia with his small incision cataract surgery without the benefit of the world-class equipment doctors in our health system have at their disposal.

Dr Ruit performs dozens of flawless cataract operations at eye camps over the course of a 12-hour day. His mission is to bring back eyesight to anyone who needs it, regardless of his or her ability to pay, and to do so with the pre and post-operative care that rivals the highest quality health care throughout the world. Dr Ruit was trained by none other than the renowned Dr Fred Hollows, one of our own, whose legacy continues to make a profound difference in the lives of thousands across the globe. Perhaps this government could invite Dr Ruit to South Australia to impart his knowledge here. I remain very concerned about the rushed nature of this proposed legislation, but I am prepared to proceed today.

The Hon. S.G. WADE (Minister for Health and Wellbeing) (11:50): I would like to thank honourable members for their contribution to the debate on this bill. Board governance of public health services was a central pillar of the health policies that the Marshall Liberal government took to the election. Boards are fundamentally about devolving control to deal with the corrosive centralism and bureaucracy that developed under the former Labor government. In establishing governing boards, we want to ensure that clinicians and communities have enhanced opportunities to be engaged in making decisions about their own health services.

The opposition has made its opposition to this bill clear. The broad community support for the health board governance is a repudiation of the opposition's administration of health in the last parliament. Let us remember that it was Labor that abolished the boards in 2008, it is Labor that has presided over centralisation of the health system over the last decade, and it was Labor that opposed our policy in the last election.

Labor's opposition to this bill is demonstrated in particular by its failed attempt to establish a privileges committee and by its statements in the chamber today. I see some of the opposition amendments are muddle-headed and some of them are premature, but some of them are, in my view, an attempt to hamstring the new governance arrangements. Some of them the government will support.

I would like to respond to some comments about the time frames for the bill. It is important to understand the process proposed. The legislation here is about providing the legislative base for boards to be established. The government hopes that this legislation will pass the parliament by late July to enable board chairs to be appointed. Later in the year or early next year, the government will seek parliament's support for a new bill, likely to be a repeal bill, which will legislate the full governance and accountability framework. Parliament will have an opportunity to revisit all the issues in this bill later in the year. Of course, I would want parliament be comfortable with this bill, but members can be assured that they will have the opportunity to revisit the issues in this bill when the second bill is presented.

The only area where I suggest the government would be reluctant to amend the second bill is on the composition and eligibility of the board. I do not think it is fair on applicants and future board members to have the goalposts moved after their appointment. I certainly would not support an amendment which would disqualify a duly appointed board member because of a subsequent legislative amendment.

In terms of time frames, the tabling of the bill was a 100-day commitment, but in any event it would have needed to be an early priority of the government. We need to get clarity on the model before we go to appointment. We want to form the boards as early as possible so that they can be involved in the induction and training. If we had waited until the completion of the full framework, both the composition of the boards and the governance and accountability framework, it would not have been possible to appoint the board members until late this year or early next year. The capacity for the boards to be involved in induction and training would have been significantly reduced.

As I outlined in my second reading explanation and expressions of interest process, that has been undertaken in parallel with this bill before the parliament. The goal is to ensure that appointments can be made under the act as soon as the bill is passed by parliament. In this context I urge members not to support amendments that relate to the broader governance and accountability framework. The amendments can feed into the consultation on the broader bill, but the government does not want to pre-empt that consultation by putting down a position at this stage.

In a formal sense, the bill before the parliament moves responsibility for the administration of public hospitals and health services from the chief executive of the Department for Health and Wellbeing to governing boards. Since the introduction of the bill into parliament, I have met with presiding members of the country health advisory councils to discuss the changes, to many country people and to local regional media.

It would be no surprise to members that the decision to return to local boards has been welcomed by those living in regional South Australia. They have been neglected under 16 years of Labor, and they see the loss of boards as a key factor in their decline. Their feelings are best summed up in the editorial from the Port Lincoln Times of 13 June 2018, which stated:

When Country Health SA took over the running of local regional hospitals, hospital boards were done away with leaving local communities without the local voice in health they once had.

In the years since hospital boards were abolished, hospital auxiliaries and health advisory councils have tried to do what they can to make sure money donated locally is spent on local health services and equipment but they have never had the power to make decisions.

They lack potency and authority, and many would argue it has cost local hospitals and health services dearly.

The foundation of this bill is unorthodox corporate governance framework, with skills-based boards. Board members are appointed for the skills they bring to the task of running the organisation, not to represent one or other of the stakeholders of the organisation.

Boards are not meant to function like parliaments, to represent constituents, they are meant to function as a team, with the single purpose of delivering the best health services for the population in their network. If individual directors regard themselves as representatives of a particular group, this can give rise to the interests of that group overwhelming the broader interest.

