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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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NATIONAL HEALTH FUNDING POOL ADMINISTRATION (SOUTH AUSTRALIA) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 17 May 2012.)

Dr McFETRIDGE (Morphett) (11:23): I again inform the house that, in the absence of the shadow minister (Martin Hamilton-Smith), I will be the lead speaker for this piece of legislation and I can tell the house that again the opposition will be supporting this legislation without amendment. The debate may be a little longer than the last piece of legislation because there are some points of clarification that we will need but, other than that, it is relatively uncontentious.

The legislation that we are looking at today has passed in most states already. I think Western Australia is the only state where it has not passed and it is likely to pass there shortly. It has been passed in the federal parliament and I understand that the system is already functioning. As of 1 July, it came into life.

The questions the opposition will ask the minister, either in response to the second reading contributions or if other members want to go into committee, is that there is some concern about how the bureaucracies at state and federal level will be structured, how they will interact, how will the additional funding be paid to us, how will it be used and over what timeframe and is there a mechanism in this legislation to protect the state from intervention and micro management by the commonwealth? As we all know, the federal government would love to take control of everything in the state, but the parliament owes it to South Australians to make sure that they get the best possible representation. I think it is absolutely imperative that this parliament provides that level of representation.

The National Health Funding Pool Administration (South Australia) Bill 2012 will ratify legislation passed in the federal parliament. It sets up a number of layers of bureaucracy. I have called this the Sara Lee bill—layer upon layer upon layer. The initial proposal for national funding for the health system was put up by the former prime minister Kevin Rudd, with what I will call the mark I version of this. In that version the federal government was going to provide 60 per cent of public hospital funding in return for a 30 per cent clawback of GST revenue. That has been changed and my understanding now is that the principle to fund half of all future growth in health funding is in place. A national pool of funding will be established with a pool of funds in each state. At this stage it is a total of $16.4 billion funding, and South Australia will receive approximately $1.1 billion.

My initial concern, when this was first put up, was: what sort of CPI are we going to be using? Are we going to be using the supermarket CPI of about 3 per cent or are we going to be using the health CPI, which I think in the initial proposal was put at 9.3 per cent? It has been put as high as 12 per cent by the former treasurer Kevin Foley, but the accepted level is about 8 per cent to 9 per cent. So, health funding is not going to be increasing at the normal CPI of 3 per cent that we would see for a basket of groceries. It is much higher than that. I look forward to seeing some guarantees from the federal government that we will not be cut short, particularly in South Australia where we always seem to be underdone by the feds. We need to be vigilant. It is imperative that we get the best outcomes with this legislation. So, the CPI of 8 per cent to 9 per cent in health is one that we need to keep in mind at all times.

The bill before the house forms part of a national reform process to improve the transparency and accountability of how our public hospitals are funded and managed. In August 2011, the Council of Australian Governments signed the National Health Reform Agreement committing all commonwealth, state and territory governments to work in partnership to improve health outcomes for all Australians. We hope that happens. We hope that the layers of bureaucrats that are being created here do not suck up more money than we have allocated under the initial planning.

This legislation is to ensure the sustainability of the public health system going forward. We hear dire predictions that the health budget will overtake the whole of the state budget within, I think, 20 years, or it might be a bit longer than that. That is if we keep doing things the same way that we have been for such a long time. We have to think much smarter about it. We have to be more proactive in providing everything from primary health care to better flow-throughs in our hospitals. It is not just about pumping the money in, because health (with a CPI of 8 per cent to 9 per cent) will suck up money like a sponge sucks up water. The health system is worse than an airline. Airlines are bad enough, but the health system will take as much as we can possibly pump into it and then keep asking for more.

We need health funding reform, but it has to be sustainable. The National Health Reform Agreement provides for the establishment of four independent national bodies to focus on increased accountability, transparency and performance. They are: the Independent Hospital Pricing Authority (IHPA), the National Health Funding Authority, the National Health Performance Authority and the Australian Commission on Safety and Quality in Health Care. So, there are four layers of bureaucracy there: how many bureaucrats are going to be involved in each one, and are they coming from the states or the commonwealth? There is some overlap, I understand, but it will be interesting to watch how these bodies actually perform and whether they grow in the way that a lot of bureaucracies tend to expand.

The other things we have besides these four layers are the local hospital networks in all states and territories and the Medicare Locals, which have now taken over from the division of general practitioners. They are separately funded in some cases. The feds will put money straight into the networks. It will go through the state pools but it is basically straight funding to those hospital networks.

The Medicare Locals, as I say, have taken over from the division of general practitioners, who were getting money straight from the feds. I think some was coming from the states, but most of it was coming from the federal government. It will be interesting to see how that is working now and whether we are able to maintain those levels of primary health care that were being provided by the divisions of general practitioners, because we had a number of divisions of general practitioners in South Australia who were doing excellent primary healthcare work with very minimal funding. The bang for their buck was exceptionally good.

