Hearing Services Administration Bill 1997

Hearing Services Administration Bill 1997

Hearing Services and AGHS Reform Bill 1997

March 1997

© Parliament of the Commonwealth of Australia 1997

ISSN 1038-2755

This document was produced from camera-ready copy prepared by the
Senate Community Affairs Legislation Committee Secretariat and
printed by the Senate Printing Unit, Parliament House, Canberra






Senator Sue Knowles, Chairman          LP, Western Australia                   

Senator Meg Lees, Deputy Chair         AD, South Australia                     

Senator Helen Coonan                   LP, New South Wales                     

Senator Kay Denman                     ALP, Tasmania                           

Senator Alan Eggleston                 LP, Western Australia                   

Senator Belinda Neal                   ALP, New South Wales                    

Participating Members

Senator Eric Abetz                     LP, Tasmania                            

Senator Lyn Allison                    AD, Victoria                            

Senator Bob Brown                      Greens, Tasmania                        

Senator the Hon Bob Collins            ALP, Northern Territory                 

Senator Mal Colston                    Ind, Queensland                         

Senator Barney Cooney                  ALP, Victoria                           

Senator the Hon Rosemary Crowley       ALP, South Australia                    

Senator Chris Evans                    ALP, Western Australia                  

Senator the Hon John Faulkner          ALP, New South Wales                    

Senator Brenda Gibbs                   ALP, Queensland                         

Senator Brian Harradine                Ind, Tasmania                           

Senator Sue Mackay                     ALP, Tasmania                           

Senator Dee Margetts                   GWA, Western Australia                  

Senator Kay Patterson                  LP, Victoria                            

Senator the Hon Margaret Reynolds      ALP, Queensland                         

Senator Sue West                       ALP, New South Wales                    

Senator John Woodley                   AD, Queensland                          


Mr Elton Humphery
The Senate, Parliament House
Phone: (06) 277 3515



1.1 The Hearing Services Administration Bill 1997 (HSA Bill) and the Hearing Services and AGHS Reform Bill 1997 (HS & AGHS Bill) were introduced into the House of Representatives on 5 February 1997. On 25 February 1997 the Senate, on the recommendation of the Selection of Bills Committee (Report No. 3 of 1997), referred the provisions of the Bills to the Committee for report by 24 March 1997.

1.2 The Committee received 26 submissions, and these are listed at Appendix 1. The Committee considered the Bills at a public hearing on 19 March 1997. Details of the public hearing are referred to in Appendix 2.


Hearing Services Administration Bill 1997

2.1 The Hearing Services Administration Bill 1997 will provide for the establishment of a voucher system for the delivery of Government-funded hearing services from 1 July 1997. This Bill, together with the Hearing Services and AGHS Reform Bill 1997, gives effect to the Government's 1996 Budget decision to reform the delivery of Government-funded hearing services. The purpose of these Bills is to achieve more efficient and effective ways of delivering Government-funded hearing services to existing and new beneficiaries to the Hearing Services program.

2.2 The purpose of the Hearing Services Administration Bill 1997 is to:

(a) improve government-funded services for adults with a hearing loss by giving a choice of service provider and by ensuring service quality; and

(b) introduce managed competition within and between the private sector and the government provider of hearing services, with greater industry involvement in self-regulation and standards.

2.3 The Bill allows the Minister to make determinations to guide the administration of a voucher system. The scheme provides for accreditation of suitable service providers, including the current government provider, Australian Hearing Services (AHS); rules of conduct for service providers; and rules surrounding the nature and extent and use of vouchers. Other arrangements with service providers will be dealt with through contractual arrangements.

2.4 Participants in the voucher system will be entitled to one or more specified hearing services including assessment of hearing loss, the provision and fitting of one or more hearing devices (for example, a hearing aid), necessary rehabilitation and adjustment to using the devices and maintenance and battery replacement.

2.5 Under the Bill the existing annual contribution of $25 for maintenance and replacement of batteries will continue to apply to those accessing the voucher system. The level and complexity of each service will depend on clinical needs, as assessed by properly qualified staff of the service provider in consultation with the client, and services to be of a proper professional standard.

2.6 Administration of the voucher system is likely to be delegated by the Minister to the Department of Health and Family Services (DHFS). Under this delegation, the Department will primarily:

2.7 Unlike previous arrangements, the purpose of the legislation is to allow people to purchase levels of service beyond those they receive free from the Government. This will allow people to take control of their hearing needs by allowing them not only to choose their service provider but also to choose from a range of suitable hearing products. The Bill explicitly provides that the only hearing devices that can be provided through the voucher system are those that meet specifications set by the Minister.

