Commonwealth of Australia Explanatory Memoranda

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HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2002

2002


THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA


HOUSE OF REPRESENTATIVES

HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2002

EXPLANATORY MEMORANDUM



(Circulated by authority of the Minister for Health and Ageing,
Senator the Hon Kay Patterson)

HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2002

OUTLINE

This Bill proposes amendments to the Health Care (Appropriation) Act 1998.

These amendments allow the Commonwealth to discharge its financial responsibilities under the 1998-2003 Australian Health Care Agreements (AHCAs). Under the AHCAs, the Commonwealth provides financial assistance to the States and Territories for the provision of public hospital services.

The amendments will:

• increase the maximum amount the Minister may grant by way of financial assistance to a State, or to a hospital or other person under section 4 from $29,655,056,000 to $31,800,000,000; and

• require the Minister for Health and Ageing to present to each House of the Parliament, as soon as soon as practicable after 30 June 2003, a statement of the total amount of financial assistance paid under section 4.

The Act provides the legislative basis for grants of financial assistance under the AHCAs, including Health Care Grant and National Health Development Fund payments to the States and Territories and Commonwealth Own Purpose Outlays for mental health, palliative care and casemix development.

Subsection 4(3) currently provides that “The total amount paid by way of financial assistance under this section must not exceed $29,655,056,000.” This estimate of total grants of financial assistance was current as at 30 June 1998 when the Act commenced. However, since commencement the estimate has increased for the following reasons:

• the Government’s decision of August 1998 to offer the States and Territories additional funding under the 1998-2003 AHCAs;

• the Government’s decision of December 1999 to index Health Care Grants by Wage Cost Index No. 1; and

• other routine indexation changes.

Additionally, the Commonwealth’s financial responsibilities under the AHCAs have not reduced, as the Government has forgone its right to claw back any funding from the States, including private patient revenue above 1997-98 levels, in recognition of increased private health insurance coverage.

As a result, the maximum amount the Minister may grant by way of financial assistance, as currently provided for through subsection 4(3), will be reached in early 2003. The Bill will provide legislative authority for the Commonwealth to meet its responsibilities under the AHCAs to provide financial assistance to the States and Territories for the provision of public hospital services, and for the Commonwealth’s own purposes, until 30 June 2003 when the AHCAs expire.

The precise financial responsibilities of the Commonwealth will not be known until May 2003 when revised population data will be factored into the estimates, which will be submitted to the Minister for approval. The Bill therefore proposes to increase the maximum amount the Minister may grant by way of financial assistance under subsection 4(3) to $31,800,000,000, including an allowance of $68,306,000 above the current approved estimates for the five years to 30 June 2003 for unexpected population growth and rounding.

To ensure that the Minister is publicly accountable for the amount of financial assistance paid under the Act and that total payments do not exceed the requirements of the AHCAs, the amendment proposed in section 4 of the Bill will require the Minister to table, in both Houses of Parliament, a statement of the actual amount of financial assistance paid.

FINANCIAL IMPACT STATEMENT

The amendments will allow grants of financial assistance to be paid in accordance with section 4 of the Act but will not increase 2002-03 Budget estimates beyond routine updates to population data which will be factored into the estimates and submitted to the Minister for approval. There is no forward year impact as both the Act and the AHCAs expire on 30 June 2003.

HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2002

NOTES ON CLAUSES

Clause 1 - Short title

Specifies the short title of the Act as the Health Care (Appropriation) Amendment Act 2002.

Clause 2 - Commencement

Provides that the Act commences on the day on which it receives Royal Assent.

Clause 3 - Schedule

Ensures that the amendments, repeals and items in the Schedule can take effect.

SCHEDULE 1

The Bill comprises only one Schedule that amends the Health Care (Appropriation) Act 1998.

Item 1

Amends subsection 4(3) to increase the maximum amount the Minister may grant by way of financial assistance by omitting “$29,655,056,000” and substituting “$31,800,000,000”.

Item 2

Inserts a new subsection 4(5) that requires the Minister to present to each House of the Parliament, as soon as soon as practicable after 30 June 2003, a statement of the total amount of financial assistance paid under section 4.

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