Whether the Medicare Locals will be able to provide that, I do not know. There is some level of confusion with Medicare Locals. It is thought that there is some sort of Medicare office that people will go to to pay their bills. It is completely different from that. It is a provision of primary health care to local areas supervised by the former divisions of GPs, as I have said.

In South Australia we have the hospital networks: Central Adelaide, Northern Adelaide, Southern Adelaide, Country Health and also the Women's and Children's. I think the dental hospital is included in that one, but I stand corrected if it is not. So, we have groups and bodies of bureaucrats that are overseeing spending on health. We can understand why the health budget is so strained, why it tends to want more and more every year: because we have layers and layers of bureaucrats.

I am very concerned that, with the increased levels in layers of bureaucracy here, more is going to go into opening offices and not into opening beds. That has been one of my big concerns the whole time I have been associated with the health portfolio. We need to make sure that we are not closing beds and opening offices. That is very important, and I need assurances from both my federal colleagues and the state government that the outcome for South Australians is going to be better health care generally, whether it is in a hospital or with their local health practitioner.

The Independent Hospital Pricing Authority (IHPA) is responsible for determining the national efficient price of public hospital services for use in activity-based funding and the efficient cost of block-funded services and teaching, training and research. That all sounds good but I think for many years in South Australia we have been using casemix funding. My understanding of casemix funding is that you look at the types of cases that are being dealt with in hospitals and you look at the overall efficiencies in those hospitals. The casemix funding that was developed—and I think it was developed by one of the former Liberal government's—

The Hon. J.D. Hill: That was by Michael.

Dr McFETRIDGE: The Hon. Michael Armitage developed the casemix funding for South Australia. It has worked really well. So, is what we have been paying in the past not the efficient price that we are going to be seeing now? I think the national efficient price that is being set is about $4,800 per unit. I am not going to go into what an equisep is or what the national efficient price is based upon—it is quite a complex calculation—but we do need to make sure that we are not going to be done over by the feds with this national efficient price being set by the Independent Hospital Pricing Authority. Our casemix funding has worked well in the past. There has also been block funding. As we know, we have some very small hospitals in our country in fairly remote areas. There is no efficiency there that is comparable with a large metropolitan hospital. It just does not happen.

The need to maintain those services is completely inarguable. It is just a no-brainer that you do not have to have a week off to travel to a hospital if you live in the country. You should not have to travel hundreds and hundreds of kilometres because our country hospitals are not being funded. We need to make sure they are going to be funded. We know they are not efficient, and we know you cannot have a heart transplant in every hospital, but you should be able to have reasonable levels of care. The Balaklava Hospital is the latest casualty of some of the rationalisation of funding of health care. I do not think it is fair, and more will be said about that at some other stage.

The Independent Hospital Pricing Authority sets the price. There is a pool of funds—and that is what this legislation is about—which is set aside by the federal government to pay to the states and which then is distributed to the various local hospital networks. The first payment for the state local hospital networks was on 5 July. The legislation we are talking about is already functioning. The first payment was on 5 July, and the first payment from the commonwealth into the funding pool was actually yesterday, 9 July, so this is well and truly underway.

It irks me that we are doing this retrospectively in some ways, but the need to make sure we do get the best bang for the buck is why we are here, and we can always amend legislation in this place. We are a parliament in our own right, so we can make sure other parliaments take notice of what is happening in South Australia by raising concerns and, if necessary, amending legislation.

The Independent Hospital Pricing Authority is there on top of the national health funding authority, which is already putting money into the pools. The National Health Performance Authority is one we will be watching carefully to see how they manage the health workforce in Australia generally, but in South Australia. Then there is the Australian Commission on Safety and Quality in Health Care.

It was interesting to see the comment on the weekend by one of the government doctors that the standards at Balaklava Hospital were substandard. I would like to know how long it has been substandard and why it was allowed to continue if it was. Was it the theatre, was it the facilities or, God forbid, was it the professional ability of the doctors and nurses? I doubt very much that it was the latter case. I think we have the most highly qualified and dedicated doctors and nurses of any state or territory here in South Australia, and I congratulate them on the work they do under the circumstances in which they have to work.

I will quickly go back to the Independent Hospital Pricing Authority's national efficient price. There were some concerns about remote hospital area adjustments in the calculation. If you look on page 3, at the national efficient price determination by the Independent Hospital Pricing Authority, there is a very complex formula there that is used to create an ABF. I am not quite sure where the ABF comes into it now because we have a PAC and the National Weighted Activity Unit. I think the ABF is the activity-based funding model. There are so many acronyms involved with this that it is not difficult to forget for a moment what that one is, but the activity-based funding model is the one used to formulate how much each hospital is getting.

The national efficient price is $4,808 per National Weighted Activity Unit at the moment. I would encourage people who are interested in how this is working to actually get this national efficient price determination and look at page 3, and they will understand how complex is this whole procedure. It will be very important that members of this place and members of the public watch how our hospitals are being funded, watch the changes, watch for any reductions in levels of service, watch for any cuts to service, and make sure we are actually getting what we have been led to believe we are going to get.

