State anger at health cut

New population data sees federal funding slashed by $150m

HOSPITALS and health services around the nation are facing a shock $150 million funding cut, the equivalent of cancelling 30,000 hospital admissions.

Treasurer Wayne Swan’s office has confirmed the Commonwealth has recalculated the health funding it makes to the states using new population data.

Every state will be a loser.

Victoria’s Health Minister David Davis has raised the alarm over what he calls the ‘‘ dodgy brothers’’ adjustment after his departmental officials received a briefing which revealed Victoria stands to lose $39 million in health funding this year.

The cuts are in a Treasury document called the Final Budget Outcome which showsNSW will lose $48.8 mill i on i n health funding, Queensland $ 40.4 million, South Australia $11.1 million and Tasmania $1.6 million.

Mr Davis described the adjustment as an ‘‘opportunistic manipulation of academic work by the Australian Bureau of Statistics’’.

But the states signed up to an agreement that acknowledged the payments were linked to population estimates and could fall if the population declined.

The cuts relate to the $4.7 billion special purpose payments for health care made by the Commonwealth to the states that are distributed in accordance with the Australian Statistician’s determination of the states’ population shares as at December 31 of that year.

The Federal Government used new census data to revise down population estimates for each state.

The clawback of funding is worth less than 1 per cent of the total $4.7 billion in special purpose grants but comes as states health budgets are already under pressure from declining GST revenue.

‘‘We don’t think it’s the case that Victoria’s population has fallen by 11,000. The population in Victoria is up 70-80,000,’’ Mr Davis said.

‘‘It’s like changing the rules in a football game on the run.’’

Mr Davis accused the Commonwealth of preying on state budgets to try to balance its own budget which is under threat from declining tax revenues. Patients would be the losers, he said.

‘‘This money would have been used to fund thousands of operations and it will have a significant impact on emergency departments,’’ he said.

The $150 million cut represents the amount of funding the Government’s Independent Hospital Pricing Authority says is needed to pay for over 30,000 hospital admissions.