Directors must act in the interests of the whole organisation and apply an independent mind to the board's work and decision-making. To be effective, a board needs the right group of people with an appropriate mix of skills, knowledge and experience that fits with the organisation's objectives and strategic goals.

The government will oppose amendments that undermine the skills-based nature of the board. To do otherwise would be to weaken the board's capacity to deliver on quality and safe health services. The bill outlines an appropriate skills mix to oversee the operations of the local health network.

The bill requires that two members on the board are to be health professionals. In the context of the comments I just made, it is important to recognise that health professionals are not there to represent health professionals, they are there to bring their skills to the board table, whether they be in health management, clinical governance, health policy, health matters generally, and so on. They are not there to represent health professionals generally, or their own profession specifically. This is a key reason the government will oppose the amendments that seek to specify the health professional background of members.

Boards are also likely to have key health professional leaders from their local health network attend board meetings, whether ongoing or on an as needed basis. However, it is good practice that, to avoid conflicts of interest, board members should not be employees of their own LHN.

As part of communications across the system about the introduction of governing boards, there have been a number of questions asked about the eligibility requirements. The government will be moving a minor technical amendment that it hopes will provide clarity. However, it does not detract from the government's position that persons providing services in local health networks will not be eligible for appointment to the governing board for that local health network. We want to ensure that the governing boards are able to operate without compromising probity.

I refer members to the review of hospital governance practices from Victoria as a result of a number of perinatal deaths that occurred in the Djerriwarrh Health Services during 2013 and 2014. A review into the health service found that many of the deaths were avoidable or potentially avoidable, with many of the deaths involving common and recurring deficiencies in care. The review identified the health service had inadequate clinical governance and was not monitoring and responding to adverse clinical outcomes in a timely manner. This failure was across the system not only in terms of what happened at the health service but also that the health service board did not discharge their duty to ensure that care is safe and continuously improving.

One of the factors from the review into Djerriwarrh Health Services was the need to have independent clinicians on the board who can assist the board in understanding clinical issues rather than potentially impeding the board. In South Australia, we can learn from these failures and ensure they are not repeated. The board composition provision supports the board having the skills and expertise in clinical governance that it will need. Given the experience at Djerriwarrh, I do not see the need to change the policy position to exclude clinicians working at a local health network from being appointed to the governing board for that local health network.

I turn now to respond to stakeholder input. I met with the chair and chief executive of the Health Consumers Alliance, who have provided me with comments on the bill. The comments were tabled in this chamber by the Hon. Tammy Franks on Tuesday. Whilst they are supportive of the intention of the bill, they have sought the inclusion of consumers on the boards and compliance with the National Safety and Quality Health Service Standards, which call for greater involvement of consumers in governance. The bill does not exclude the appointment of consumers to governing boards. There is no explicit requirement for consumers to be appointed to a board. However, a consumer could be appointed should their experience and expertise be perceived to support the board in the effective performance of its duties.

Beyond the board, the model is based on the presumption that consumers will play an important role in the governance of the local health network. Boards will be required to develop a consumer and community engagement strategy to receive input about health services provided by the local health network. Hospital boards will be required to report annually on this engagement strategy. As members will note, the requirements for the engagement strategy may be prescribed by regulation. It may well be that the strategy recognises policies such as the National Safety and Quality Health Service Standards to ensure that consumers are appropriately engaged.

I note the Health Consumers Alliance of South Australia's comments about health services needing to be safe as well as efficient and accessible. I refer members to the role of the board, which is to ensure effective clinical governance frameworks are established. This encompasses all aspects, including the governance arrangements to manage patient safety and quality risks, care provided by health professionals, qualifications and skills of managers and the clinical workforce to provide safe and high-quality health care, management of incidents and complaints, and patient rights and engagement.

As I mentioned earlier, there will be further work on the governance and accountability framework for the public health system over the coming months that will lead to further legislative amendments. These amendments will take a broader focus on the governance of the health system. There will be consultation with stakeholders and the community. The government will take on board the comments made as part of this bill in the next stage of legislative amendments.

My department has also consulted with the unions that represent the employees in the health system. Most of the unions' concerns relate not to this bill but to the broader reform of governance arrangements to which I have just referred. That bill is of more relevance to their members than the content of this bill, and they will be kept informed and consulted as this work proceeds.

The comments of the ANMF relate to the interrelationship between the minister, the chief executive of the department and the board. The AMA also raised similar concerns about accountability. As I mentioned in my second reading explanation, the boards will be accountable to me for the oversight and delivery of health services in accordance with a service level agreement negotiated between the local health network and the board.