Another issue involved in setting a national efficient price is the overall scope of hospitals in South Australia. In determining the overall scope of services, the sorts of things they consider are all the admitted programs, including Hospital in the Home programs, and all the services offered by the emergency departments as well. There are two broad categories of scope in public hospitals and nonadmitted services, and they are the specialist outpatient clinic services and other nonadmitted patient services.

The specialist outpatient clinic services are of great concern to all of us because we saw, with the initial changes to the provision of outpatient services that were put in place by this government, that, of the 600,000 plus outpatient visits per year in South Australia, about 120,000 were initially going to be outsourced to private practitioners so that patients, instead of going to hospital, would see private practitioners in their own rooms. I asked questions at the time about how that was going to happen. I would like to know what has been done to make sure that specialist outpatient clinic services are going to be maintained and whether the levels of funding have been affected by the proposals of this government to, first of all, do an initial outsourcing.

I think it was about 20 per cent of outpatient services, moving to a second tranche of up to 50 per cent of outpatient services, being provided in the rooms of private practitioners. We know there will be a gap paid, we know that there will be some Medicare charges levied, but we want to know that the state is not going to then be somehow penalised. We want to make sure that this provision of outpatient services actually within the hospitals—and this is all about public hospitals—is going to be maintained.

The need to make sure that you can go and see a specialist in South Australia and not have to wait months and months, but be seen and have your surgery performed, is imperative because, during that wait, you will often deteriorate and so more protracted, more extensive and more costly treatment, in that case, will need to be undertaken. It is a bit more at the front end, but you save a lot of the back end with so much in health, like primary health care—you can save millions and millions.

As well as the specialist outpatient clinic services, there were other nonadmitted patient services. Here, the state government has been invited to propose services that will be included or excluded from this so-called category B of other nonadmitted patient services. These services have to be directly related to an inpatient admission or an emergency department attendance; intended to substitute directly for an inpatient admission or emergency department attendance; expected to improve the health or better manage the symptoms of a person with physical or mental health conditions who has a history of frequent hospital attendance; or was reported as a public hospital service in the 2010 Public Hospitals Establishments collection.

The minister can tell the house during committee, if we need to, but in his reply to the second reading speeches, what proposals we have made that will be included in nonadmitted patient services, what services will be included and any that will be excluded. The need to make sure we are getting the range of services, as I said, is absolutely vital.

I will just quickly touch on the other part I spoke briefly about with Balaklava Hospital and other remote hospitals, which is block funding. Whether Balaklava Hospital gets block funding I am not sure, but there are certainly numbers of public hospitals where just the activity-based funding is not practical. They see a low volume of patients but we must retain them to provide the essential access. The need to make sure that these hospitals stay viable is important, because if you do not have the hospital, if you do not have the bank, if you do not have the mechanic and if you do not have the school, towns close and we cannot afford to allow our rural and remote towns in South Australia to close because of lack of government support.

We know that they are not efficient—they have never been efficient—but we do need to make sure that we provide those services. I think that there are ways of improving the efficiencies of these services when you consider that, on any day, there are over 500 country patients in city hospitals. The need to get those patients back to their communities and back home if you have got suitable levels of care back in their own communities is one that you really do need to consider very carefully.

The absence of economies of scale means that some services just will not be financially viable, so perhaps the minister can tell the house the range of services and what numbers of hospitals will be affected by block funding and give us some examples of how it is going to work. The need to emphasise that, I think, is absolutely vital, particularly with the concerns that are out there, and also, as I say, the recent issues over Balaklava. The legislation is pretty straightforward—creating all these layers of bureaucracy. There will be some concerns about it, as I said at the start of my contribution.

We do want to know how the bureaucracies at a state and federal level will be structured, how they will interact and how the additional funding will be paid to us. I think that it already has been paid as at 5 July, as I have said. Who it has been paid to is something the house should be aware of, as well as the safeguards in place to stop the state from federal government micromanagement and intervention. With that, I conclude my remarks and I look forward to the contributions of my colleagues; and, if we need to go into committee I am happy to do so.

Ms CHAPMAN (Bragg) (11:46): I speak on the National Health Funding Pool Administration (South Australia) Bill 2012. As ably set out by the member for Morphett, this is a federal funding reform that is before us. I am happy to say that I am a federal funding sceptic, and I have a number of concerns about this model. I note, however, that other jurisdictions have signed up to it; and, as I understand it, the commonwealth has now passed its legislation, which is hardly surprising—it wants control of everything, of course.

In any event, I would just like to make a contribution in this way. Recently I re-read a scathing attack by a federal health minister against a state health minister here in South Australia. It was circa 1966 and the federal health minister was the Hon. Jim Forbes, a Liberal health minister in the Menzies' administration, and the state person, in fact, was Sir Thomas Playford who was premier and who had been party to negotiations, apparently, on the signing up of the health funding agreement with the commonwealth.

