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Senate Committees

Budget estimates 2000-2001 Report

June 2000

ISSN 1323-3750

Download this report as a single file (PDF 118KB)

Senate Community Affairs Legislation Committee Secretariat

Mr Elton Humphery
Secretary
The Senate
Parliament House
Canberra ACT 2600

Phone: 02 6277 3515
Fax: 02 6277 5829
E-mail: community.affairs.sen@aph.gov.au
Internet: http://www.aph.gov.au/senate_ca

Membership of the committee

Senator Sue Knowles, Chairman	LP, Western Australia
Senator Lyn Allison, Deputy Chair	AD, Victoria
Senator George Brandis	LP, Queensland
Senator Kay Denman	ALP, Tasmania
Senator Chris Evans	ALP, Western Australia
Senator Tsebin Tchen	LP, Victoria

Former Member during the Committee’s consideration of the Budget Estimates

Senator Brett Mason

LP, Queensland

Senate community affairs legislation committee

Budget estimates 2000-2001

Report

Introduction

1.1 On 9 May 2000 the Senate referred the following documents to the Committee for examination and report in relation to the portfolios of Health and Aged Care, and Family and Community Services:

particulars of proposed expenditure for the service of the year ending on 30 June 2001 [Appropriation Bill (No. 1) 2000-2001 and Appropriation Bill (No. 2) 2000-2001].

1.2 The Committee has considered the expenditure of the portfolios set out in their respective Portfolio Budget Statements 2000-2001. Explanations relating to the estimates were received from Senator the Hon Amanda Vanstone and Senator the Hon John Herron, representing the Minister for Health and Aged Care and Senator the Hon Jocelyn Newman, Minister for Family and Community Services and officers from the portfolio Departments at hearings held on 22, 23 and 24 May 2000. The Committee expresses its appreciation for the assistance of the Ministers, Mr Andrew Podger, Secretary, DHAC and Mr Jeff Whalan, Deputy Secretary, DFaCS, and the officers who appeared before it.

1.3 In accordance with Standing Order 26, the Committee has agreed that the date for submission to the Committee of written answers or additional information relating to the expenditure was 19 June 2000. The Senate agreed on 30 November 1999 that the dates for supplementary hearings of the Committee to consider the 2000-2001 budget estimates are 29 November 2000 and, if required, 1 December 2000. The final date for lodgement of notice of matters which Senators wish to raise at the supplementary hearings of the Committee relating to the written answers or additional information, or otherwise relating to the proposed expenditure, is 23 November 2000.

1.4 The Committee discussed many of the Budget measures and information contained in the Portfolio Budget Statements. These discussions are detailed in the Committee’s Hansard transcripts of 22, 23 and 24 May 2000, copies of which will be tabled in the Senate. Hansard transcripts of the estimates proceedings are also available on the Internet. Volumes of Additional Information received by the Committee containing answers to questions taken on notice prior to, and at the Committee’s hearings, will also be tabled separately in the Senate. The Committee is working on procedures to enable material relating to the Additional Information to be available on the Internet.

Departmental briefings

1.5 Members of the Committee have taken the opportunity to obtain briefings from areas in both Departments and thank the officers who have made themselves available for these briefings.

Accrual budgeting

1.6 The Department of Health and Aged Care has restructured its outcomes. The Secretary, Mr Podger, advised the Committee of reasons for these changes to the structure of the Portfolio Budget Statements in the second year of the accrual based budget system. The former Outcome 10 dealing with Portfolio leadership has been removed to allow for corporate activities to be attributed across the nine outcomes, while specific activities contained in the former Outcome 10 have now been attributed to the relevant Outcome. The number of output groups for Departmental expenses had been reduced from seven to six, with the renaming of some in order to minimise duplication and to improve clarity.[1]

1.7 DHAC was predicting that expenses for the 2000-01 financial year will be greater than appropriations and revenue from external sources. The Department is currently conducting an exercise with the Department of Finance and Administration (DOFA) to determine the extent to which the projected loss for 2000-01 is the result of historic errors in the calculation of the Department’s appropriations made in the transition to the accrual budgeting framework. This exercise would be followed by an output pricing review, also to be conducted with DOFA, which would assist with firming up the portfolio’s output price estimates and volume estimates.[2]

Answers to questions taken on notice

1.8 In its March 2000 report on the Additional Estimates 1999-2000, the Committee expressed dissatisfaction at the lateness of the provision of answers to questions on notice to the Department of Health and Aged Care. This unsatisfactory situation has continued. Based on evidence given to the Committee, major delays are occurring after draft responses are provided to Ministers’ offices and with their final clearance before being provided to the Committee.

1.9 Of particular concern was the area of aged care. The Committee was advised that of 83 questions taken on notice from the 2 May hearing, over 70 had gone to the Minister’s office with only 7 having been provided to the Committee. This situation was especially unsatisfactory due to an undertaking having been given at the previous hearing that on specific issues relating to aged care the Department would endeavour to respond ‘within a matter of days if at all possible’.[3]

1.10 Following the Committee’s dissatisfaction with this matter having been raised at the commencement of the day’s hearing and the Chairman’s direct intervention with the Minister for Aged Care’s office (after the Committee had suspended the hearing for a short private meeting to discuss the matter), a further 67 answers were progressively provided during that day’s hearing.

