Australian Government, 2010‑11 Budget

Statement 1:
Budget Overview

A National Health and Hospitals Network

The 2010‑11 Budget invests $2.2 billion over four years in the Government's health and hospital reform, taking the total investments to $7.3 billion over five years to support the National Health and Hospitals Network (NHHN).1 In addition, the Government has guaranteed to the states and territories no less than $15.6 billion between 2014‑15 and 2019‑20 in top‑up payments for growth.

Additional investments

After‑hours access to general practitioner and primary care through Medicare Locals

The Government is investing $290.5 million over four years to establish Medicare Locals across the country. They will be responsible for identifying service gaps in local areas and will play a vital role in improving the coordination of primary care, hospital and aged care services. Over time it is expected that their roles will expand further.

The Government is also investing $126.3 million over four years to establish a national after‑hours general practitioner (GP) service. These services will mean people seeking medical advice after hours will be able to speak with a registered nurse and a GP if required, and arrange face‑to‑face consultations.

GP Super Clinics

The Government is investing $355.2 million over three years to increase the number of GP Super Clinics across the country. This measure builds on the $275.2 million for 31 GP Super Clinics announced in the 2008‑09 Budget.

This investment will provide infrastructure funding to establish a further 23 new GP Super Clinics and upgrade around 425 existing general practices, primary and community health services, and Aboriginal Medical Services. The additional GP Super Clinics will make it easier for people to access high‑quality and comprehensive primary care services in one community location.

Personally controlled Individual Electronic Health Records

The Government will provide $466.7 million over two years from 2010‑11 to establish the key national components of a personally controlled Individual Electronic Health Record (IEHR) system. This will be a secure, online system that enables health care providers to access and use an individual's health care record when and where it is needed, as long as they have given their consent.

This modernisation of our health system will boost patient safety, make it easier to navigate the health system and slash waste and duplication.

Training more doctors, more nurses and allied health professionals

The Government is announcing further investments in this Budget of $522.7 million over four years for Australia's nursing workforce. This is in addition to the $650.7 million over four years already announced to provide more general practice specialist training places, more GP training rotations for junior doctors, a rural locum scheme and additional clinical training for allied health professionals.

New workforce initiatives include:

  • $390.3 million over four years to improve financial support for nurses in general practices to help expand their role in primary care, particularly in prevention and chronic disease management; and
  • $128.4 million over four years for training and education incentive payments for nurses and personal care workers in aged care; to allow rural nurses to take leave; to build nursing careers in aged care; and to evaluate nurse practitioner models in aged care.

COAG agreement on the National Health and Hospitals Network

The new investments in this Budget build on the COAG agreement with seven states and territories to establish the NHHN. This will deliver the most significant reforms to our health and hospital system since the introduction of Medicare. These reforms will deliver better health and hospital services by:

  • for the first time, the Commonwealth becoming the majority funder of the Australian public hospital system;
  • taking full funding and policy responsibility for GP and primary care (including primary mental health) and aged care;
  • leveraging the Commonwealth's majority funding responsibility to set tough new performance standards including for access to emergency departments and for elective surgery;
  • devolving responsibility for running hospitals to Local Hospital Networks (LHNs) and establishing Medicare Locals and aged care one‑stop shops, to ensure that services are coordinated within the community;
  • driving transparency and efficiency by paying LHNs an 'efficient' price for each individual service delivered through activity‑based funding (rather than a single block payment for hospital services); and
  • investing in training more doctors and nurses and providing more allied health services, primary care services and hospital beds.

The Commonwealth will fund its increased responsibilities through a combination of the current national Healthcare Specific Purpose Payment and an agreed amount of GST dedicated and retained for health and hospital services. From 2014‑15, an additional top‑up payment will also be paid to the states and territories from the budget.

To support its majority funding role, the Government is committing $400.0 million over five years to deliver a national framework for standards and performance and fast‑track the introduction of activity‑based funding. This will:

  • drive efficiency and improve the allocation of hospital resources by establishing an Independent Hospital Pricing Authority to determine the national efficient price of public hospital services;
  • introduce and report on tough new national standards, including in relation to financial performance, through the establishment of the National Performance Authority; and
  • improve health system safety and quality by setting national clinical standards through the continuation and expansion of the Australian Commission on Safety and Quality in Health Care.