It is a different era, I accept, but the same statements were made. There were accusations about the state wasting money. There were allegations that Sir Thomas Playford's administration had failed to be adequately transparent. There were even, heaven forbid, assertions that money had been applied for a different purpose other than for what it was specifically identified at the time. So, nothing has changed. I just make the point that nothing has changed. We have had this war going on, whatever the division of the health responsibility has been, between state and federal administrations.

This is nothing new. Many of us have read in the paper over the years about the development of health funding in the country and the accusations that have gone back and forth about those nasty, miserable federal people not giving us enough money, not giving us our proper share, and then the reverse of a federal administration saying, 'You states have failed to properly manage your books, you have wasted money and you're not properly acquitting the disposal and expenditure of health funds under these agreements.'

There was a major reform, of course, we know in the 1970s when then prime minister Whitlam introduced a new structure in which he embraced into the national scene provision of funding under the then Medibank procedure, which was to nationalise doctors and health services at the professional primary level. In addition to that was the slow development of the PBS to the national level, and we now have the feds in charge of doctors and drugs, and they both claim that the cost of these are going up and therefore their primary payment for those needs to be taken into account in the state formulas.

What had moved from a fifty-fifty deal 40 years ago has been the feds claiming that the PBS is off the roof and the doctors' costs are going up and all of those medical expenses, and they try and deal with it by not letting things go on the PBS list for subsidy by the taxpayer by diminishing or narrowing the services to be available—sometimes they increase them and sometimes they pull them back. At the state level we now have a situation where the state, post the Justice Bright inquiry in the 1970s, brought into central control at the state level the public hospitals (except for those recalcitrants such as the Keith hospital which is, of course, paying the price these days for not coming in and doing what they are told). They are responsible at a state level for that funding.

We have seen the development of a number of features of who is responsible for what and we then have the extras—other primary and allied health services, development of aged care, and so on—which have had a mixed bag of support from state and federal levels. Then, of course, we have mental health, which everyone wants to get in on the action on when they want to get a quick bang for their buck and an announcement, but then nobody really deals with the primary issues that go with them. So we have areas of exclusive responsibility and we have areas of joint responsibility; and we have a funding model where now, as we know, under the tax collection arrangements, company and personal income tax goes to the commonwealth, and Wayne Swan divvies it up. So, these debates have been going on for a long time.

The federal government's answer, under prime minister Rudd, was to have a whole cooperative federalism. We were all going to sit around the table and be nice to each other and talk nicely about what needs to be done. We all agree that this is a major area of demand and we need to manage it, and we have an ageing population, etc. Of course, remember that we had a time when we had a number of state administrations under Labor control and we had a federal Labor government, and they all want to sit there and be happy-clappy in these meetings and decide how they are going to do it. So Mr Rudd came up with a model. Prime Minister Gillard's administration, of course, said, 'We are not doing all of that. That's just a nonsense. We are going to have a new system,' so they started all over again. Her model is what we are being asked to sign up to.

In essence, the commonwealth says they have agreed in principle to fund half of the future growth in health funding in the states—and that is a good thing. The problem is the definition of what is going to be in there. We have gone from a stage when we had continued arguments about the actual total amount paid, and the acquittal process has been a disaster. I do not know what all those federal bureaucrats do in Canberra in the Department of Health and Ageing, but they are supposed to identify and audit, under the acquittal process, what the state government spend, and they clearly have not been doing that properly because we have ended up with this continued mess.

In any event, the Prime Minister's answer is to have a pool of funds and set up a new bureaucracy which is to include four new areas of independent national bodies. What utter nonsense! I have never heard of anything so ridiculous: of course they are not independent. These are to be established to monitor the areas of pricing, funding, performance, and safety and quality. So we end up with the Independent Hospital Pricing Authority, again going down this superficial single line of having provision of costs as though there is an efficient pricing model for everywhere in Australia, whether you live in Canberra or in Ceduna. That is absolute rubbish. Nevertheless, that is their first area.

The second area, of course, is to have a national health funding body which is to pool all this money and then dish it out. They are going to have exactly the same problems as whoever has been doing it in the state departments, I would suggest. Whether they pay that through state pool accounts and local health networks, we just have a different process layered on top of the state bureaucracy that we already have. In addition to that, we have a National Health Performance Authority and an Australian Commission on Safety and Quality in Health Care.

We have umpteen other institutes and organisations at the national level, and I do not know what is going to happen to all those, but I am concerned that we are adding levels of bureaucracy. We are not dealing with the responsibility of all these other boards that are supposed to be in charge of performance, pricing and, obviously, questions of safety and quality in health care. What are we going to do with all the state boards that the minister has set up, that we are yet to see?

I am very concerned about the expectation for this model to relieve what we have already. I have said this before to federal ministers—Liberal and Labor—that they have the power in the distribution of money, whether it is direct funding or block funding that comes back, and if they do not get a proper acquittal response as to the distribution of those funds they are entitled to withhold the funds in the next financial year or even ask for it back, just as they have the capacity to do so in education funding.