1.11 In addition to the delays in responding to questions, concern was expressed at the quality of some responses that were received. The effective operation of the Committee’s estimates process was being frustrated by having to reask unanswered questions and needlessly spend time returning to issues which had not been satisfactorily answered in written responses.[4]

1.12 As of 20 June 2000 DHAC still had 52 answers outstanding from the 2 May hearing and no answers had been provided from the Budget hearings. DFaCS had provided answers to all but 2 of the questions taken on notice during the Budget hearings.

Issues

1.13 The Committee discussed a range of issues with both portfolio departments, however a considerable amount of time was spent discussing two particular issues with the Department of Health and Aged Care - MRI and nursing homes. A number of important administrative and process issues were raised in these discussions

Magnetic Resonance Imaging (MRI)

1.14 On 11 April 2000 the Committee reconvened on the instruction of the Senate to consider issues relating to Magnetic Resonance Imaging (MRI), including matters arising from the previous additional estimates hearing held on 7 February 2000. Since these hearings, the Australian National Audit Office (ANAO) has published its report Magnetic Resonance Imaging Services - effectiveness and probity of the policy development processes and implementation.

1.15 The DHAC Secretary, Mr Podger, commented on the ANAO report, advising the Committee that the Auditor-General had correctly identified some shortcomings in Departmental processes and that the Auditor-General’s comments were accepted by DHAC ‘in some areas but not in others’. Mr Podger addressed the main findings in the report, which were the lack of documentation, the management of probity arrangements, and the approach to risk management.[5]

1.16 Mr Podger made the following concluding observations in a statement to the Committee on MRI issues:

It is my firm view that the overall objectives for diagnostic imaging, including MRI, have been met. I am of a view that the framework in place is constraining the level of spending for diagnostic imaging as a whole. For the first time we have an agreement with the college which gives us a framework for addressing underlying growth pressures. Those pressures are substantial and undoubtedly greater than were expected at the time of the 1997-98 budget. I believe growth in diagnostic imaging will decline from around 10 per cent per annum prior to the agreement, to an average of 5.5 per cent over the period of the agreement, which has been extended from three years to five years in the last budget.

we probably underestimated the underlying growth pressures in 1998, but with the agreement we have been able to turn that around, particularly in the last 12 months. There has been a marked improvement in access to MRI and in the overall quality of diagnostic imaging services also brought about by the agreement.[6]

Nursing homes

1.17 The Department of Health and Aged Care was questioned at length regarding a number of nursing homes and the response to specific complaints by the Department and the particular nursing homes involved. The operation of the complaints mechanism process of accreditation, certification, the rapid response teams undertaking spot checks of nursing homes, and the Complaints Resolution Scheme was also discussed in detail.

1.18 The Committee raised with DHAC the issue of delays in actioning a response and also the processes which, in some cases, had finally triggered a response to specific complaints - some of a very serious nature involving the deaths of residents of nursing homes. The Department was particularly questioned on the processes involved and the apparent time lag in acting on complaints which involved very serious allegations including lack of care and the proper treatment of patients, especially at Alchera Park and Riverside nursing homes.[7]

1.19 Senators expressed concern that there appeared to be problems in terms of interagency contact and the way in which complaints were being dealt with, in particular, the apparent failure of proper systems being in place to enable the cross-referencing of complaints from State bodies to the Aged Care Complaints Resolution Scheme. The role of coroners, courts and the police was also queried in relation to their handling of serious complaints. It appeared that under the present system serious complaints could be falling between the cracks of responsibility and may not be followed through by the relevant agencies.[8] The Minister undertook to follow up on the matter of responsibilities of the different agencies.[9]

1.20 Another case related to inquiries over the suitability of a person to hold provider status under the Act. The Department was questioned as to the reasons why it had taken 18 months to respond to an anonymous complaint alleging that the proprietor of a nursing home had been charged with criminal offences and secondly, whether it was appropriate for the Department to respond by writing to the provider seeking comment on the allegation. The Department explained to the Committee that because the complaint had been provided anonymously there was no process of going back to the complainant and the only way the matter could be dealt with was to work with the proprietor to see if the allegations could be substantiated. The proprietor had subsequently refuted the allegation and the Department was now in the process of checking court records.

1.21 DHAC was unable to provide the Committee with a satisfactory reason as to why there was a delay of 18 months before action was taken on this complaint, despite the matter appearing in the press on more than one occasion. The Department advised that a more focused compliance complaints process had been put in place recently and part of this process involved ‘picking up issues which had not been rigorously progressed’.[10] The Committee will be closely monitoring the operation of the nursing homes complaints mechanism.

Senator Sue Knowles

Chairman
June 2000