2.8 As part of the new arrangements, the Office of Hearing Services (OHS) will be established which will ensure that participants in the voucher scheme have access to high quality hearing devices. The Department will enter into arrangements with suppliers of hearing aids, most likely through Common Use Contracts with suppliers of hearing devices. The establishment of Common-Use contracts with suppliers will ensure that consumers have access to devices which meet the full range of clinical needs, ensure that these are provided at reasonable cost to the taxpayer, and ensure that technical and performance standards are maintained.

2.9 OHS will monitor the overall operation of the voucher system, check any instances of over or under-servicing, and receive and resolve any complaints. Its powers will allow it to take appropriate action if satisfactory services are not provided. OHS will also provide information and impartial advice for consumers to assist them in making their best choices within the scheme.

2.10 New entrants and existing Hearing Services Program participants will benefit from the voucher system. A transition strategy will be put in place by the OHS ensuring that pensioners and veterans already part of the Program are able to avail themselves of the additional features of the new arrangements in due course.

2.11 The new voucher system will affect the current operations of AHS. AHS will not in future have exclusive rights to provide Government-funded services. OHS will allow separation of the purchasing and regulatory functions that have been formerly provided by AHS. This measure will allow AHS to compete freely on an equal footing with accredited private sector service providers. With the introduction of competition between the public and commercial service providers, AHS will have to compete for voucher-holders resulting in a more competitive environment and greater economic activity within the hearing services industry sector.

2.12 AHS will continue to meet essential community service obligations on behalf of the Government and focus on services provided to children and designated groups of people with complex or special needs who, for the immediate future, will remain outside the voucher arrangements. Those in need of specialist intervention including people with high hearing rehabilitation needs and people living in rural and remote areas such as Aboriginal and Torres Strait Islander communities, will continue to receive services from AHS. In important areas of research, hearing loss prevention and industry development, AHS will continue to play a key role.

2.13 Changes to the provision of services under the voucher system require changes to be made to the statutory charter of AHS. Provisions have been made in the accompanying Hearing Services and AGHS Reform Bill 1997 (HS & AGHS Bill).

Hearing Services and AGHS Reform Bill 1997

2.14 The HS & AGHS Bill proposes the necessary consequential changes to amend the Hearing Services Act 1991 that governs AHS. The Bill also provides some consequential amendments to the Social Security Act, Veterans' Entitlements Act, and the Privacy Act in relation to hearing aids and hearing services.

2.15 The HS & AGHS Bill 1997 provides for amendments to the Hearing Services Act 1991, and for the transitional arrangements relating to the restructuring and corporatisation of Australian Government Health Service (AGHS) as a Commonwealth company.

2.16 AGHS, which currently operates as a business unit within the Department of Health and Family Services, is to be replaced by a Commonwealth owned company limited by shares, established under the Corporations Law. The Bill provides for the transfer of AGHS assets, liabilities and records to the new company. The transfer of AGHS staff will be handled separately under the provisions of section 81C of the Public Service Act 1922.

2.17 Existing AGHS assets and liabilities (including the balance of funds in the Group Two Trust Account established under section 62A of the Audit Act 1901), are to be transferred to the new company. It is expected that the new voucher arrangements for the provision of hearing services and the consequential changes in operations for AHS will be implemented on a Budget neutral basis.

2.18 The HS & AGHS Bill proposes amendments to effect changes in eligibility for the Hearing Services Program, and the establishment of a hearing services voucher system as provided under the HSA Bill.

2.19 Concessions under the Commonwealth Hearing Services Program will be withdrawn from holders of Commonwealth Seniors Health Card (CSHC). Changes are also proposed to reduce the eligibility age limit for 'Australian children' from 21 to 'under 18 years of age'. The Bill allows for amendments necessary to reflect changes in administrative arrangements since the Act was last amended. These changes relate to the names of social security 'health' and veteran's 'entitlement' cards issued by the Departments of Social Security and Veterans Affairs. These amendments will have effect when the Act receives Royal Assent and are consequential to the passage of the Hearing Services Administration Bill 1997. This will enable implementation of a hearing services voucher system. Service delivery arrangements require changes to the functions and operations of AHS which will continue to operate as a Commonwealth statutory authority and will be the principal public sector provider for children and prescribed public sector clients.

