EXPLANATORY STATEMENT
Issued by authority of the Treasurer
Federal Financial Relations Act 2009
Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019
Section 15A of the Federal Financial Relations Act 2009 (the Act) provides that the Treasurer may determine that an amount specified in the determination is to be paid to a State, the Australian Capital Territory and the Northern Territory specified in the determination for the purpose of making a grant of financial assistance for the purpose of expenditure in accordance with the National Health Reform Agreement.
The purpose of the Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019 is to specify the amount to be paid to each State, the Australian Capital Territory and Northern Territory for the 2017-18 financial year.
Under the Intergovernmental Agreement on Federal Financial Relations (the IGA) and the Act, the Commonwealth provides national health reform payments to the States, the Australian Capital Territory and the Northern Territory, as a financial contribution to support state service delivery in the area of healthcare, particularly public hospitals. The details of the funding arrangements are set out in the National Health Reform Agreement.
From 2014-15, Commonwealth funding for most public hospital services has been calculated on an activity basis, so that funding varies with the public hospital services delivered in each State, the Australian Capital Territory and the Northern Territory.
For 2017-18, Schedule I of the Addendum to the National Health Reform Agreement provides that the Commonwealth will fund 45 per cent of the efficient growth in activity based services. Efficient growth consists of the national efficient price for any changes in the volume of services provided and the growth in the national efficient price of providing the existing volume of services.
Where services or functions are more appropriately funded through block grants and for teaching, training and research, Clause I18 of Schedule I to the Addendum to the National Health Reform Agreement provides that the Commonwealth will fund 45 per cent of growth in the efficient cost of providing the services or performing the functions.
For the period, 2017-18 to 2019-20, annual growth in Commonwealth national health reform funding is capped at 6.5 per cent.
Advance payments in respect of national health reform are made throughout the financial year based on estimates of each jurisdiction’s anticipated entitlement for that year. Any adjustment between the advances paid to a jurisdiction and the jurisdiction’s determined entitlement is made in the first practicable payment after the determination is made.
In accordance with the functions of the Administrator of the National Health Funding Pool under paragraph 238(1)(a) of the National Health Reform Act 2011, the Administrator has calculated and advised the amounts required to be paid by the Commonwealth in respect of 2017-18 into each State Pool Account of the National Health Funding Pool under the National Health Reform Agreement. The Treasurer has accepted the Administrator’s advice in making this determination.
The IGA and the National Health Reform Agreement were subject to extensive consultation with the States and Territories and were signed by all jurisdictions. Both agreements are publicly available on the website for the Council on Federal Financial Relations. Consultation with the States and Territories on national health reform funding also occurs regularly, through the Administrator’s Jurisdictional Advisory Committee meetings.
Details of the Determination are set out in Attachment B.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003. However, the Determination is not subject to disallowance.
The Determination commences on the day after registration.
ATTACHMENT A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The purpose of the Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019 is to specify the amount to be paid to each State, the Australian Capital Territory and the Northern Territory for the 2017-18 financial year.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
ATTACHMENT B
Details of the Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019
This Attachment sets out further details of the Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019 (the Determination).
Section 1 – Name
This section specifies the name of the Determination is the Federal Financial Relations (National Health Reform Payments for 2017-18) Determination 2019.
Section 2 – Commencement
This section prescribes that the Determination commences the day after the Determination is registered on the Federal Register of Legislation.
Section 3 – Authority
This section provides that the Determination is made under the Federal Financial Relations Act 2009.
Section 4 – Definitions
This section provides definitions for the purposes of the Determination.
Section 5 – National health reform payments for the 2017-18 financial year
This section sets out the amounts required to be paid by the Commonwealth in respect of the 2017-18 financial year into each State Pool Account of the National Health Funding Pool under the National Health Reform Agreement.
The Administrator of the National Health Funding Pool (Administrator) has calculated and advised the amounts required to be paid to each State, the Australian Capital Territory and the Northern Territory, in accordance with paragraph 238(1)(a) of the National Health Reform Act 2011. The Treasurer has accepted the Administrator’s advice making the Determination.