It is not that they are without power, but they certainly are not brave enough to deal with the real issues. I suggest the real issues will be the high level of risk that is expected and perpetuated by the insurance industry. Health costs in this country are not just paid by patients but also taxpayers and subscribers to private health insurance. These are major areas of incoming revenue and there is a high level of risk, so much so that the GP will say to you, if you present a baby with a temperature, 'Look, I won't necessarily make a diagnosis here; you must take the child to the children's hospital.' We have a high level of risk aversion amongst the professionals and a high level of costs.

The second is patient expectation. Nobody is allowed to die anymore, nobody is allowed to leave sicker than you are. There is a very high public expectation out there. When we go into public hospitals in South Australia, unless babies are born in that hospital, the average age is between 75 and 85 years. You might go to a sports clinic and see lots of footballers with sprained limbs, knee injuries and so on, all looking active and having physiotherapy (and they may have beautiful nurses) and all those things, but the reality is that most of the acute health care in South Australian hospitals deals with aged people.

As you and I both know, Madam Speaker, we are the beginning of the baby boomers. We are nowhere near halfway through yet—and we are going to be the last in the line to die! As of 2010 we have started to die off, but there are a lot more of us in that big balloon who are coming through and who need to have care. In my view—and I may not be right—the two fundamental things that have still to be sorted out (and this is the minister's charter and responsibility) are not just who is going to be responsible for whatever area of health in the meantime (whether it is acute care, mental health, primary care, etc.; and they have been trying to carve that up, and I think they are still arguing about that) but also the new areas of health. There has been an explosion in the PBS because of the advent of the development of new drug treatments, of course for the benefit of patients, and as they come onstream a decision has to be made as to who is going to take responsibility for the new areas of health treatment.

I heard some magnificent news announced this morning that chemotherapy has had an advanced breakthrough in its capacity to target the nasty cancer cells and not the good ones. These are magnificent advances, and they come with medical and health drug treatments which we welcome, but they come with a huge cost. We need to sort out who is going to be doing that and who is going to make the decision about what is going to happen.

The other thing is that the government has a responsibility, particularly the minister, to go along to these COAG meetings and sort out this issue of cost shifting. It is not good enough, when you have a separation of areas of responsibility, for one side to be constantly trying to cost shift to the other—and I have seen it over a period of time with various ministers—to deal with the overloaded and banked up ambulances at emergency services in hospitals. What do the state governments do? They of course try to get you to go to the local GP so that the cost goes to Medicare and they pay the cost at the federal level.

You can have different types of treatment. Do you have surgical treatment at a public hospital and have long waiting lists, or do you give drug treatments, which is then a medication cost that is transferred either to private health insurance or PBS taxpayer funded treatment? This has to be sorted out. It is window-dressing, I suggest, for us to come up with a funding model of alleged transparency and accountability, and so on, and not deal with the big issues created by the tension of who is going to be responsible for what and who is going to actually pay for the new areas of medicine and development in this country. We will never resolve this issue—and in these situations we will go back to the Forbes-Playford fights, and all their successors—unless we deal with it seriously and act on it.

Finally, I will say this, and I know this will be dear to your heart, Madam Speaker: it concerns me that in addressing this model we have an extra level of bureaucracy, without getting rid of all these other institutes and so on—apparently. I have not seen any paring down of the Department of Health and Ageing in Canberra, that is for sure, or what is happening down at Hindmarsh Square. Nevertheless, we are going to be doing this, and that comes at a cost. The net amount of money that filters through to the Ceduna hospital or the Whyalla hospital, which are major regional hospitals that will have to pick up all these other services as local smaller hospitals like Balaklava get a bashing in reduction of services—the death by a thousand cuts—that is a cost.

The government at both levels is going to have to get serious about making sure that it identifies what it is duplicating here. If it is going to do it properly as a federal model, let us get it streamlined appropriately and let us support a model that is going to work and not just be worse and more costly.

Mrs REDMOND (Heysen—Leader of the Opposition) (12:01): It is a pleasure to rise to speak about the National Health Funding Pool Administration (South Australia) Bill. I want to put on the record some thoughts about this because during the last election campaign the Rann Labor government signed up to the earlier model. The Rann government immediately said, 'Yes, yes, yes, give us this system,' when the proposition was originally put by Kevin Rudd about the new funding arrangements for the health model, which has now been slightly adjusted into the model that is before us today.

I want to go back to that because I do not think there is any doubt that our money is not being spent as efficiently as it might be in relation to health. There is no doubt that the commonwealth gets the bulk of the money via taxation and that the states, on the other hand, have to pay the bulk of the bills, provide the health service and make it operate. I suspect there is a lot of money wasted in both the state government and the federal government in crossover and in administration of the moneys between them. To some extent it made some sense, I suppose, to say, 'Well, instead of the funding coming from the federal government to the states and then being disbursed, let's pay it directly to the hospitals.'