2.20 Under the proposed hearing services voucher scheme, AHS will compete on equal terms with contracted private sector service providers for the delivery of government-funded hearing services to pensioners and eligible veterans.


3.1 A number of issues were raised in submissions and at the public hearing in relation to the Bills and these are discussed below.

Age limit reduction

3.2 A substantial number of submissions received from organisations closely associated with assisting hearing impaired and deaf children claimed that a significant number of hearing impaired students will not have completed secondary schooling by the age of 18. It was suggested that hearing impaired students were often 20 before completion and thus still dependent upon family for financial support. DHFS advised the Committee that the vast majority of young people with a hearing impediment will have already had their hearing needs identified some years before they turn 18 and that appropriate services will have already been provided.

3.3 Deafness Forum Australia and ACROD both stressed to the Committee that 18 to 21 year olds will be discriminated against under the proposed reforms. Particular reference was made to the potential effects upon individuals' educational attainment, opportunities for independent living, financial burdens placed upon individuals and families, and young persons' financial inability to afford, and consequently, obtain benefits from private health insurance to cover the 'gap' years. Ms Amanda Moir, representative, Deafness Forum Australia, told the Committee that she was dependent upon her lip reading skills and hearing aids during her secondary and tertiary studies, during the years 18 to 21:

Without my aid ... I felt isolated socially and I struggled in class with communication and my studies. [The reforms] would affect many young people and place financial burden and guilt on families as well as disadvantaging deaf and hearing impaired people. From 18 to 21 years of age, you are not only studying but you are learning about life in general.

3.4 Mr Alistair McEwin, Member, Deafness Forum Australia, told the Committee that during his late secondary and tertiary studies, 'I was really glad that I had the benefit of the Australian Hearing Services in those crucial years'. He suggested that the proposed reform to remove 18 to 21 years olds from eligibility would severely impact upon people of that age. He also suggested that many 18 to 21 year old people with hearing impairments may be prepared to accept an increased annual payment from $25 to $35 to cover maintenance to ensure continued eligibility to the AHS program.

3.5 The HS & AGHS Bill provides for the continuation of services for eligible participants as redefined, and will achieve more efficient and effective ways of delivering Government-funded hearing services to more than 200 000 existing beneficiaries, and to the almost 50 000 new entrants to the program each year. OHS will provide vouchers to eligible adults who qualify to be participants in the voucher system. Under the new scheme, eligibility includes a person under and up to the age of 18 years.

3.6 DHFS advised the Committee that those eligible persons who have already received hearing services will be able to obtain minor maintenance of existing hearing devices and ear mould replacements for a period of 5 years. Those aged between 18 and under 21 years will become ineligible for continuing assistance under the Hearing Services Program in that new hearing devices will not be supplied free of charge (but will continue to receive minor maintenance of their hearing device and replacement ear moulds). This will impact on those few individuals whose hearing needs change, or who lose or damage their hearing aids. The Committee was advised that most hearing aids have a 'life' of 4 years.

3.7 DHFS noted in its submission that lowering the age of eligibility to free hearing services from 21 to 18 years of age will bring the provisions of the Bill into line with other relevant State legislation which deems parental responsibility to have ceased at the age of 18. DHFS noted that $0.5 million annual savings will be made from the changed eligibility arrangements for children.

Commonwealth Seniors Health Card (CSHC) holders

3.8 In 1994, Commonwealth Seniors Health Card (CSHC) holders, (formally private clients), were made eligible for government funded hearing services. The expanded eligibility criteria substantially raised the number of adults applying for AHS services. To meet the expansion in demand, AHS contracted with the private sector to provide hearing services for part pensioners and the additional number of CSHC clients. DHFS advised the Committee that since July 1994, some 4000 CSHC holders have sought assistance from AHS. The Centre for International Economics review reported a marked decline in applications for assistance in the 1995/96 which indicates that the increase in demand was not permanent.

3.9 The Deafness Forum of Australia suggested in its submission that eligibility for government assisted hearing services should be available to all people on low incomes suggesting that 'an appropriate definition of low income should be determined and used as the criterion for eligibility'. The Deafness Forum noted its concerns, however, that by providing access to all CSHC holders, other eligible persons would have to wait longer for assistance, or would receive a lesser quality of assistance.