This investment will ensure nationally consistent performance monitoring and reporting against the new national standards. Over time this will improve the efficiency, effectiveness and quality of services at the local level and of the system overall. This will make for a more responsive health system.

Reducing hospital waiting time and expanding capacity

The Government is establishing LHNs as the direct managers of single or small groups of hospital services and their budgets. The Government will improve hospital performance by:

  • rolling out from January 2011 a new four‑hour National Access Target for emergency departments. Patients in all triage categories, where it is clinically appropriate to do so, presenting to a public hospital emergency department will, from 1 January 2015, be admitted, referred for treatment or discharged within four hours of presentation;
  • introducing National Access Targets and Guarantees for elective surgery in public hospitals such that from July 2012, patients will be entitled to the Guarantee for elective surgery, meaning that free treatment will be rapidly provided if patients wait longer than the clinically recommended time. From January 2015, 95 per cent of patients waiting for elective surgery will be treated within clinically recommended times; and
  • delivering 1,300 new sub‑acute hospital beds by 2013‑14.

Improving general practitioner and primary care

As well as taking full funding and policy responsibility for GP and primary care services from 1 July 2011, the Government is making a number of investments to improve access to high‑quality, well‑integrated GP and primary care services through establishing Medicare Locals and providing better access to after‑hours GP and primary care services.

To address the growing burden of chronic disease in Australia and take pressure off the hospital system, the Government is investing $449.2 million over four years to improve the quality of care for patients with diabetes and prevent them from being admitted unnecessarily to hospital.

Better supporting older Australians by investing in aged care

For the first time, the Government is assuming full responsibility for aged care, including transferring aged care services from the Home and Community Care program to the Australian Government (with the exception of Victoria).

The Government is investing $532.9 million over five years to increase the capacity of the aged care system to support additional places and for additional primary care services in residential aged care.

Investing in mental health

As part of the NHHN, the Government is assuming full funding and policy responsibility for primary mental health care services for people with mild to moderate disorders.

This includes immediate investments to expand the headspace and the Early Psychosis Prevention and Intervention Centre programs for young people, and funding for more mental health nurses.

Preventative health — reducing the harm from tobacco

Tobacco smoking is the single largest cause of premature death and disease in Australia and kills over 15,000 Australians each year.

As part of the Government's commitment to reduce the prevalence of smoking, from 30 April 2010 it increased the excise and excise‑equivalent customs duty rate applying to cigarettes by 25 per cent. This will provide an extra $5.0 billion in customs and excise revenue over five years that, along with existing customs and excise revenues from tobacco, will support the costs of health reform through the NHHN Fund.

Based on recommendations of the National Preventative Health Taskforce, the Government will legislate to remove tobacco advertising and promotion from tobacco packaging from 1 January 2012.

Fully funded health and hospital reform

In addition to using the revenue from the increase in tobacco excise and excise‑equivalent customs duty applying to cigarettes to support the NHHN, the Government is taking responsible decisions to ensure that health reform is consistent with the medium‑term fiscal strategy.

Better value medicines

The Government is introducing reforms to the pricing of medicines under the Pharmaceutical Benefits Scheme. These reforms mean better value for money through expanded price disclosure arrangements and price reductions on medicines subject to market competition, with savings of around $1.9 billion over five years from 2010‑11.

The Government has also concluded the Fifth Community Pharmacy Agreement with the Pharmacy Guild of Australia. The new agreement will deliver a net saving of $0.6 billion over the five‑year life of the agreement, which will commence on 1 July 2010. The new arrangements will support the community pharmacy network and more patient‑centred services, while also providing better value for money.

Improving the sustainability of support for medical expenses

To improve the long‑term sustainability of the net medical expenses tax offset, the Government is increasing the threshold above which a taxpayer can claim the net medical expenses tax offset to $2,000 and will commence annually indexing it to the Consumer Price Index, with effect from 1 July 2010. These reforms will result in savings of $350 million over four years.

The threshold was last increased in 2002 and has not been indexed since that time. The number of people claiming the net medical expenses tax offset has grown by, on average, 12 per cent per annum while total claims have grown by 16 per cent per annum over the period to 2008.

1 The total amount of these investments is based on a national roll out of the NHHN.

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