Legislative Council, Wednesday 28 June 2023

Ms FORREST question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

Regarding a QON during Budget Estimates Committee Hearings in response to a question about the National Health Reform Agreement (NHRA) and whether the State had exceeded the 6.5 per cent funding growth cap, the Treasurer informed the Committee that this growth cap had been exceeded in 2021-22 with actual growth of 9.1 per cent, however Tasmania received funding for its full NHRA growth in that year as a result of the national funding cap provisions under the NHRA.

1. What specific provisions enabled the full funding to occur; and

2. If the growth cap is exceeded in 2022-23 is the same provision likely to be applied to cover any growth above 6.5 per cent for the 2022-23 financial year?

Answers:

1. The operation of the funding cap is described in clause A56 of the Addendum to the National Health Reform Agreement 2020-2025. Under these provisions, states can receive a proportionate redistribution of the funding cap not used by other states.

The total growth in Australian Government funding under the NHRA was less than 6.5 per cent in 2021-22 which enabled Tasmania to receive its full growth of 9.1 per cent.

The specific provisions which enabled this are:

• “A56(a): A soft cap will be applied to the Commonwealth funding entitlement of each State throughout the relevant financial year;
• A56(b): Any funding remaining under the national funding cap will be subject to proportionate redistribution as part of the annual reconciliation under clause A77; and
• A56(d): should the growth in Commonwealth funding under this Addendum not exceed 6.5 per cent at a national level, each State will receive its uncapped Commonwealth funding entitlement for that State.”

2. The same NHRA provisions apply for every financial year that the Addendum is in place. Any cap redistribution above the 6.5 per cent soft cap is dependent upon the growth of states.