These boards will be required to operate within government and departmental policies, which is no different to how local health networks are operating currently. The bill requires that the board must comply with any directions of the minister or the chief executive. I consider that is a reasonable requirement, particularly where a board has failed to comply with its functions or is not operating within government or departmental policies. The ability to provide direction to a board should be viewed as a reserve power.

At the end of the day, the minister, the chief executive of the department and the governing board will have distinct roles, with the minister performing his or her role in setting policy and direction for the portfolio in South Australia, the chief executive of the department being the system manager of the health system and the board being responsible for the governance of the local health network and its service delivery. Each party needs to understand each other's role and respect that role and authority in order for the system to function. The community has the right to hold each accountable.

The governing board will be responsible for the appointment of the chief executive for their local health network. The bill includes a provision for the board to consult with the chief executive of the department, but at the end of the day it will be the board's decision to appoint a person as their chief executive officer. The chief executive officer of the local health network will be responsible to the board and not to the minister or the chief executive of the department. The ANMF has also requested that clinicians appointed to the board should not be limited to medical practitioners. There is nothing in the bill to preclude the appointment of members from other professions to the board. The AMA has taken the view that the board members must include at least one medical practitioner, preferably as chairperson.

I reiterate what I said earlier: the board members are meant to bring their skills to the board table, not to act as a representative of a body or group beyond the board. Appointments will be merit-based appointments to ensure that the best persons are engaged on the board. The health professionals appointed to the board are not there to represent their profession but rather to provide an understanding to other members on clinical governance and other health issues to ensure that health services are safe and effective. I also note that, as far as I am aware, no representative body has put forward amendments in relation to election of a representative to the board as proposed by the opposition.

The Hon. John Darley has raised concerns about how the government can assure the council that the boards of local health networks will be given realistic budgets with which to work. Budgets are currently determined and negotiated each year for the LHNs through the service level agreement negotiation process. That will continue to be the case under the board governance model. Significant changes have occurred in the budget-setting process since the last time boards existed in South Australia.

In the past, these negotiations used the state casemix price as the basis for funding. The 2011 National Health Reform Agreement established the basis for national activity-based funding arrangements. These arrangements ensure that South Australia now follows as closely as possible funding LHNs at a national efficient price for all activity-based funding so that there is both transparency and equity with respect to the basis of funding.

The national activity-based funding arrangements have not only allowed for national comparability but also led to increased investment in data activity and costing systems at the patient level across more service types and locations. This has increased the accuracy and comprehensiveness of funding models at the national and state level and supported improved efficiency.

The Public Sector (Honesty and Accountability) Act clauses apply in relation to this legislation. The government supports the opposition's proposal that it is appropriate that the boards be required to disclose interests rather than simply manage current interests. We propose therefore to put forward amendments that—and they have been distributed—based on the precedent of the Planning, Development and Infrastructure Act 2016, we would institute a provision for disclosure of interests.

Relying on the model that is already in the planning act means that less of the detail that is in the opposition's amendments would need to be in the act; it would be in the regulations instead. This would make it easier to add or modify interests in time rather than having to do so through legislative amendment. It does not detract from matters that the opposition wishes to have disclosed. We want to be cautious in relation to what disclosures are required to be made. We appreciate that the opposition's amendments looked more like a parliamentary disclosure regime, and we need to get a balance between people who are serving on a government board and people who are serving in a parliamentary context.

In terms of the opposition amendments that have been filed in relation to the inspector, we believe that the opposition has misconceived the role of the inspector. The bill is an appropriate opportunity to consider this issue, which relates to the relationship between the minister and the board. In committee I will explain the fundamental role of the inspector and why the government will be opposing the amendment.

Another matter that the Hon. John Darley raised in his second reading speech was the issue of the scope of a board's responsibilities. He asked the government to clarify whether boards would take a hospital-centric approach or whether, as part of their responsibilities, boards will be expected to adopt a more holistic approach to the way healthcare services are delivered and coordinated within a particular region. I confirm that the government's view is the latter and that we will not be making the mistake of the previous government under Transforming Health with its almost exclusive focus on hospitals.

Focusing on hospitals is not the way to transform our health system. It is not the way to develop and deliver the joined-up health system that the South Australian community expects and the government is committed to delivering. Local health networks already are responsible for many services and programs that are delivered beyond the walls of the hospital they run. This will continue to be the case under the boards, although the governance of statewide services is likely to change.