However, as someone who spent 28 years on the local hospital board in Stirling until after I became Leader of the Opposition, and I continued in that role, I have to say that I do not have any great confidence that those in Canberra would necessarily make decisions which were in the best interests of the people of South Australia. They tend to be very east coast focused. The more important point is the point that I got to when I went over to discuss this issue with the then minister for health, Nicola Roxon, who is now the federal Attorney-General.

The minister for health had given Mike Rann, the then premier of this state, a comprehensive briefing about these new proposed arrangements; we were actually in the caretaker period, but she had not bothered to give me a briefing. During the caretaker period, and during the election campaign, I took a day out and went to Canberra specifically to get a briefing from her. I remember that we did not get off to a fabulous start because, when I finally got a meeting with her, she had delayed that meeting until quite late. I went literally with the clothes I was wearing and a handbag. I flew to Canberra for the day to have a meeting with Nicola Roxon; I had booked to come home that night, but she did not give me a meeting until 6 o'clock at night, which meant I could not come home because there is only one flight a day from Canberra—

Mr Venning: No toothbrush.

Mrs REDMOND: I did not have a toothbrush. No, indeed, there were lots of things I did not have, so I spent most of the day trying to get organised to stay overnight in Canberra, which was no mean feat. I had to go shopping to buy clothes because I knew that when I got back I would be greeted by the media in front of the escalators in the airport, so I had to be in different clothes from those I was wearing the day I left, which had to match the handbag I had, nevertheless. I also had to buy make-up, a toothbrush and all sorts of things. Indeed, I had to—

Dr McFetridge: Unmentionables.

Mrs REDMOND: —unmentionables—find accommodation. As it happens, the day I went there was the day that the Indonesian President, Susilo Bambang Yudhoyono (SBY, as he is known), was giving the address to the joint houses of parliament. That is a fairly rare thing in our parliament—I think there have been only four or five occasions when someone has given an address to the joint houses—so lots and lots of people were there, and it was almost impossible to get a hotel room in Canberra. I did manage to get the very last hotel room in Canberra at a cost of some $549—I had no PJs to sleep in; it was a bit nippy. I got to sleep in the hotel room for only about four hours because I had to be up very early in the morning to go home again.

However, all that aside, the point of the exercise in going there was to get a briefing from Nicola Roxon. As I said, we got off to a fairly poor start because she came out and said, 'Well, if you'd made an appointment, Isobel, you mightn't have had to wait so long,' to which I responded, 'Well, if you'd actually briefed me in accordance with the requirements of the caretaker convention, I wouldn't have had to come to Canberra to get the briefing.' So, that was the beginning of a very unfriendly relationship.

However, Nicola Roxon did put me then in a room with three people from Treasury, from the health department and her office, and I was able to go through with them the essence of what this proposal was about—and it is that, really, that I want to put on the record. Ultimately, as I said, I recognise that we need to do a lot to improve the way in which the health dollar is spent. It already takes more than a quarter of our budget in this state, and it is likely to increase. We have an ageing population, and there is too much double-handling and not enough efficiency in the system. I have no argument with the fundamental idea that we need to do better, but I do have an argument with any fundamental idea that the feds would do it better for us in this state.

When I looked through the booklet that was published as part of this original package, it said very clearly that regional networks would be set up and that the money, instead of coming through the state to the hospitals, would go via those regional networks. When I cross-examined these people from the Treasury, the health department and Nicola Roxon's office, it became quite apparent that, although it said I think on about page 61 of the little booklet they had published that it would be local people, it became obvious that major amounts of money was going to flow directly from the commonwealth into each of these fairly large regional networks and, indeed, that the effect of it was going to be that they were not going to be local people at all—they might be local in the sense that they were South Australian—but basically they were going to be very highly paid bureaucrats.

Furthermore, those bureaucrats who set up the regional network were then going to have a CEO underneath who was then going to do their direction. Of course, the CEO was not personally going to be able to do whatever was directed, so there was going to be yet another bureaucracy established—so we are already putting two new bureaucracies into this—and, what is more, the commonwealth was insisting that the money that was coming through from it had to not fund the existence of those bureaucracy, thus our own health budget in this state would be significantly depleted in providing more bureaucrats—and that is the problem with the health system generally.

I have heard the member for Morphett, when he was the shadow minister for health, talk on any number of occasions about the problem that we were putting all our money into bureaucrats, not beds—and therein lies the dilemma of what is proposed. I note that when you go through the bill, of course, a couple of funds are set up: the state pool accounts—the national health funding pool and then separately the state managed fund.

Whilst it is all very well to say that these funds will exist and that these funds will be applied to the purpose of health in this state, my huge suspicion and fear is that the reality is that these funds will not just manage themselves by some magic. Although a person is appointed in each case—the chief executive is to open and maintain with the Reserve Bank of Australia a separate bank account, for instance, with the state pool account so there is certainly provision for someone who is going to be officially the manager—the reality is that there will be any number of highly paid bureaucrats involved in managing each of these funds, and therein lies the problem I have with it.

