Commonwealth funding of public hospitals – Request to make a submission



16 December 2015

Mr Phil Bowen PSM FCPA
Parliamentary Budget Officer
Parliamentary Budget Office
By email:

Dear Mr Bowen

Request for submission - Senate Select Committee on Health

I am writing on behalf of the Senate Select Committee on Health. The committee has agreed to request from the Parliamentary Budget Office a submission in relation to Commonwealth funding of public hospitals.

The committee has recently held public hearings on this topic in Melbourne, Cairns, Rockhampton, and Sydney.1 Further to the evidence received during these hearings, the secretariat has been researching funding figures for states and territories, particularly for the period 2017-18 to 2024-25 during which Commonwealth funding will change from activity-based funding to block funding indexed to CPI and population growth. There does not appear to be a single comprehensive source of this information. The secretariat's broad findings are at Attachment A.

Drawing information from different sources may create difficulties, including the possibility that groups may be calculating the change in Commonwealth funding differently. In order to obtain reliable information, the committee has agreed to request the following information from the Parliamentary Budget Office:

  1. The reductions in Commonwealth hospital funding for 2017-18 to 2024-15 as a result of funding changing to indexation by CPI and population growth (by state) as part of the cancellation of the National Health Reform Agreement (NHRA)
  2. The reductions in Commonwealth hospital funding from 2014-15 to 2017-18 caused by the removal of funding guarantees under the NHRA (by state)
  3. The reductions in overall Commonwealth health funding between 2014-15 and 2024-25 caused by the cancellation of health-related National Partnership Agreements (by state).

Please contact me on 02 6277 3598 if you have any queries regarding this matter.

Yours sincerely

Stephen Palethorpe
Committee Secretary

1 For transcripts from the committee's hearing between 4 and 27 November, see the committee's website:

PBO BOX 6100, Parliament House, Canberra ACT 2600 Tel: (02) 6277 3419 Fax: (02) 6277 5809
Email: Internet:

Attachment A

Estimates of reductions from 2017–18 to 2024–251

Funding cuts of up to $11.8 billion. In Far North Queensland means losing 42 doctors, 149 nurses, and 42 allied health professionals.

New South Wales:
Funding cuts of up to $17.7 billion AMA NSW notes that the cuts are equivalent to the loss of ‘five and a half Westmead hospitals’.

Australian Capital Territory:
Funding cuts of around $1.0 billion.

Funding cuts of around $1.0 billion.


1 Information has been taken from a range of sources including evidence presented to the Senate Select Committee on Health, 2015 Intergenerational Report, reports by the AMA, and media reports.

Reduction in Commonwealth hospital funding - estimates of reductions from 2017-18 to 2024-25



  • Evidence from representatives from the Cairns and Hinterland Hospital and Health Service (pp 1-12) and representatives from the Queensland Department of Health (pp 13-24), Committee Hansard, 16 November 2015.

South Australia:

  • ‘South Australia’s Response to the 2014–15 Commonwealth Budget Cuts’, South Australian Government, May 2014. See also evidence from representatives of the South Australian Department of Health and Ageing, Committee Hansard, 11 June 2015 (pp 20-28).


  • Evidence from representatives from the Victorian Department of Health and Human Services (pp38-48), Committee Hansard, 4 November 2015.

New South Wales:

  • AMA NSW, media release, ‘Commonwealth cuts will see NSW lose five-and-a-half Westmead Hospitals’, 23 June 2015.
  • AMA NSW, ‘Pre-Budget Briefing NSW State Budget June 2015’, 9. 5.

Northern Territory:

  • Chief Minister of the Northern Territory, the Hon Adam Giles MLA, media release, ‘Territory Health and Education Funding Under Threat’, 18 May 2014.

Western Australia, Tasmania, Australian Capital Territory:

  • 2015 Intergenerational Report, Department of Treasury, 5 March 2015, as quoted by Lenore Taylor, ‘Doctors’ group predicts health funding crisis unless federal cuts are reversed’, The Guardian, 16 April 2015

Supporting information from the 2015 Public Hospital Report Card — An AMA analysis of Australia's public hospital system, AMA, March 2015.

Some figures quoted in the above map are taken from Hansard evidence, while other figures are from the 2015 Intergenerational Report, as quoted by Lenore Taylor writing in The Guardian. The complete set of figures from this source is:

$10 billion $16 billion $12 billion $3.5 billion $5.7 billion $1.0 billion $0.6 billion $1.0 billion

Figures from other sources, including evidence from public hearings are:

$11.8 billion $17.7 billion $17.7 billion $1.0 billion Not available Not available Not available Not available