While the act uses the term 'incorporated hospital', in practice, the term 'local health network' is used in recognition of the range of health services that are provided by these entities. As defined under the act, this will include services for the promotion of health and wellbeing; the prevention of disease, illness or injury; intervention to address or manage disease, illness or injury; the management or treatment of disease, illness or injury; or the rehabilitation of ongoing care for persons who have suffered a disease, illness or injury. In some country areas, the local health network will also be providing residential aged-care services.

Beyond state government services and programs, the government will be expecting boards to work closely with other players in the health space: with local GPs, with the Adelaide and country PHNs and with non-government organisations. This wider remit is reflected in the functions of the board in clause 11, proposed section 33(2)(h). I would like to take this opportunity to thank officers from the department and parliamentary counsel who have assisted me in bringing this legislation before the chamber, and I thank honourable members for their indications of support for the second reading of the bill. I look forward to the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. K.J. MAHER: I have a couple of questions, broadly, on the operation of this bill. As the bill that is before us currently stands unamended, can the minister explain whether his system of health boards could be up and running under this bill alone? That is, could this bill give effect to the boards running without the need for this stage 2 program?

The Hon. S.G. WADE: The government has no intention of boards becoming fully operational without the full governance and accountability framework being in place.

The Hon. K.J. MAHER: I thank the minister for his response. Is there technically, as this bill is drafted, a reason they could not be, though?

The Hon. S.G. WADE: The bill could be proclaimed but the government has no intention of the boards becoming operational. The stage 2 bill will need to deal with a whole range of elements of governance and accountability.

The Hon. K.J. MAHER: I thank the minister for his response, but I am not sure he quite understood the question. Technically, are there any reasons this scheme could not become operational under the bill before us?

The Hon. S.G. WADE: It would not be possible for the government to implement the governance and accountability framework it envisages in relation to boards without the legislation that is envisaged in stage 2. All the government could do with this legislation is establish boards; that is the purpose of this bill. That is why we have decided to do it in two stages.

I will just highlight the benefits of that approach. If we were to take the opposition's approach and wait until the full bill was concluded, considering that we want to give both the community time to consult and the parliament time to consider, it is highly likely we would not be able to establish boards until February or March next year, in terms of constituting them. If that were the case we would be required to concertina the induction and the training required, and for the boards to be taking on full responsibility in a much shorter time frame.

It is our view that not only is it helpful to have board chairs working with their management in an informal way as early as possible and, if you like, getting a better understanding of the business before they take full operational responsibility on 1 July 2019 but also the boards together can do induction and training work.

The Hon. K.J. MAHER: I understand the minister saying that they have this plan and that this is what they may do and this is how it may go. The bill before us sets out how the boards are constituted, the function of the boards and how they work. If they were not to do stage 2, what is the reason these boards could not operate under just this bill?

The Hon. S.G. WADE: The boards could exist and could operate, but they would not have the framework that the government intends. That is why we are intending doing it in two stages.

The Hon. K.J. MAHER: I thank the minister. That is what I was getting at: this actually sets up the boards, this sets up the functions of the boards. I understand the minister is telling us that they have plans to do more with that, and I think the plans are to actually repeal this act and replace it with an entirely new act that would have further and better details, but I thank the minister for letting us know that this scheme could become operational if we pass this bill, that the scheme of health boards could work in the absence of anything further, notwithstanding a statement of intention to do something in the future.

On that basis, I suggest that if this could become operational—and there is no technical reason why this could not become operational and these health boards be in place and start carrying out their functions—and if it is also the intention to repeal this with further and greater details, then what possible harm could the opposition amendments do if you are going to change it anyway? Won't the opposition amendments be merely a safeguard? As the minister said, this could all become operational without anything further, so these opposition amendments could be merely a safeguard in case the government does not do exactly what they say they are going to do and bring back other things.

The Hon. S.G. WADE: My presumption would be that a more responsible way to provide the council assurance, if they need it, would be to put a clause in that repeals the bill on 30 June 2019. In terms of the matters that are dealt with in this bill, I think that should be the focus.

I do find it somewhat hypocritical, actually, from the opposition; they say how important consultation is, but they want their framework legislated without having consulted on it. That is why we, as a government, have said that we want to put down the framework for the boards, their composition and their eligibility, so that we can make appointments. As I said, we are happy to even amend the elements that are in stage 1. As I said, we would be very reluctant to change the elements that relate to eligibility because we put board members in the invidious position of becoming ineligible after their appointment.

I would suggest to the council, if they have such little trust in governments that they want to make sure that we cannot use stage 1 right through and beyond 1 July 2019, they might be attracted to a sunset clause on 30 June 2019 rather than the option of pre-empting consultation on these important stage 2 matters.

