PRIME MINISTERCANBERRAthis paper contains recycled content and sustainable Australian forest product
The Hon Ted Baillieu MLAPremier of Victoria1 Treasury PlaceMELBOURNE VIC 3000Dear PremierI refer to your letters of 21 January 2013 and 15 February 2013 regarding theadjustments in national health reform funding payments made in the 2012-13 Mid-Year Economic and Fiscal Outlook (MYEFO).
As you are well aware, Federal Government funding for Victoria’s health system w
illcontinue to increase year on year, from $3.6 billion in 2012-13 to $4.5 billion in2015-16. This is an increase of $900 million or 26 per cent. I note this increasedfunding comes at a time when your government has cut $616 million over 4 yearsf
rom Victoria’s state health budget.
Despite these facts, in recent months you have embarked on a disingenuous andpurely political campaign in relation to a $107 million adjustment of health fundingfrom the Federal Government. Your campaign has been designed to detract from thedecisions you and your Government have made.You know that the adjustments made in MYEFO are part of a regular process thatensures payments are based on the most up to date information and estimates. Theadjustments are not a decision of G
overnment and the Commonwealth’s actions are
consistent with the
Federal Financial Relations Act 2009
and the IntergovernmentalAgreement on Federal Financial Relations (IGA-FFR). You signed the IGA FFR andthe historic, $16.4 billion National Health Reform Agreement on 1 August 2011.
Unfortunately, as the system manager of Victoria’s hospital system, you have chosen
to pass on the $107 million adjustment in 2012-13 directly to your Local HospitalNetworks (LHNs). Victorian hospitals and patients have been adversely affected as adirect result of your decision.I note that you have done this despite a Goods and Services Tax balancingadjustment that saw additional, unexpected revenue of around $67 million paid toVictoria in 2012-13. This is additional, unbudgeted funding you have chosen not todirect to hospital services.