We are going to support it because I think there are consequences from not supporting this legislation, particularly in terms of how much money we stand to miss out on. That is the way in which this commonwealth government tends to run: it basically holds a gun at your head and says, 'Either you agree to these provisions or we won't give you any money.' There is no doubt that we need to put this legislation through so that we can get the money put into the state generally, in terms of providing the infrastructure that we need for health, but I remind the house that way back when it came to office this government decided it needed to look at the whole of the health system and provision of health in this state.

It engaged John Menadue to come over from New South Wales and do a report, the results of which I think were self-evident before they were actually delivered. They were that we cannot afford to keep putting money into building acute-care infrastructure; what we have to do is put our money, substantially more money, into providing primary health care out in the community. The problem has been, all along, that rather than acting on that the government has, for the last nine of its 11 years here, basically put that aside and spent all its money on building infrastructure, to the neglect of things like country health.

We have recently had the good fortune that the government has finally done a bit of a reverse backflip, double or triple pike with somersault, over the Keith hospital funding, and has given the hospital a bit of its funding back. However, for the most part the government has not provided funding for country health at the level it should be provided. I think it is a disgrace that this government has focused so much on metropolitan Adelaide to the exclusion of those in our rural communities and it is certainly our intention, when in government, to refocus so that people in regional parts of South Australia feel they have a reasonable equity in all systems, not just health—but at the moment I am talking only about health.

The main point I want to make is simply this: whilst the funding model proposed may sound all very well in theory, the reality of its practical implication and practical application is that we will end up with masses more bureaucracy rather than lots more doctors, nurses, psychiatrists, psychologists and all those other people we need out on the ground in our communities, providing health care. I would not have minded if the commonwealth government had simply said, 'Look, here's the money; you have to apply it directly out to those primary health care services,' but the setting up of these different funds, outlining in legislation what those funds are to be used for, and, more particularly, outlining who is to manage them, will, I think, create yet another bureaucracy that we simply cannot afford to have in this state.

For those reasons I wanted to put my comments on the record. I think this is probably a slightly better system than what was originally proffered by then prime minister Rudd but, at the end of the day, I think the same fundamental problem arises: that is, we are spending far too much of the health dollar on providing bureaucracy rather than providing care for the people in our community who so desperately need improvement in that care, whether they be in metropolitan Adelaide or in the regional parts of South Australia.

Mr VENNING (Schubert) (12:13): I want to make a few comments about this, because no discussion on funding for country hospitals can be debated in this place without me raising my dire concern about the level and priority of funding for country hospitals in South Australia generally and, in particular, funding for a new Barossa health facility. The federal government has been lobbied, and we twice applied for funding in the recent round of funding, the federal government's health and Hospital Regional Priority Round. It was completed only a few months ago, and we applied. I know that the minister did as well (he may remember the title; I do not), so we both had a go but we were not successful.

We know that we at least now have access to a business plan, which the minister tabled in the parliament about nine months ago, for a new Barossa hospital to replace the ageing facilities at both Angaston and Tanunda. I remind the house, and you would be aware, sir, as a member with an adjoining electorate—indeed, some of your constituents would go to the Barossa hospital, and I invite you to come and have a look—of the history of this project.

The previous Liberal government promised in the 2002 election to begin construction of a new hospital then to be situated in Nuriootpa at Reusch Park on land owned by the Housing Trust. The then minister, Dean Brown (who also happened to be the minister for the Housing Trust) made the land available and he gave me a written commitment in a letter, which I still have. I have no doubt that if the Liberal government had been returned we would have a new Barossa hospital, which would have been completed in about 2006 or 2007; preliminary work had been done and money had been spent.

Since then, we have seen the election of the Labor government and the funds allocated were immediately redirected back into the metro area and nothing has been heard of it since. Now all the funds for the next 15 to 20 years will go toward paying for the new RAH on the rail yard. So this highlights a lot of talk, a lot of platitudes, even encouragement but nothing happens about funding for country hospitals, particularly this issue of the Barossa hospital. We all know what has happened to Keith, Moonta and Ardrossan: penny-pinching in the extreme. I am just very pleased that these hospitals still exist and have risen above the politics of the day, because they are extremely important facilities in these small country communities—and I am amazed at the attitude of the government.

I spent four years on the Public Works Committee from 2002 to 2006 and we had an inquiry, that I instigated, on the priorities of the government's health rebuilding program and the refurbishment program. Evidence tendered to the committee (and it is on the record) shows quite clearly that, way back in 2004, the Barossa hospital was up on top, level with the Murray Bridge Hospital as the highest priority. As we know, Murray Bridge has been upgraded already, so that is done, but the Barossa just lingers on with nothing happening but a few very minor works—very minor; a couple of hundred thousand dollars and that is about all.

The Tanunda hospital, although old, is still in reasonable order. It was originally built as a hospital, not like the Angaston Hospital, which is a primary health unit with acute beds. It is a disgrace. It was built as a house and has been built on four or five times. It grew like Topsy—a real itsy-bitsy facility. As I said, it was never built as a hospital; it is a converted house on several different levels and angles. There has been no major expenditure for over 15 years because, as everybody agreed, this facility was not worth spending money on—and I agree—so we are now in a facility that is aged.