The Hon. K.J. MAHER: The minister has referred to consultation and how important consultation is when establishing such a fundamental change. I know the minister outlined a couple of letters in response to consultation. Can the minister outline in detail all the stakeholders who were consulted with before the bill was drafted?

The Hon. S.G. WADE: I will take the Leader of the Opposition's question to relate not to before the bill was drafted, but rather on the bill. Is that—

The Hon. K.J. MAHER: Before it was introduced.

The Hon. S.G. WADE: Before it was introduced. There was not consultation before it was introduced; it was consultation on the bill itself. That consultation was broad and included employee organisations. It included the community in terms of the SA Health website that was put in place, which had detailed information about the boards. Also the health advisory councils were written to, both in relation to the bill and in relation to inviting them to apply to be on the board.

The Hon. K.J. MAHER: I thank the minister for outlining generic groups of individuals or organisations who may have been consulted. Can the minister outline specifically which organisations were consulted before the introduction of the bill and, probably more importantly, what organisations did the minister himself hold discussions with before the introduction of the bill?

The Hon. S.G. WADE: As I have already indicated to the council, the consultation occurred after the tabling of the bill. In relation to people and organisations, they included the Ambulance Employees Association, the AMA, the ANMF, the Health Services Union, Professionals Australia, the Public Service Association of South Australia, South Australian Salaried Medical Officers Association and United Voice.

The Hon. K.J. MAHER: I want to be clear: by what date does the minister intend this so-called stage 2, the complete repeal and replacement of what we are supposed to be doing here, to be concluded and legislated by?

The Hon. S.G. WADE: I do suffer from chronic optimism: I would hope it would be by the end of this year, but I do note that my officers tend to talk more about late this year, early next year.

The Hon. K.J. MAHER: If we are putting boards in place now, is the minister saying he would expect this second round of legislation to have passed the parliament possibly by the end of this year?

The Hon. S.G. WADE: My optimism is being highlighted again by my adviser. I would hope that the consultation would go well and that it might pass by the end of this year, but the prevailing view in the department is it is more likely to be early next year.

The Hon. K.J. MAHER: Can the minister provide what he has now and, given that he said he intends to appoint these boards, what the estimated costs are of appointing these boards?

The Hon. S.G. WADE: I am advised that the remuneration of boards would be $3.6 million in a full financial year but that that would be offset by the savings made in relation to governing councils. Governing councils in the local health networks are currently remunerated, so there would be an offset.

The Hon. K.J. MAHER: I thank the minister for the advice, as I understand it, that the direct costs—just for boardroom fees, effectively—will be, I think, $3.6 million a year?

The Hon. S.G. Wade: Remuneration.

The Hon. K.J. MAHER: Yes, the boardroom fees for the new boards being created. Can the minister outline what are the other on-costs or costs associated with the establishment of these boards in addition to just the director or board fees paid to board members?

The Hon. S.G. WADE: The costs of the administration of health as a result of these changes will be explored as we go into stage 2. Let us be clear: when we talk about devolving, we are not just talking about devolving control. These boards will be resourced, but that will significantly involve an investment in the LHNs as opposed to activity that is currently occurring at the centre. So there will be a significant redistribution of resources.

The Hon. K.J. MAHER: The minister is asking us to establish these boards. I think it is only fair to the members in this chamber for the minister to outline not just the direct costs associated with boardroom fees but what the other costs are associated with the establishment of these boards.

The Hon. S.G. WADE: I fully respect the right of this council to have information in relation to the bill before us. That is why this bill establishes boards which will be remunerated, and on that I have given the council the advice that I have been given in terms of the costs. In terms of the matters that are not in this bill, the stage 2 matters, that will impact on the costs, I cannot give an answer because (a) it does not relate to this bill and (b) those costs are completely related to both, if you like, governance issues that will be unpacked under stage 2 and, perhaps more significantly, processes within SA Health, particularly with their employees on the structure of services going forward.

The Hon. K.J. MAHER: I thank the honourable minister for his answer. If he is not willing to tell us, can the minister at least indicate: does he or his department—maybe through his adviser—have any idea what these costs will be? That is, have they an estimate of what they might be in the future at all that he is just not letting the chamber know?

The Hon. S.G. WADE: I am not aware of any estimates, but what I can indicate is how confident I am that boards will more than pay for their remuneration fees. The contrast between this government and the former government is that the former government was willing to spend tens of millions of dollars on overseas and interstate consultants to consult on their Transforming Health budget cuts process, and we are going to invest $3.6 million into South Australians with skills working with their communities to manage their health services.

The Labor opposition seems very proud of what it has achieved under Transforming Health in the last four years and what they have done under their watch since the abolition of the boards. I can assure you that that is not what I hear on the street.