3.10 ACROD referred to CSHC holders who were self-funded retirees, suggesting that although many had assets, many had 'very little in the way of income'. ACROD believed this group were discriminated against under the proposed legislation.

3.11 The Committee was advised by DHFS that the effect of the removal of eligibility of those holding CSHC's should not have any immediate effect upon individuals. Those who have already received assistance from AHS will be able to obtain minor maintenance of their hearing devices and replacement ear moulds and will not pay the $25 annual fee. They will have to replace their own batteries (estimated annual average cost is of the order of $30$150). This measure will impact only on a relatively small number of CSHC holders whose hearing needs change or if they lose or damage their hearing aid. Any savings derived from this measure will be applied to the cost of supplying hearing services to children and fully eligible pensioners.

3.12 The proposed legislation provides for hearing assistance to those identified as eligible under the new arrangements. No submissions were received from organisations directly representing the aged or superannuants.

Cost effective delivery of hearing services

3.13 Consumer choice and increased competition will be achieved through this legislation. The Hearing Aid Manufacturers and Distributors Association of Australia (HAMADAA), recognised that such reforms are 'designed to produce a more competitive environment for the delivery of publicly-funded hearing care'. In HAMADAA's view, the measures are 'consistent with the principles outlined by ... the Council of Australian Government (COAG)'.

3.14 AHS advised the Committee that AHS cost efficiency and effectiveness was independently audited and verified by the Australian National Audit Office in 1995, and claim that the cost to the taxpayer of AHS direct services have been significantly less than those of comparable private sector services.

3.15 The Australian College of Audiology (ACAud) reported that under the proposed reform, 'there will be no cost differential between services delivered by the AHS and private providers'. ACAud noted that the costs under the proposed program 'will be contained and reduced, owing to competition and other free market forces'. ACAud also noted that currently AHS utilises the private sector to service some clients. Under the proposed legislation, AHS and contracted private hearing service providers will be subject to the same regulatory environment. This measure will provide a 'level playing field' for those providing public hearings services and will assist private contractors in becoming more competitive.

3.16 DHFS informed the Committee that this legislation will introduce a system for allocating hearing services that will enhance consumer choice and lead to service delivery efficiencies within the hearing services industry that should be reflected in reduced program costs to government. Greater efficiencies and the introduction of competition in the Hearing Services Program will produce savings of approximately $4.3 million in 1997/98.

Impact on high technology employment in Australia

3.17 The Government has indicated that its collaborative arrangements with Australian Hearing Aids Pty Ltd (a wholly owned subsidiary of Bernafon Australia/Oticon Holdings Denmark), will continue, and contractual arrangements will be honoured until the year 2002 for the supply of hearing aids. The contract was rolled over with AHS and runs for 5 years from 1 October 1997 until 30 September 2002. Bernafon Australia provided employment figures for the Brisbane area indicating that 'over 200 people are currently employed by Bernafon Australia and Crystalaid Manufacture in their Brisbane facilities'.

3.18 The Committee was advised by HAMADAA that failure to pass these two Bills 'would be placing at risk the 600 people already employed by Australia's hearing aid manufacturers'. HAMADAA noted that the number of patients being streamed to the private sector has been declining 'if that continues, the collaborative company and AHS then gain a greater monopoly, therefore restricting the number of devices or the types and levels of devices that are currently available putting at risk a number of manufacturers who find it more difficult to maintain the staff levels that they have and might quite well be reducing them'. Further, the reforms would 'make a valuable contribution to current and future employment prospects in Australia's high technology industries'.

3.19 The Committee learned that joint development efforts have resulted in a 'major technological enhancement of Australia's only existing hearing aid manufacturing company Crystalaid Ltd'. AHS advised that hearing aids manufactured under the joint venture arrangements have a high level of local content and that a range of Australian companies contribute to design and manufacture of the hearing aids. AHS indicated that 'Australian consumers, eligible for AHS services, have access to state of the art hearing aids. AHS is the only Government program in the world that issues programmable hearing aids as its standard product to eligible clients'. Under the proposed legislation eligible clients will still have access to high quality products manufactured in Australia.

3.20 Crystalaid submitted to the Committee that the proposed legislative arrangements make no requirement for Australian content 'in respect of design or manufacture' of hearing devices, warning of the subsequent 'high risk in not only losing key expertise in design and manufacture ... [and] little chance of developing opportunities for new high technical positions in Australia'.