I do not believe it meets any health standards. If you go around to the back of this building you would be horrified to see the standard of it. I am amazed at the level of service people receive at this hospital from the wonderful staff there. I take my hat off to them and pay them the highest tribute, because the quality of service given there is fantastic. It is like putting a Ford Model T in the Clipsal 500 and winning. That would take an effort. That is what is happening in this instance. I am not joking. It is not an exaggeration; it is appalling. I know the minister has not been there for a few years now and I would like him to come back again and have a look, because it is just not satisfactory.

So what to do? If the government will not commit to a new facility—and I remind the house that the Barossa community, to its credit, agreed to have one facility in place of two, which I think is an incredible achievement, knowing the parochial feeling in the Barossa from the towns, that they agreed—

The DEPUTY SPEAKER: Can you get close to the bill before us? Even remotely close would be nice.

Mr VENNING: Sorry.

The DEPUTY SPEAKER: No, not the microphone; get close to the bill rather than the microphone.

Mr VENNING: Alright. I was not listening; sorry, sir. In relation to the federal and state funding, local government has become involved in this now, too, because it has offered to donate the land for a new facility. Of course, that land is immediately adjacent to the marvellous new Barossa Aquatic Fitness, the Rex, centre to form a precinct of health and wellbeing—so even with all this there is still nothing. As with this bill, it does give effect to financial management and reporting mechanisms under the COAG National Health Reform Agreement—so I tie it in this way. As we know, the agreement commits through both federal and state governments to a model of activity based funding of the public hospital system, shifting away from the block funding of the public hospital system that we have known in the past.

The Barossa is a growth area in our state and very much ageing—South Australia's retirement village, and I say that respectfully—so surely this hospital should be assessed under this new activity based funding. I am very pleased that the shadow ministers, the members for Waite and Morphett, have both visited this hospital in recent times; the minister visited some four or five years ago.

The Hon. J.D. Hill: I've been there a number of times.

Mr VENNING: And you were certainly welcome with me on that occasion—but it really annoys me that I have to get approval to visit a hospital in my own electorate.

The DEPUTY SPEAKER: Member for Schubert, get back to the bill. You mentioned that before.

Mr VENNING: It's health.

The Hon. J.D. Hill: Unless you need emergency care. You don't need my permission, if you need an emergency.

Mr VENNING: Whatever. I heard what the minister said and I hope Hansard heard it, too. Back on the subject, sir, seeing that there is a state/federal link involved with this bill, that is exactly what I am talking about. Seeing I have had no success in the state sphere, I will now take the battle to the federal government, especially as we have a precedent by the federal government directly funding a state hospital—that is, the Mercy Hospital in Tasmania, at the last election. This brings in the question about the whole bill here: will we see direct funding? I would never agree to that because I am a statesperson, a federalist, but when you see the waste that has been going on in the system, if it saves the dollars, I have to say that I would have to agree.

If all else fails, I will reinvite the existing federal members—Nick Champion (member for Wakefield), Patrick Secker (member for Barker) and the member-elect, Tony Pasin, and various state senators from both sides—and, after what has happened, I will then invite the federal minister Nicola Roxon to visit at a time of her choosing. I will be as nice as I can. I welcome her to see and comment about the situation, as well as enjoy some wonderful Barossa hospitality.

I have nearly exhausted all avenues but not quite. I will not give up and I will not give in for the whole time that I remain in this place. It is another issue in the Barossa Valley and it is high in Schubert. I note the second reading of this legislation but, as the leader said, we are very much concerned at the level of bureaucracy that is in our health system. When you have a body funded by both governments, you have to be very careful about who is watching who is spending. Who is the watchdog here? Money comes to the federal government. We, in the state government, cannot just say, 'Okay. Easy come, easy go.' I believe that we have to be a lot more professional in what we do.

When the Liberals come into government, we have to find some huge level of savings, and I think this is where it is. It is not in the wards, not in the hospital beds: it is in the middle order management of the health facilities, particularly areas like mental health. As I said to the minister during estimates, I am amazed that the last seven appointments in the mental health area, particularly in relation to—

The Hon. J.D. Hill: This is a claim, this is untrue.

Mr VENNING: Seven New Zealanders.

The Hon. J.D. Hill: It's not true.

Mr VENNING: It's not true. The minister says it is not true. I will chase it up. I will accept the minister's—

The Hon. J.D. Hill: You can't make claims that are untrue.

Mr VENNING: It has been told to me by a person who knows. The last seven appointments have all been New Zealanders. I will check and if I am wrong, minister, I will apologise. The opportunity is there, Mr Deputy Speaker, and thank you for the indulgence for me to be allowed to raise this issue again. I know that if the minister could, he would help, but it is all about political priorities. For the time I have left here, I am going to advance this thing. I do not give up. I am still sort of confident, but I am not holding my breath.

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