The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

18 December 2012

Dishonest Campaign on Victorian Health Funding Must End

Joint media release with
the Hon Tanya Plibersek MP
Minister for Health

The Victorian Government must immediately cease their intentionally deceptive campaign about Commonwealth health funding in the state.

There has been an unprecedented injection of health funding to Victoria since Labor came to office in 2007 and suggestions to the contrary are as shameless as they are shameful.

The fact is this:

Funding Victoria receives for health services from the Australian Government is growing by over $900m over the next four years - from $3.6bn in 2012-13 to $4.5bn in 2015-16 - that's a 26% increase.

Contrast this massive growth in federal funding for Victorian health with the cuts that the Baillieu Government is inflicting – ripping out $616m from Victorian health services.

Let's be clear - the Commonwealth is honouring the Intergovernmental Agreement (IGA) with Victoria that underpins these health funding increases, which were signed up to by all the States and the Federal Government in 2008.

The formula that reinforces this agreement is based on three components – ABS population data, the Australian Institute of Health and Welfare (AIHW) health price index which measures medical inflation, and a bonus index of 1.2 per cent on top of that to account for new technologies used in medical services.

This indexation was explicitly agreed to by Premier Ted Baillieu who signed the IGA in August 2011.

The Commonwealth has applied revisions arising from the final 2011 Census results to calculate population growth.

Having received the results of the 2011 Census, we now know that population estimates prior to this Census were overstated.

This has led to a lower than expected growth rate from 2010-11 to 2011-12. Had the population growth been higher than expected more funding would have been paid to Victoria than was previously estimated, consistent with our obligations under the IGA.

Victoria receives payment top ups at the end of the year, such as the $67m in additional GST they received last month when their 2011-12 entitlement was determined to be higher than advance payments made during that year.

The Commonwealth is required by the Federal Financial Relations legislation to ensure any overpayment or underpayment must be balanced when the final figures and data are known for the year.

The disingenuous campaign from the Victorian Government is in breach of the agreement that they have signed up to in full knowledge that they are the beneficiaries of an extraordinary level of health funding thanks to the Federal Labor Government – far greater than any indexation that was received under the Howard Government.

This is nothing but crass political manoeuvring from a state government which actively campaigned under National Health Reform negotiations to remain system managers of their own health system.

They should manage their hospital system and stop looking for someone else to blame for their mismanagement.