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Annual Report - Secretary's Review


Image of the Secretary, Jane Halton


Once again the Department has had a very active year addressing a wide range of pressing issues facing our health and aged care sectors. Changes put into effect by the Department in 2005-06 will deliver benefits to the nation for many years to come.

Priority was given to the challenges of curbing the rising human and financial cost of chronic disease, including mental illness; ensuring equitable access to health and aged care services for all; and improving health outcomes for Indigenous Australians.

Major advances on some of these fronts reflected the delivery of the Australian Government’s 2004 election commitments, which were the focus of the May 2005 Budget, and new policy directions formulated through the Council of Australian Governments process.

Through carrying on its regular activities in 2005-06, the Department continued to support the health of every Australian - from refinements to Medicare and listing of new drugs through the Pharmaceutical Benefits Scheme (PBS), to training and practice incentives for doctors and nurses, regulation of over-the-counter medications, and payments to community pharmacies.

The backdrop for all of our activities in the year was the need to provide for our ageing population - with rapidly increasing demand for health and aged-care services and pharmaceuticals - and to protect Australia against new health threats, especially a potential influenza pandemic.

The Department administered a record budget of $38.4 billion - nearly a fifth of the entire Federal Budget. This was a 6.1 per cent nominal increase over 2004-05 expenditure. Through this portfolio, the Australian Government continues to provide nearly half of total national spending on health.

Meeting all of these objectives was, at times, difficult, but was achieved through the dedication, hard work and leadership of the Department’s staff.

Key achievements of 2005-06 were:
  • the Council of Australian Governments package of major health initiatives - including measures to improve mental health services, reduce avoidable chronic disease, and increase the health workforce (see Outcomes 1, 3 and 9);
  • the Fourth Community Pharmacy Agreement - which supports access to PBS medicines dispensed through community pharmacies, signed with the Pharmacy Guild of Australia on 16 November 2005 (see Outcome 2);
  • Influenza pandemic preparations - the revised Australian Health Management Plan for Pandemic Influenza, a plain English national health action plan to guide Australia’s response to pandemic influenza, released in May 2006 (see Outcome 12);
  • Indigenous health - a new Medicare-funded annual health check for Aboriginal and Torres Strait Islander children, and expansion of non-sniffable Opal fuel as a replacement for regular unleaded petrol in an additional 21 Aboriginal communities (see Outcome 7); and
  • the National Health and Medical Research Council - the Department successfully implemented transitional arrangements that enabled the Council to become an independent statutory agency within the Health and Ageing portfolio from 1 July 2006. The new arrangements are expected to strengthen the capacity of the Council to deliver better health and medical research outcomes (see Outcome 11).

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    Highlights of 2005-06

    A Council of Australian Governments (COAG) Package of Major Health Initiatives

    The Department played a strong role in developing, negotiating and implementing a significant package of national health initiatives agreed by the heads of all Australian governments on 10 February 2006.

    At its 10 February 2006 meeting, COAG endorsed the National Health Workforce Strategic Framework and agreed a number of actions designed to improve Australia’s health workforce and health education structures. The Department undertook additional work on the Strategic Framework for COAG’s consideration at its July 2006 meeting. This additional work included: investigation on the number and distribution of training places; the organisation of clinical training; education; accreditation; and registration of health professionals. The Department is also progressing COAG’s agreement to a national assessment process for overseas qualified doctors.

    The Department also developed several mental health initiatives that were announced by the Prime Minister on 8 April 2006 for inclusion in a COAG National Mental Health Action Plan. Initiatives included: increasing the role of psychologists and other health professionals in primary care; a renewed focus on promotion, prevention and early detection and intervention of mental health issues; and increasing the health workforce available to address mental health issues.

    In addition, the Department developed a detailed program for the Australian Government’s $250 million contribution to the Australian Better Health Initiative, which was funded in the May 2006 Budget. These measures will address risk factors which contribute to chronic disease, such as poor diet, physical inactivity, smoking, alcohol misuse and excess weight.

    The Department is also working on implementing a number of aged care initiatives agreed through COAG to improve the care of older patients in public hospitals, including those in smaller rural hospitals, and to help them to avoid unnecessary admissions to hospital.

    Other Measures to Prevent Disease and Promote Good Health

    The Department provided strategic leadership to combat the harm caused to individuals, communities and society by licit and illicit drugs. The Department took carriage of developing the National Alcohol Strategy 2006-2009 and the National Cannabis Strategy 2006-2009, which were endorsed by all Australian health and law ministers. Initiatives under the National Tobacco Strategy 2005-09 included the introduction of new graphic health warnings on all tobacco products.

    In 2005-06, the Department also continued to implement a range of measures to improve consumer knowledge of health risks and promote healthier lifestyles. They included the popular social marketing campaign - ‘Get Moving’ - launched in February 2006 to encourage people, especially 5 to 12 year-old children, to increase their physical activity levels. The Department also continued to support the
    Go for 2 & 5 fruit and vegetable campaign, with a second phase of advertising running between May and June.