The Hon. K.J. MAHER: I thank the minister for his answer. He has talked about using interstate consultants. Was the recruitment firm used to undertake the recruitment process for the board chairs a South Australian or interstate company?

The Hon. S.G. WADE: I understand it is an interstate company.

The Hon. K.J. MAHER: Can we be clear? The very first thing that these boards have had to do—that is, find some sort of consultant to recruit these chairs—the minister has decided to go interstate for that, after he has just bemoaned the use of interstate consultants. Is that really what the minister is telling us?

Members interjecting:

The CHAIR: Order! Minister.

The Hon. S.G. WADE: I can advise the council that the recruitment consultant that the member refers to is costing significantly less than $60 million.

The Hon. K.J. MAHER: I thank the minister. The very first thing they have done in relation to this is an interstate consultant. So anything the minister says about the former Labor government is absolute hypocrisy, given that at the very first step it is, 'We will use an interstate consultant.'

The minister has said that he has no idea how much this is going to cost operationally going forward. The actual remuneration of the board members is the only thing he has any idea whatsoever about. The minister has also said that he hopes to have the so-called stage 2 up and running by the end of this year. In my experience, if you are only half a year off having something up and running, you have to turn your mind, particularly with a budget process, to how these things might work. Does the minister want to reconsider whether there is any information, any advice he or his department has about what these might cost into the future once stage 2 is finished?

The Hon. S.G. WADE: In terms of the development of the framework, of course there is a range of options being looked at.

The Hon. K.J. Maher interjecting:

The Hon. S.G. WADE: There is a range of models being looked at in terms of the way SA Health would operate, and particularly how Country Health would operate. A range of models is being developed. The implications of those models, I presume, include financial implications, but I am advised by my advisers that there is no estimate for the administrative changes related to the implementation of boards.

The Hon. K.J. MAHER: So I am clear: did the minister just say that his department has considered the financial implications of how different models might operate?

The Hon. S.G. WADE: I am advised that the budget discussions with Treasury focus on the remuneration of boards and the cost of reform to support the project work.

The Hon. K.J. MAHER: I thank the honourable minister. The minister did say within the last half hour that there was no information either he or his department had on the possible costs. I think he is saying something very different now—he might want to reflect on that. Misleading parliament is not just something that happens in question time. Can he outline the possible costs that are non-remuneration related, and consider what he said here and whether it has been accurate?

The Hon. S.G. WADE: I can reiterate what I have said, which is that the budget discussions with Treasury in relation to this financial year relate to the remuneration of the board and the unit which will be managing reform. I have nothing else to add.

The Hon. K.J. MAHER: What are the possible costs for next financial year in relation to the non-board fees part of this reform?

The Hon. S.G. WADE: In relation to 2019-20 and beyond, the costs will be significantly influenced by the design of the framework, which is the subject of the second bill, but it will also be significantly influenced by administrative processes, which will not need to come back to parliament. So the costs will be impacted by both administrative decisions and statutory decisions.

The Hon. K.J. MAHER: I might give this one more quick go. The minister said earlier that neither he nor his department had any idea of indicative costs. He came back a little later and said, yes, there had been models drawn up and 'we are examining their financial implications'. Just so we can be very clear: does the minister or his department have any indicative costs or any estimations of what the non-board fees might be for the next year and ongoing years of this reform?

In my experience, when something is six months away and you are in the middle of a budget bilateral process, I would be surprised if there was not. Of course, FOIs and questions on notice can help reveal this later.

The Hon. S.G. WADE: The first point I would make is that the full introduction of the boards is not six months away, it is 12 months away or slightly less on 1 July 2019. A lot of consultation has been had in the department already in preparation for both this bill and the second stage, which has raised a whole series of options, but I would not want the council to think that detailed options with detailed financial models have been developed, because they have not.

The Hon. K.J. MAHER: I appreciate the minister's tricky words. Have any indicative or draft options and financial implications been developed? While the minister is seeking advice, I might remind the minister that comments made at the briefings that the opposition was given did indicate that there were such indicative costings available.

The Hon. S.G. WADE: My advice is that the incoming government briefs probably included high-level costings, but those briefings were prepared before they had the opportunity to consult the incoming government, before the engagement with other jurisdictions that has occurred since the election and also discussions within SA Health.

The Hon. K.J. MAHER: He might not have them with him here but, if he does, can the minister indicate what those initial costings were? If he cannot do that now, given that we will be back here after question time, can he inform the chamber after question time of what they were?

The Hon. S.G. WADE: I do not intend to reveal the contents of my incoming brief. What I would say is that I actually cannot see the relevance of costings that were not informed by an engagement with a new government, the consultation with other jurisdictions that has occurred and the further consultation within SA Health.

