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PDF printable version of Historic health reform (PDF 22 KB)

Joint Release

Prime Minister

Minister for Health

20 April 2010

An historic agreement was reached today to deliver better health and better hospitals for Australian working families.

This will deliver the most significant reforms to our health and hospitals system since the introduction of Medicare.

From July 1 this year the Australian Government will start delivering $5.3 billion in additional funding over the next four years to provide:

• 1,300 new sub-acute hospital beds;
• Over 6000 new doctors;
• An additional 2500 aged care beds;
• Emergency department waiting times capped at four hours;
• Elective surgery delivered on time for 95 per cent of Australians;
• An historic agreement to reshape mental health services and help 20,000 extra young people get access to mental health services;
• More coordinated care for patients with diabetes in general practice;
• A Commonwealth takeover of primary care; and
• A Commonwealth takeover of aged care.

There will also be a minimum of $15.6 billion provided by the Australian Government in top-up funds to guarantee sustainable funding for public hospitals.

This record funding will be backed by tough national standards so all Australians, regardless of where they live, know the high standards they can expect from their public hospitals.

This new National Health and Hospitals Network also means that hard working doctors and nurses will have more say in the way their local hospital is run, through Local Hospital Networks and new primary health care organisations.

Funding Arrangements

The Commonwealth and seven states and territories have agreed to the Commonwealth retaining one third of the GST and becoming the dominant funder of the nation's hospital system.

The Commonwealth will continue discussions with the Western Australian Government over the period ahead.

One dominant funder under the National Health and Hospitals Network means that patients will no longer be shunted from one system funded by the states and territories to another funded by the Commonwealth.
Under these reforms, the Australian Government:

• will become the dominant funder of public hospitals;
• fund 60 per cent of building, equipment, teaching, training and services;
• take pressure off public hospitals by improving the health care provided in the community; and
• fund all GP and primary care services and all aged care services.

Under the agreement, a third of state and territory GST revenue (except WA) will be retained by the Commonwealth and allocated to health and hospitals reform.

Commonwealth and state and territory funding for hospitals (excluding block funding for small and regional hospitals, and system-wide funding, e.g. for training) will be paid into seven separate National Health and Hospitals Network funds, one in each state or territory.

Payments for hospital services will then be made direct to Local Hospital Networks from this fund.

Fundamental reform is needed to ensure our health system can cope with the pressures of a growing and ageing population.

Without essential reform spiralling health costs would have consumed entire revenue raised by states and territories.

Today's agreement delivers that reform, putting health funding onto a sustainable footing, and delivering better health and better hospitals for working families across Australia.

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