    Commitment to Caring for Older Australians

    Working with aged care providers of all kinds to meet the diverse needs of older Australians, as the population ages, is another important function of the Department. This year the Department implemented a number of initiatives to continue to raise standards in aged care and to recognise the desire of many older people to receive care in the community rather than in residential facilities.

    A milestone was achieved in the continuing expansion and strengthening of the aged care sector. In 2001, the Department was given the target of achieving almost 200,000 operational aged care places. This target was passed with 204,869 operational aged care places at 30 June 2006.

    In consultation with industry stakeholders, the Department implemented government reforms to give people using aged care services greater financial security. These include new prudential arrangements for aged care providers and a scheme to guarantee the repayment of aged care residents’ accommodation bonds in the event that a provider becomes bankrupt or insolvent.

    The Department also developed measures to increase the physical security of people living in residential care facilities after several cases of sexual or physical assault were reported. Further consideration is being given to ways to encourage incidents to be reported, and to improve the Department’s capacity to respond to issues raised with the Complaints Resolution Scheme, including alleged abuse.

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    Protecting Australia Against Health Threats

    The Department established the Office of Health Protection (OHP) in December 2005 to expand its emergency response capability. The new division is dedicated to emergency planning and response, communicable disease surveillance and planning for emerging diseases.

    While much of the activity of the new office is geared towards ensuring that Australia is prepared for a possible influenza pandemic, the OHP is able to respond to other immediate concerns, such as any harm from hurricanes or earthquakes in the region, and managing health threats that might emerge from the misuse of hazardous materials.

    In May 2006, the Department strengthened Australia’s preparedness for an influenza pandemic through the release of the revised Australian Management Plan for Pandemic Influenza 2005. The Department also substantially increased the range and number of items in the National Medical Stockpile for use in an emergency and developed the National Medicines Stockpile Deployment Plan.

    In 2005-06, the OHP also provided the focus within the Department and the Australian Government on matters relating to health security, and had an important role in whole-of-government counter-terrorism activities. This included liaising regularly with Australian Government security and intelligence agencies, and working with the health sector to develop protective security measures in such critical areas as public health laboratories, the blood supply and hospitals.

    Strengthening Our High-Quality Health Care System

    The Department rolled out a number of new initiatives to support Australians’ access to high quality, well-integrated and cost-effective primary (GP) care. Significant progress was made with the implementation of Round the Clock Medicare, which will be complemented by the National Health Call Centre Network. Both of these programs will make it easier for people to obtain medical help and advice outside normal working hours.

    The Department also developed the new streamlined Medical Benefits Schedule care planning items for patients with chronic conditions or complex care needs; introduced new Medicare rebates designed to improve access to mainstream Medicare services for Aboriginal and Torres Strait Islander people; and extended the Training for Rural and Remote Procedural GPs Program to include emergency medicine training.

    The Department made significant progress in streamlining the Pharmaceutical Benefits Scheme (PBS) process to reduce the time taken to list approved drugs.

    The Department also successfully applied the 12.5 per cent price reduction policy to new generic brands of drugs listed on the PBS. In August and December 2005 and April 2006, 42 new generic brands triggered a 12.5 per cent price reduction, affecting 264 brands.

    Improving National Health Systems

    The Department negotiated the Fourth Community Pharmacy Agreement on behalf of the Australian Government. It was signed with the Pharmacy Guild of Australia on 16 November 2005. The agreement sets out remuneration arrangements for community pharmacies for the period 1 December 2005 to 30 June 2010. The fourth agreement provides payments to community pharmacies that distribute and supply PBS medicines and supports professional pharmacy programs and services. These include funding for a range of initiatives, such as medication reviews, support for rural pharmacies and their workforce, improving the access of Indigenous Australians to PBS medicines, and programs to improve community health.

    Under the Australian Health Care Agreements, the Department worked closely with the states and territories to improve the collection of data for non-inpatient hospital activity. We are negotiating to broaden the scope of data collected for these activities. This, combined with improvements to the quality and scope of data collected for inpatient activity, will make it possible to improve performance reporting of the services provided by Australia’s hospitals system.

    The Department continued to work in partnership with the National Blood Authority, the Therapeutic Goods Administration, State and Territory governments and other stakeholders to ensure that Australians have access to safe and affordable blood and blood products. This work included ensuring the adequacy of the blood supply to Australian patients in need by managing the national blood supply plan; minimising supply security risks; promoting high quality management and use of blood products; ensuring product safety; and helping to ensure that affordable blood and blood products are available to the Australian health sector through funding, as outlined in the National Blood Agreement.

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    Greater Choice in Private Health

    Initiatives administered by the Department saw the number of Australians covered by private health insurance reach record levels after rising steadily throughout 2005-06. In the June quarter 2006, 8.8 million Australians, or 43 per cent of the population, were covered by private health insurance.