3.21 DHFS advised that pricing and other arrangements for the supply of hearing aids to the Program have not yet been set and that an Invitation to Register Interest (IRI) process had commenced, managed by Purchasing Australia. DHFS indicated to the Committee that the proposed voucher system is 'expected to have little, if any, impact on the gross industry in this sector'. The numbers of consumers and levels of need will not change under the new system, thus the impact on the service and manufacturing industries will not change.

Impact on imports/exports of hearing devices and technology


3.22 The Committee received information on the impact on imports of hearing aid technology. AHS confirmed that it is a partner in the joint venture arrangement with Bernafon for the local development and supply of hearing aids. AHS reported that the joint venture has resulted in an integrated hearing aid manufacturing industry in Australia, centered in Brisbane.

3.23 DHFS advised the Committee that the proposed voucher arrangements are not expected to have any significant impact on overall industry activity. Further, DHFS suggested that 'while some fluctuations in the import/export ration of hearing devices or componentry might occur, it is anticipated this will be within the range of historical market variations and not a direct consequence of the systems arising from this legislation'.


3.24 Export of hearing devices by Australian manufacturers elicited more comment in relation to competition. HAMADAA supports the legislation in relation to access to the public market and economies of scale. In its submission, HAMADAA stated:

Without access to the public market, manufacturers will be unable to develop the economies of scale necessary to reduce per unit costs which would make Australian made hearing aids more competitive in the international market place. Without the development of such competitive advantages, Australia risks losing access to not only a number of growing Asian markets, but also the employment opportunities that are associated with increased exports of elaborately transformed manufactured goods.

3.25 HAMADAA provided the Committee with figures indicating the growth in Australia's exports of hearing devices. It reported that in 1992/93 export sales represented $5.5 million. In 1995/96 the figure had grown to $35.1 million. HAMADAA expected these trends to continue once the reforms are in place and stressed that 'a key determinate in ensuring that the growth of these exports continue is the private manufacturing sector's participation in servicing the public market for hearing aids'.

3.26 DHFS informed the Committee that the 'collaborative arrangements between Australian Hearing Aids Pty Ltd and Australian Hearing Services include provisions for exports of the Australian manufactured hearing aids'. The provisions of this legislation should not adversely affect the export commitments included in the new arrangements.



4.1 The Committee reports to the Senate that it has considered the Hearing Services Administration Bill 1997 and the Hearing Services and AGHS Reform Bill 1997 and RECOMMENDS that the Bills proceed. However, it foreshadows the possibility of amendments on the floor of the Chamber to change the eligibility age limit for 'children' from 18 years to those persons up to 21 years of age, but that this be limited to those receiving AUSTUDY, unemployment benefits or other benefits.

Senator Sue Knowles


March 1997


Hearing Services Administration Bill 1997

Hearing Services and AGHS Reform Bill 1997


The Labor Members of the Senate Community Affairs Legislation Committee examining the Hearing Services Administration Bill 1997 and the Hearing Services and AGHS Reform Bill 1997 dissent from the majority report. These members believe that these bills will have a serious and detrimental affect on services for people who are deaf or hearing impaired. Only minor savings will be achieved and this represents an unnecessarily callous approach to budget savings. It is also a clear breach of an election commitment given by the Coalition to Australians during the last election.

The Australian Hearing Services is a statutory authority within the Department of Health and Family Services. It has a network of 54 permanent and 80 visiting centres. It provides hearing services to 180,000 people, or 75% of Australians who need hearings aids, free of charge. This includes children and young people up to the age of 21, pensioners, veterans, and Comcare clients.

The services provided by the Australian Hearing Services include hearing loss assessments, the provision and fitting of hearing aids, rehabilitation and adjustment to using hearing aids, replacement of batteries and the maintenance of hearing aids. The AHS provides hearing aids to its clients at an average price which is $400 lower that than of private sector providers.

The Government has two major intentions with its Hearing Services bills. Firstly, the Government will restrict eligibility to Australian Hearing Services. Commonwealth Seniors Health Card holders and 18 to 21 year olds will no longer be eligible for assistance for hearing impairment. Secondly these bills will corporatise the Australian Hearing Services and increase contracting out.

The Coalition promised in its social security policy during the election to "...maintain all current Commonwealth concessions".

The Prime Minister said during his third Headland speech, made to the Australian Council of Social Service (ACOSS), on the Coalition's view of a Fair Australia:

If the price of progress is human misery, it's not progress. If change makes people worse off, it's not reform.

