The Victorian Labor Government has been caught out “gaming” the hospital system after they used a sneaky accounting trick to seek an unfair advantage over their state and territory counterparts, Federal Minister for Health Sussan Ley revealed today.
Victoria has been officially found to have artificially inflated their growth in hospital activity in order to claim more Commonwealth funding than they were entitled. They also did not have permission to do so.
The matter was brought to the Federal Government’s attention by the independent Administrator of the National Health Funding Pool, who was ironically set up at the request of the states – including Victoria – to calculate and advise on payments made under the National Health Reform Agreement (NHRA).
Ms Ley said the recent claims by Victorian Health Minister Jill Hennessy that the Commonwealth was ‘ripping’ $73 million out of the Victorian health system were therefore nothing but a “panicked” attempt to try and get ahead of the issue, knowing their attempts at deception had been exposed.
“This is a serious and deliberate attempt by the Victorian Labor Government to not only deceive the Commonwealth to the tune of $73 million, but also their State and Territory counterparts,” Ms Ley said.
“Minister Hennessey’s protests that Victoria had permission to do this are not only false, but demonstrate Victoria knew it was making a deliberate decision to try and game the system, and it hasn’t paid off for them.
“The evidence clearly shows the only sneaky accounting trick is from Victoria, which is why their state and federal Labor counterparts aren’t leaping to their defence.
“I will be seeking a please explain from Minister Hennessey and formally advising all Victorian Local Hospital networks of the reasons why the Andrews Government is reducing hospital funding.”
Ms Ley said the Turnbull Government supported the requirement under Clause 3c of the NHRA for all states and territories to be subject to a “nationally-consistent” approach regarding Activity Base Funding.
Ms Ley said the Federal Government had also reasonably offered Victoria the opportunity to reconcile their over-claiming by simply taking a small reduction in Commonwealth payments over a number of months to ensure that it did not have an undue impact on the operation of Victoria’s hospitals or patients.
From 2013-14 to 2014-15 the Commonwealth increased funding to Victoria via the NHRA from $3.5 billion to $3.9 billion. As at the 2015-16 MYEFO, this was forecast to increase further to $4.1 billion in 2015-16, representing a further increase of $269 million, or 6.9 per cent.