The Hon. K.J. MAHER: After those initial costings in the incoming government brief, have there been any better or further costings, as draft or initial as they may be, about what the costs of these boards—the non-boardroom salaries—might be over the future years? Or is the minister telling us that he has got this plan, they have stage 2 in mind, but they have not turned their mind at all to whether this might cost millions or tens of millions extra? Are they flying absolutely blind in terms of what the overall cost might be? Is that what he wants the chamber to believe?

The Hon. S.G. WADE: I understand there was work done in the context of the budget bid, but Treasury wants to focus on board remuneration and the costs of the reform project. The early figures would only be indicative because the model is heavily dependent on the governance and accountability framework to be implemented.

The Hon. K.J. MAHER: I thank the minister. It took us a while to get here, that there are indicative figures about what this reform will cost. I wonder if the minister will do the chamber the benefit of letting us know what the reform we are expected to vote on might cost the taxpayer of South Australia, just indicatively?

The Hon. S.G. WADE: The figures are early. As a full business case is developed and devolves as the accountability and governance framework is developed, we will have much greater clarity. I think it is also important for members to remember how important it is to be aware of not just the costs of these reforms but also the benefits from them. As I said earlier, with regard to the $10 million that the opposition claims in its press release today is the cost of remuneration, the benefits to the state of better governance, better local engagement with clinicians and better engagement with communities are very tangible benefits.

One has to ask oneself: why, after 10 years of Labor, are we the only state in Australia that does not have board governance? Board governance at a LHN level was actually a reform promoted by federal Labor, yet this state opposition, having centralised the health system year after year after year, is saying that it is somehow a threat to the health system.

What I think South Australians believe—and it is certainly the belief of the Liberal government—is that a centralised system which is disconnected from its communities and its clinicians is far more costly than any board remuneration. It is very costly in terms of inefficiency and a failure to deliver quality services.

The Hon. K.J. MAHER: Can the minister outline how health advisory councils will be affected as a result of this reform?

The Hon. S.G. WADE: The impact on health advisory councils will become clearer in the stage 2 consultation. The health advisory councils are maintained under this bill and, in fact, the boards have a specific responsibility to consult with health advisory councils. I met with the presiding members of the health advisory councils recently and found them to be very positive about the bill, and I am keen to work with them to make sure the relationship between health advisory councils and the boards is clarified during the second stage.

The Hon. K.J. MAHER: I think this is going to be a problem that we will encounter as we go through this committee stage and into clauses in that we will ask questions about how this will operate and the minister will just say, 'Don't worry about it; that's off to the next thing. That's going to be part of stage 2.' It is a tricky way to hide what the intentions are. A different path to have taken might have been to actually work out what you are going to do, consult on it and come to the chamber with an actual developed plan where there is some clarity about how things are going to work.

The minister has already admitted that this could all be implemented and we could have these boards up and running and functioning just with this legislation without stage 2. This is enough to have these boards up and running. Given that these boards could be up and running, I think many members of this council are going to get a bit sick of it if we just keep getting the answer, 'Look, that will be stage 2.' The minister has admitted that you do not necessarily need a stage 2. The boards will be up and running, could be functioning, could be doing what they intend to do without a stage 2.

I ask the minister to reflect and maybe provide at least some guidance about where this might go rather than treating us with the disrespect of continually saying, 'Don't worry about it. Just pass this legislation now. There will be a stage 2,' even though—as has been admitted—this legislation could potentially be with the boards up and running. I wonder if the minister, with those comments in mind, can outline what is going to happen with Country Health and statewide services under the full implementation of this plan?

The Hon. S.G. WADE: I also make the point to the council that the benefit of establishing the boards under this change in anticipation of the second bill is that board chairs and board members would be able to be involved in the consultation and the development of the bill. Subject to the appointment of the board chairs, which is expected at the end of July, and the progress made on appointing board members, that obviously will be over time and so their input will be over time; however, I think it is useful for them to become part of the conversation.

The member might say that we are going to get bored with questions about things that are not related to the bill but people who want to ask questions about matters that are not related to bill can expect to get bored.

The Hon. K.J. MAHER: I think that is showing a great deal of disrespect. As the minister has said, this bill can be up and running by itself; it does not need stage 2. I know the minister said, 'We intend a stage 2,' so what we have is the minister saying, 'We have a bill here that establishes these health boards. It remunerates these health boards. We are going to appoint these health boards before stage 2.' What the minister said was that these health boards can function without stage 2. They can carry out all their duties except some transparency and accountability that will apparently come in at a future stage.

