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Commonwealth of Australia - The Treasury

Annual Report 2014/15

Program 1.5: Assistance to the states for healthcare services

Program objective

The Government provides financial support to the states and territories to be spent delivering health care services.

This program also has links to the Health portfolio.

In 2014‑15, National Health Reform funding was linked to the level of services delivered by public hospitals as provided under the National Health Reform Agreement.

National Health Reform funding is paid into a National Health Funding Pool. The Administrator of the National Health Funding Pool, jointly established by the Commonwealth and the states and territories, is responsible for calculating the Commonwealth funding amount for public hospitals, advising the Treasurer of this amount, and making payments from the National Health Funding Pool.

Program deliverables

Payments to the states and territories according to the payment arrangements specified in the Intergovernmental Agreement on Federal Financial Relations (Intergovernmental Agreement) and informed by the National Health Reform Agreement.

Key performance indicators

The Treasury will transfer to the National Health Funding Pool the amount of Commonwealth funding to which each state and territory (including Local Hospital Networks in each jurisdiction) is entitled, and make the payments on the dates specified in the Intergovernmental Agreement.

The Commonwealth Treasury will provide advice to the states and territories on the components of each payment before each payment is made.

The states and territories are required to spend National Health Reform funding in the health care sector. Each state and territory treasurer will provide a report to the Council on Federal Financial Relations demonstrating how expenditure of National Health Reform funding within the sector is in accordance with the Intergovernmental Agreement and the National Health Reform Agreement.

Analysis of performance

The Treasury facilitated the Government’s 2014‑15 financial support for the states and territories to deliver health care services.

  • Total expenses for National Health Reform funding are estimated to be $15.5 billion.

    The final expense for 2014‑15 will be determined by the Treasurer in 2015-16, after a final reconciliation of hospital activity data has been completed by the Administrator.

  • Payments were paid into the National Health Funding Pool informed by the Administrator’s advice to the Treasurer for each state and territory’s monthly and annual entitlements.
  • Payments were made in a timely manner in accordance with the payment arrangements specified in the Intergovernmental Agreement.
  • Advice was provided to the states and territories before each payment was made.
  • To demonstrate that the National Health Reform funding has been spent within the relevant sector, each state and territory treasurer will provide a report to the Council within six months of 30 June 2015, disclosing relevant information in accordance with the Intergovernmental Agreement.