The changes proposed in this bill make people "worse off" and are a clear breach of the Coalition's commitment to maintain all current Commonwealth concessions. The Government is removing from Commonwealth Seniors Health Card holders and 18 to 21 year olds access to Australian Hearing Services.

Children and young people up to the age of 21 were previously entitled to access to Australian Hearing Services. This is an unnecessarily ruthless approach to budget savings. The Government will only save $500,000 a year with each of these measures.

Labor views as unnecessarily callous the Government's intention to take away all hearing services previously provided by the Government from 18 to 21 year olds with hearing disabilities. This decision will have a major affect on this group of young people's lives for minor budget savings.

The Government takes a curious view of independence. When it is cutting services, as it is in this legislation, it views the age of independence for young people as 18, but when it is providing services, such as those for tertiary students, it considers the age of independence as 25.

The Deafness Forum of Australia's submission to the Committee made it very clear that this measure would have a serious impact on young deaf and other hearing impaired people trying to study or who are trying to find employment.

The years from 18 to 21 are a critical time...It is essential that there be no unnecessary barriers to the successful completion of secondary and post-secondary study...The less education any person complete, the greater the likelihood that they will become dependant on government assistance.

The Deafness Forum made it very clear that the significant costs the Government has imposed on 18 to 21 year old people in making them pay full costs for hearing aids, their maintenance and other hearing services, at what is likely to be a vulnerable time in any person of this age's life, will be a barrier to employment and education. The organisation also stressed that employed people at this age do not generally earn high salaries and the extra costs would be a large financial burden.

The Deafness Forum pointed out that many 18 to 21 years olds who use hearing aids are still completing their secondary education because their disability has slowed their education. "They often are a number of years behind their hearing peers."

ACROD confirmed this view, saying it was not uncommon for deaf students to need additional years to complete their secondary education. ACROD added that support needs of deaf students during their senior years of secondary school and tertiary education can be high.

In addition to needing the best hearing aids available, deaf students require FM Systems and other assistive devices as well as additional rehabilitative support during these years. Commercially available FM aids are very expensive.

In denying Commonwealth Seniors Health Card holders access to Australian Hearing Services the Government is also being mean spirited. AHS services were extended to Commonwealth Seniors Health Card holders because self-funded retirees often have very little income, even though they may have assets, were seen to have an income level equivalent to part-pensioners. This measure will affect the approximately 33,000 Commonwealth Seniors Health Card holders who are either using AHS currently or will in the future, for zero net savings. The budget states no savings will be achieve in the 1996-97, 1997-98, 1998-99 and 1999-2000 financial years. The Department has said $500,000 will actually be saved but this will be absorbed in administration, restructuring or in payment of a dividend to the Government.

The Government has argued that no savings have been included because "...the funds remain in the Program and are applied to the cost of supplying hearing services to children and pensioners". This argument is hard to sustain considering other cost cutting measures the Government has applied to the AHS.

The second aspect of this bill is the administrative changes and corporatisation of the AHS. The first step is to split the two functions of the AHS being regulator and service provider. The regulatory functions will be transferred to a new body and the service provision will be retained by the AHS. We are not in principle opposed to this division but the benefits of corporatisation appear questionable when the additional costs of restructuring and duplication of administration are provided by the cutting of benefits to the deaf and hearing impaired.

The Government is also introducing a voucher system so the AHS has to compete against private providers to supply services to the hearing impaired. Clause 20 of the Hearing Services Administration Bill 1997 gives the Minister the power to form contracts with providers for the provision of hearing services to voucher holders. The Labor Party is not opposed in principle to these changes but we do not believe that such moves are necessary when the AHS is providing an efficient, low cost, high quality service.

The Australian Hearing Service points out that the cost efficiency and effectiveness of the AHS has been independently audited and verified by the Australian national Audit Office and the Centre for National Economics. "To date the cost to the taxpayer of AHS direct services has been significantly less than that of comparable private sector services."

The Deafness Forum of Australia said in its submission that the AHS has been instrumental in setting and improving the quality and standards of services provided by audiometrists in Australia, and has worked to improve training in audiometry and to have better hearing technology developed and manufactured in Australia. The Deafness Forum wants to see existing services maintained, and this will not necessarily be achieved by the private sector.

Because of its buying power, its ability to buy in large quantities, the AHS is able to provide batteries at a 33 per cent and hearing aids at a 50 per cent discount on what people would pay privately. AHS hearing aids are provided to people at a price that is $400 lower on average than private sector providers. This represents a massive saving to most people.