If that is the case then this chamber and the members in this chamber have absolutely nothing to lose by passing all of the opposition's amendments. If the government is going to repeal it anyway, it is a good safety valve to have the opposition amendments in place just in case the government does not do exactly what it says it is going to do.

If the minister is true to his word and this is all going to be repealed and replaced with a whole fresh set of things, it does no harm to have the government's accountability and transparency measures in place now, given that you are just going to overturn it anyway. I have a question that needs an answer now, so we can understand it. What is the financial responsibility of these boards? What is the threshold for capital works spending? How will this be determined? What are the spending controls? I think the minister has to give us some assurances on some of these things.

The Hon. S.G. WADE: The amendments will be considered when we go to the relevant clauses. As I said in my earlier remarks, if the opposition is serious about consulting on the amendments, consulting on this bill, they would not be insisting on putting in amendments that relate to stage 2 without consulting with the community. The government has not even formed a view on a number of opposition amendments because they relate to stage 2 considerations that we want to consult the community on. If the opposition wants to put the horse before the cart, they will not have the support of the government.

The Hon. T.A. FRANKS: I refer the minister to the correspondence from the AMA of South Australia to myself of 18 June, which notes at the bottom of an unnumbered page:

The AMA(SA) would stress that there should be no loss of funding/resources for regional health/clinical surfaces due to costs associated with establishing the Boards.

Could the minister provide some clarification that this will not be the case?

The Hon. S.G. WADE: It is my expectation that the costs of the boards would be met from within the administrative element of the operation of the department, not the service element.

The Hon. T.A. FRANKS: I move onto the next paragraph of the AMA of South Australia's correspondence. It notes that it:

…favours certain functions of statewide significance to remain centrally managed. For example, the Rural GPs Service Agreement has significant workforce implications. It is not reasonable or sensible for 6 regional Boards to negotiate across the 60 relevant rural health services for GP services. This function should remain the responsibility of a small central executive which would be responsible for other statewide functions also.

Can the minister provide comment to those concerns?

The Hon. S.G. WADE: These are issues that will be unpacked in stage 2. It certainly does not make sense to devolve everything. There would be at least three options. One would be that these negotiations be managed centrally by the department, perhaps in consultation with the industrial relations function, which I think is in the Department of Treasury and Finance.

It could be done cooperatively across the country boards. One of the options being discussed is having an office of Country Health, which might be a cooperative office across the six country regions, but it could be managed by individual boards. That is the sort of discussion we want to have with the community and with the board chairs when they are appointed and also to consider within government.

The Hon. T.A. FRANKS: I now refer the minister to some correspondence that he provided to crossbenchers, including myself, after a briefing that his office and those in the Public Service supporting the administration of this bill provided to elaborate on the consultation previously undertaken with regard to the proposed boundaries. It is a letter from the now minister, but from when he was shadow minister, dated 1 December 2017.

I assume this particular letter is to the presiding member of the Balaklava Riverton HAC, but I assume it went to all the HACs. First, could the minister confirm the scope of the HACs consulted? The letter says:

In early 2017, the Liberal team in the Parliament of South Australia released a policy on board governance of Local Health Networks (LHN). If we are elected to government in March 2018, we are committed to establishing 6 LHN boards in regional South Australia and appointing all board chairs by 31 July 2018.

I write in relation to the boundaries of the proposed regional LHNs. As I am sure you are aware, Country Health SA currently operates with six districts—see map enclosed. I seek the views of your Health Advisory Council (HAC), or individual members of the HAC, as to whether the boundaries of the current Country Health SA district would be appropriate boundaries of the regional Local Health Networks.

Health Advisory Councils will continue to operate at the local level following the establishment of the regional boards.

Courtesy of the minister's advisers I also have a copy of the map that was used. My questions to the minister are: what was the extent of that particular piece of correspondence that he undertook in opposition and were there any opposing voices to the boundaries that have now found their way into this legislation?

The Hon. S.G. WADE: My understanding is that all HACs were written to with a similar letter on 1 December. In terms of opposing voices, I do not recall any opposing voices.

The Hon. T.A. FRANKS: I thank the minister for that, but if he could double-check during the lunch break to make sure of those facts. I would not be surprised if they had not been uncovered to this point but, not to rely on just the minister's recall on something, if he could double-check that over the lunch break it would be appreciated.

The Hon. R.P. WORTLEY: Who will be responsible for ensuring that these boards work within a financial budget? Whose responsibility will it be to ensure that they do not overspend on capital works or just the very basics of running a hospital?

The Hon. S.G. WADE: LHNs report to the department in relation to the service level agreements and the boards report to me.

Progress reported; committee to sit again.

Sitting suspended from 12:59 to 14:15.