The HHF is one of the three “nation-building” funds established by the Rudd government for long-term reforms and to support jobs and economic activity. The funds have played central roles in Labor’s two economic stimulus packages and last year’s budget.
Health Minister Nicola Roxon has the final say on which projects receive HHF money – she issues the guidelines for funding evaluation, proposals are assessed by an independent advisory board of experts that she appoints and those projects that meet the conditions go to her for ultimate approval. Not all screened proposals that qualify receive HHF funding.
Many of the fund projects were deemed “shovel-ready” or have been boosted by state government contributions. They include a new rehabilitation unit at the Fiona Stanley Hospital in Perth, the Parkville Comprehensive Cancer Centre in Melbourne, the Health and Medical Research Institute in Adelaide, an expansion of Townsville Hospital and the Lifehouse Cancer Centre in Sydney.
Taking into account last year’s electoral redistributions in Queensland and NSW, which notionally handed five seats from the Liberal to Labor, including Herbert (Townsville) and Greenway (western Sydney), Labor’s share of the HHF pie rises to 83 per cent – or $5 to the government-held electorates for every $1 going to non-Labor seats.
The HHF figures are in line with the skewed outlays of the government’s $275 million GP Super Clinics program, under which Labor electorates are receiving 80 per cent of the funds to construct the new one-stop medical centres.
Based on the House of Representatives, where Labor holds 83 of 150 seats, a reasonable share of health funds for its electorates would be 55 per cent.
The Rudd government has chosen to green-light HHF projects located in ultra-marginal Labor seats such as Solomon in Darwin, Bass in Tasmania and Hasluck in Perth, and in winnable Coalition electorates such as Herbert, Greenway and Hughes in southern Sydney.
Health policy is shaping up as a key election issue, with Labor’s reform plan proposing majority funding from the commonwealth (by taking one-third of GST funds) and improved local management of hospitals.
On April 19 in Canberra, the Prime Minister will seek an agreement on his health reforms when he hosts premiers and chief ministers at the Council of Australian Governments meeting.
Breaking down HHF projects by state, Western Australia (which has 10 per cent of the population) has been handsomely rewarded, gaining an 18 per cent share.
Victoria, Tasmania and the territories have received funding in excess of their per capita expectations.
Queensland and South Australia have won funds in line with their size.
But NSW, long seen as a poorly managed jurisdiction, particularly in containing health costs, has been severely penalised in the HHF process.
Although the state has 32.5 per cent of the population, it has received only 16.8 per cent of the HHF’s investments.
Announcing the Building Australia Fund, Education Investment Fund and HHF in his May 2008 budget speech, Wayne Swan lamented the short-sightedness of national budgets.
“For too long, our national budgets have focused on the next election, not the big challenge facing our country in the next decade and beyond,” the Treasurer said.
At the time, the federal opposition called the three new investment vehicles, with planned seed capital of $41bn, “slush funds” to be used by Labor to pursue short-term political ends.
According to its guiding principles, the HHF is geared to investments in major projects that will meet health reform targets as well as strategic stakes that will lead to improvements in “efficiency, access or outcomes of health care”.
The Health Minister ultimately approves funding for projects that have passed screening by an advisory panel of experts appointed by the minister.
The HHF advisory board is chaired by private equity figure Bill Ferris, chairman of the Garvan Institute for Medical Research and a former chairman of Austrade.
Other advisory board members include KPMG partner Patricia Faulkner, Health and Ageing departmental secretary Jane Halton, infrastructure executive Bruce Warner and public health academics Stephen Leeder, John Wakerman and Cindy Shannon.
In the 2009-10 budget, Health Minister Nicola Roxon announced $3.2bn in new spending from the HHF to upgrade hospital facilities, improve cancer treatment and to promote so-called “translational research” from the laboratory bench to bedside care.
Most of the money has gone to specific projects, although $532m for a network of regional cancer centres has yet to be allocated.
And $120m has been provided to BreastScreen Australia for a national mammography program.
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