Premiers say the Commonwealth’s latest health deal leaves them tens of billions out of pocket. The feds insist they’re wrong.
States and territories have shot back at the Commonwealth’s latest health funding offer, saying it’s tens of billions less than what they need.
The Council for the Australian Federation (CAF), made up of state and territory leaders, met this week to talk about national health and disability reform.
On the agenda was the National Cabinet agreement agreed in principle in December 2023. At the time, the Commonwealth committed to fund 42.5% of public hospital costs by 2030 and 45% by 2035.
“Under the arrangement now proposed by the Commonwealth, the actual share of Commonwealth funding will be closer to 35 per cent, falling tens of billions of dollars short of what is needed,” the meeting communique said.
“States and territories are acutely aware of the need to manage growing cost pressures and activity demands on public hospitals. First Ministers noted that these increases are largely driven by factors outside the states’ control.
“These factors include the high-inflationary environment following the pandemic, clinical workforce shortages, increased complexity and frailty of patients, and growth in ‘stranded’ patients that cannot access suitable aged or disability care.”
The federal government disagreed. A government spokesperson told HSD:
“The Commonwealth remains committed to the December 2023 National Cabinet deal; and we are committed to making a fair contribution under the hospital funding agreement to give Australians better access to health services they need, when they need them and to reduce pressure on hospitals.
“The Commonwealth’s most recent offer to states included an additional $20 billion over five years in Commonwealth funding for public hospitals.
“This is a $7 billion increase from the Commonwealth’s most recent offer to states.
“The additional $20 billion on offer is on top of the $195.1 billion the Commonwealth is already expected to contribute to public hospitals over the five years from 26-27.”
State and territory leaders have continued to make their feelings known over the past 24 hours.
NSW Premier Chris Minns questioned the figures:
“I can’t explain how they’ve gotten to those numbers. Commitments were made, particularly around the reforms to the NDIS that would see the percentage share of Commonwealth funding for major public hospitals lift by the Commonwealth government,” he said.
“They can’t have it both ways, we can’t have hundreds of patients who are in New South Wales public hospitals that should be discharged and at the same time see a net reduction in the amount of money that the Commonwealth is prepared to give to states.”
Queensland Premier David Crisafulli said it wasn’t fair.
“It shouldn’t be up to a level of government that only has a small portion of tax revenue to pay for a lion’s share of health, it doesn’t work,” he said.
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“When the pressure continues to be pushed back on state governments, it’s not fair, and that’s why collectively we’re standing up and saying sorry Canberra, you’ve got to do more.
“You’ve got to uphold your end of the bargain when it comes to aged care, and you have to make a financial contribution to make sure that our health system runs properly.”
Tasmanian Premier Jeremy Rockliff said it would cost his state some $673 million over five years.
“That’s the equivalent of 128,000 elective surgeries. That’s the equivalent of 1.2 million emergency department presentations,” he said.
The leader reiterated that they’re keen to work with the Commonwealth, particularly to get the NIDS back on track “including through the 2023 agreement to jointly fund, design, and commission additional foundational supports. This was a critical part of the December 2023 agreement.
“First Ministers are concerned, however, that the combined health and disability reforms will not meet National Cabinet’s agreement that states would be better off overall. This will have a real impact on the ability of states and territories to provide the services that Australians rely on every day,” the ministers said in their communique.
The federal government hopes to have a deal finalised soon.
“The Commonwealth is prepared to negotiate in good faith and looks forward to discussing the offer with states,” said the spokesperson.
“We want to see it finalised by the end of the year.”
Looks like it’s back to the negotiating table.