Commonwealth of Australia Explanatory Memoranda

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HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2008

                               2008



THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




              HOUSE OF REPRESENTATIVES




HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2008




              EXPLANATORY MEMORANDUM




  (Circulated by authority of the Minister for Health and Ageing,
                    the Hon Nicola Roxon MP)
        HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2008

OUTLINE

The Health Care (Appropriation) Amendment Bill 2008 would amend the Health Care
(Appropriation) Act 1998 (the Act).

The Act provides the legislative basis and the standing appropriation for financial
assistance under the Australian Health Care Agreements (AHCAs). The AHCAs are the
main funding agreements between the Commonwealth and the states and territories for
public hospital services. The current standing appropriation expires on 30 June 2008
and is capped at $42,010,000,000.

The amendments proposed in this Bill would extend the current 5 year appropriation
period to 6 years, and would appropriate from the Consolidated Revenue Fund an
amount not exceeding $52,260,000,000, being an increase of $10,250,000,000 to the
current appropriation.

The amendments proposed by this Bill will enable the transitional health funding
arrangements agreed by the Council of Australian Governments (COAG) at its meeting
on 26 March 2008 to be implemented. The amendments allow continuity of funding to
the states and territories during the 2008-09 transitional year.

COAG also agreed that new health care agreements would be developed during the
course of 2008-09 with a commencement date for the new funding arrangements of
1 July 2009. Implementation of these arrangements under the Act would require further
amendment at a later date.

Financial Impact Statement

The amounts involved are estimated to be $10,250,000,000. $500,000,000 is to be paid
to the states and territories before the end of 2007-08 and hospital funding grants of
around $9,750,000,000 are to be made to the states and territories during the 2008-09
financial year, based on 2007-08 payments plus indexation.




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         HEALTH CARE (APPROPRIATION) AMENDMENT BILL 2008

NOTES ON CLAUSES

Clause 1: Short Title

Clause 1 is a formal provision specifying the short title of the Bill.

Clause 2: Commencement

The Bill will commence on the day it receives Royal Assent.

Clause 3: Schedule(s)

Clause 3 states that each Act that is specified in a Schedule to this Bill is amended or
repealed as set out in the applicable items in that Schedule, and any other item has effect
according to its terms.

SCHEDULE 1 - AMENDMENT OF THE HEALTH CARE (APPROPRIATION)
ACT 1998

Item 1

Item 1 would amend the definition of "appropriation period" contained in section 3 of
the Act. Paragraph (b) of the definition currently provides that the appropriation period
means the period of 5 years starting on 1 July 2003.

This item amends paragraph (b) from 5 years to 6 years. Item 1 would extend the
current appropriation period from 1 July 2003-30 June 2008 to 1 July 2003-
30 June 2009.

Item 2

Item 2 would amend paragraph 4(3)(b) to provide that the total amount that can be paid
by way of financial assistance under the current standing appropriation in the Act is
$52,260,000,000.

Subsection 4(1) of the Act provides that the Minister may grant financial assistance to a
State, or to a hospital or other person for the purpose of providing, or paying for, health
and emergency services of a kind that are currently, or were historically, provided by
hospitals.

Subsection 4(1) of the Act also provides that the Minister may grant financial assistance
to a State, or to a hospital or other person for the purpose of funding projects or
programs that are designed to improve the efficiency and effectiveness of, or reduce the
demand for, health and emergency services of a kind or kinds that are currently, or were
historically, provided by hospitals, or, to improve patient outcomes in respect of the
delivery of such services.



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Subsection 4(2) of the Act provides that financial assistance under section 4 is only
payable in respect of services provided, or projects or programs conducted, during an
appropriation period.

Subsection 4(3) provides the total amount of financial assistance under section 4 must
not exceed, in respect of the 1 July 2003-30 June 2008 appropriation period,
$42,010,000,000.

Together, Item 1 and Item 2 would make the total amount of financial assistance payable
under section 4 of the Act the amount of $52,260,000,000 in respect of 1 July 2003-30
June 2009.




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