The Centre for International Economics said that not only were the AHS' costs per new adult client lower than the fee paid for private sector services, but the AHS kept its prices well below the OECD average.

The AHS' joint venture with Australian Hearing Aids Pty Ltd means the AHS is not having to import hearing aids and is creating highly skilled jobs and foreign investment, sales and exports in high quality hearing aids and devices worth $200 million.

Corporatisation of services is certainly beneficial where greater efficiencies can be achieved. In this instance, the Australian Hearing Services is providing an efficient, cost effective and high quality service to Australian taxpayers, the deaf and hearing impaired and the Government. It is also helping generate skilled employment and Australian export and development in hearing technology. There is no evidence that this change to the structure of AHS will increase the efficiency or quality of the service.

As a final point on this legislation, it should be noted, that the Government has once again attempted to rush legislation through the Parliament. The Hearing Services package was introduced with the awareness that proper scrutiny in the Senate and by this Committee could not occur before the legislation was expected to take affect on 1 March 1997.


  1. That eligibility for AHS assistance be restored to all hearing impaired and deaf people aged 18 to 21.
  2. That eligibility for AHS assistance be restored for holders of Commonwealth Seniors Health Cards.
  3. That the costs of restructuring, corporatisation and duplication of administration not be drawn from the cutting of benefits to the deaf and hearing impaired.
  4. That contracting out only be proceeded with if it can be established that the quality of service provided by the AHS can be matched at the same or lower cost.





The Australian Democrats dissent from the majority report.

The Democrats do not support the removal of hearing services concessions from young people aged 18 to 21. The issues raised by witnesses with this Committee highlight the many additional obstacles young people with hearing difficulties face during their formative years. Young deaf people are far more likely to complete their formal education at a later age than their non-hearing impaired counterparts. This also means that young people who are deaf are much more likely to enter the workforce and begin to earn their own income at an older age as well.

The Democrats preferred option with regard to this part of the legislation would be that it be completely withdrawn. We acknowledge however, that it is very unlikely that this will happen. With this in mind, the Democrats add their support to the recommendation contained in the Majority Report. If this recommendation is adopted at least hearing services concessions for young people from 18 to 21 years who are receiving AUSTUDY, unemployment benefits or other benefits would be retained. We call upon the Government to accept the recommendation of the Committee's majority.

There is also a strong case for extending similar concessions to hearing impaired people who are over 21 but are the holders of a Health Care Card.

While the Democrats view the move to corporatise hearing services in Australia with some caution, we are not at all surprised by the course this Government is taking. It is very much in line with their stated policy goals and the policies we have seen introduced in other areas. However, we urge the Government to closely monitor and evaluate the effect of these reforms once they are in place and to ensure that all Community Service Obligations (CSOs) continue to be met by the Australian Hearing Services.

Senator Meg Lees Senator Lyn Allison

(AD, South Australia) (AD, Victoria)





Submission Organisation/individual


Banksia Secondary College


Parents of Hearing Impaired Children, National Network


Committee for Hearing Impaired Children Queensland Group Inc


Deafness Forum of Australia


Parents of Hearing Impaired South Australia Inc


Mr David Bullock


SHHH Australia Inc


Committee of Principals and Heads of Services for Deaf and Hearing Impaired Students


Deafness Council of Western Australia


Deafness Association of the N.T. Inc


Parents of Hearing Impaired Children, Victorian Federation Inc


The Advisory Council for Children with Impaired Hearing ( Victoria) - Taralye


Ms Diane Buckley


Early Education Program for Hearing Impaired Children


Australian Hearing Services


Better Hearing Australia Inc


Australian College of Audiology (ACAud Inc)


Hearing Aid Manufacturers and Distributors Association of Australia,Inc.(HAMADAA)


9 Bernafon Australia Pty Ltd


ACROD Limited


Victorian College for the Deaf


Parent Council for Deaf Education Inc


Commonwealth Department of Health and Family Services


North Shore Deaf Children's Association Incorporated


Crystalaid Manufacture Pty Ltd


M-E Hearing Systems



A public hearing was held on the Bills on 19 March 1997 in Senate Committee Room 2S1.

Committee Members in attendance


Commonwealth of Australia, February 1997

This document is made available under the authority of the Clerk of the Senate, Dept. of the Senate (Australia).