    The Department also worked on a comprehensive package of private health insurance reforms to improve competition in the industry, provide better value and protection to consumers and ensure the sustainability of the private health sector. These changes include the introduction of broader health cover to promote wellness and prevent illness, and will be implemented from April 2007.

    Addressing Aboriginal and Torres Strait Islander Health Needs

    Sustainable gains in Aboriginal and Torres Strait Islander health remain a priority for the Department. All areas of the Department were engaged in this effort.

    One particular focus this year was on improving Indigenous access to mainstream health services and increasing the responsiveness of those services to Indigenous needs. An important initiative was the introduction of the new Medicare-funded annual health check for Aboriginal and Torres Strait Islander children from birth to 14 years of age. It encourages doctors to carry out regular comprehensive health checks for Indigenous children to promote healthy behaviour. It complements the Healthy for Life program which focuses on improving the health and wellbeing of Aboriginal and Torres Strait Islander mothers, babies, children and those affected by chronic disease. Implementation of Healthy for Life is ahead of schedule, with 53 sites approved for initiatives by the end of 2005-06.

    The Department also allocated funds for more than 40 additional health service delivery staff and more than 50 capital works projects to enhance existing and establish new primary health facilities. At the same time, the Department improved collaboration with other governments and the private health sector to address gaps in service delivery.

    The Department also worked with Indigenous-specific substance abuse services and expanded the availability of Opal fuel to 21 Aboriginal communities in central and northern Australia during the year. As part of a comprehensive approach to combat petrol sniffing, an eight point plan was agreed by states and territories and the Australian Government and is being implemented in a designated zone in central Australia.

    Supporting Medical Research

    The Department successfully managed the transition of the National Health and Medical Research Council to a financially independent statutory agency under the Financial Management Act 1997 (FMA Act).

    The new agency was established on 1 July 2006. The new governance arrangements provide for clearer lines of accountability and reporting by the Chief Executive Officer, as head of the agency, to the portfolio minister.

    The new arrangements are expected to strengthen the Council’s capacity to deliver better health and medical research outcomes. Following these changes, the Australian Government announced significant additional funding to boost research grants, fellowships and capital works at specific research agendas facilities.

    Managing Our People

    The results of our annual staff survey in November 2005 showed an improvement in satisfaction with the Department’s internal leadership and the opportunities for staff to be recognised and to pursue career opportunities. The results confirm that we have made significant progress in these areas since the first survey in 2003.

    We still have much to do to build on the findings. The Department’s new 2006-09 Corporate Plan will help with this, as it gives team leaders and staff direct line-of-sight through the Department’s priorities, values and responsibilities, to the Australian health and aged care sectors relevant to their roles.

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    New Portfolio Arrangements and Changes to the Department

    During the year there was a change in the portfolio ministry, with Senator the Hon Santo Santoro sworn in on 27 January as Minister for Ageing.

    There were also considerable location changes for the Department’s Central Office in Canberra. The re-opening of Scarborough House has helped to consolidate our accommodation but also required some temporary upheavals. More than 2,500 staff that were once housed across 12 different sites have now moved into six buildings.

    In June 2006, Mr David Kalisch and Mr David Learmonth were appointed Deputy Secretaries. One of the expanded executive team’s first management objectives was to revise the Department’s top level structure to align it with the challenges in the years ahead. The Department will implement a revised organisation structure in 2006-07.

    A Committed, Generous Staff

    Our staff, once again, rose to the occasion when disaster struck Australians around the world. Our involvement in the response to the terrorist attacks in London in July 2005 and the second Bali bombing three months later was very effective, guided by the strategies which we have developed over the last three years as part of our ongoing and thorough preparations for a health crisis.

    I continue to be impressed with the dedication of many staff to raising money and providing help as volunteers. They dug deep to support the community through fundraising efforts like the Cyclone Larry Disaster Relief Appeal, and annual events like Australia’s Biggest Morning Tea.

    Our achievement with the Hartley House Challenge was outstanding, raising $101,000 through a genuine team effort. This is an annual activity which not only supports a very worthwhile charity, but allows staff to achieve their own fitness goals. As well as continuing our commitment to Hartley, we have introduced a new Workplace Giving Program to extend our help to other worthy causes.


    The Department had a very busy but successful year and achieved the strategic objectives set down for it in the 2005-06 Health and Ageing Portfolio Budget Statements.

    Staff and managers demonstrated hard work, cooperation and commitment in providing well-considered and professional advice and information to the Australian Government, and strong and useful leadership to the health and ageing sector.

    Our key objectives and priorities for the coming year are detailed by outcome in the 2006-07 Health and Ageing Portfolio Budget Statements.

    Signature of Secretary Jane Halton
    Jane Halton
    Department of Health and Ageing

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  • Produced by the Portfolio Strategies Division, Australian Government Department of Health and Ageing.
    URL: http://www.health.gov.au/internet/annrpt/publishing.nsf/Content/secretarys-review-2
    If you would like to know more or give us your comments contact: annrep@health.gov.au