Commonwealth cuts share of health costs

Report reveals federal government cuts spending on health.

Federal Minister for Health, Tony Abbott, used the tragedy of a woman miscarrying in a public toilet in the emergency department at RNSH as an opportunity to conjure an intense political storm in the first weeks of the federal election campaign, repeatedly blaming the Labor State Government for what it described as crisis in public hospital emergency departments.

Now a report by the government’s own Australian Institute of Health and Welfare shows the federal government has steadily cut its share of hospital funding by 10% over the past decade.

The Health Expenditure Australia 2005-06 report shows that between 1996 and 2006, the Australian Government’s share of public hospital funding decreased from 45% to 41%. State and territory government funding during this period increased from 46% to 51%.

If the government had maintained its share of public hospital funding, an additional $1.6 billion would be available to public hospitals, according to Labor Health spokesperson Nicola Roxon.

The decline in spending on public hospitals roughly equals the $3.2 billion a year the government spends on the 30% rebate for private health insurance.

Abbott admitted on Channel Nine’s Today program: ‘Oh, there’s no doubt that the states have been increasing their spending faster than the Commonwealth … our share of public hospital spending has not been growing as fast as the states’ share.

To which Julia Gillard replied: ‘Tony has spent weeks blaming state Labor governments for the condition of public hospitals and here we learn today that the Commonwealth’s share is going down; that the rate of growth in Commonwealth spending is far less than the states’.

This report says that the share of the Commonwealth funding is at the lowest level for 11 years. So with this blame game, we shouldn’t be playing it, we should be getting it fixed but it’s hardly fair for Tony to blame the states.’

‘Oh, the poor, poor darling states …’ retorted Tony Abbott.

The report also revealed that private health insurance funds contribute a declining sharing of health funding – from 11% in 1996 down to 7% today.

Yet the contribution of health costs by individuals is escalating. There has been a 6% increase in expenditure by individuals between 1995 and 2006. In 2006, individuals spent an estimated $15.4 billion on health goods and services (17% of total health expenditure), compared to $9 billion in 1996. On average, Australians spend $750 out of their own pockets on health care.