Wednesday, 28 August 2013

About that $1 billion that Abbott states was never cut from federal health funding

On 7 October 2003 the current Federal Leader of the Opposition Tony Abbott became Minister for Health and Aging in the Howard Government – a position he held until December 2007.

These are the facts about the Australian Health Care Agreements 2003-2008 :

Each of the predecessor Agreements provided indexation formulae to account for growth and ageing of the population. The 1998–2003 Agreements also recognised that there was further "utilisation drift", that is increases in utilisation were occurring in the hospital sector over and above that which can be explained by population growth and ageing. This utilisation drift was in part the result of new technologies that allowed for treatments for conditions for which there was previously no hospital treatment. Utilisation also increased because of shifts in treatment from general practitioners' rooms and other ambulatory settings to same day hospital admission.
The 1998–2003 Agreements provided an escalation factor of 2.1% per annum over and above the growth caused by the increase in the rate of population for key elements of the grant. The 2003–08 Agreements reduced the utilisation drift factor to 1.7% and narrowed the applicable components of the grant, saving the Commonwealth Government about $1 billion from that provided for in the Forward Estimates. This reduction in growth provision was vociferously opposed by States and also by clinicians who were experiencing significant financial pressures on hospitals as a result of State Government funding constraints

In a 26 October 2007 radio interview with Mike Carlton, Tony Abbott admitted that there had been “a forward estimates adjustment” and agreed that “the share of federal government [health] funding has gone down from 45 per cent to 41 per cent since 1996”.

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