More than half of funding for the major parties remains secret — and this is how they want it

Kate Griffiths, Grattan Institute; Danielle Wood, Grattan Institute, and Tom Crowley, Grattan Institute

Political parties in Australia collectively received $168 million in donations for the financial year 2019-20. Today, Australians finally get to see where some of the money came from with the release of data from the Australian Electoral Commission.

While the big donors will make the headlines, they are only the tip of the iceberg. More than half of the funding for political parties remains hidden from public view. And that is exactly how the major parties want it.

What does the data tell us?

The Coalition and Labor received more in donations than all other parties combined. The Coalition received 41% of all funds (or A$69 million), while Labor received 33% ($55 million). The Greens came a distant third at 11% ($19 million), bumping Clive Palmer’s United Australia Party out of the position it held during the 2019 election.

The largest 5% of donors accounted for half of declared donations. For the second year in a row, the largest individual declared donation was made by Palmer’s company Mineralogy, which gave $5.9 million to his own party.

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The Coalition’s largest donor, Richard Pratt’s Pratt Holdings, donated $1.5 million. Other major donations to the Coalition included the Greenfields Foundation ($450,000), an investment company linked to the Liberal Party; and Transcendent Australia ($203,000), a company owned by Chinese businesswoman Sally Zou.

Unsurprisingly, many of Labor’s largest donors are unions, led by the “Shoppies” union (the Shop, Distributive and Allied Employees’ Association, or SDA), which donated almost $500,000. Labor also received large donations from fundraising vehicles associated with the party, including Labor Holdings Pty Ltd, which donated $910,000.

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Eight ways to clean up money in Australian politics

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Other large donors are bipartisan givers. The Australian Hotels Association gave $154,000 to the Coalition and $271,000 to Labor. Woodside Energy gave $198,000 to the Coalition and $138,000 to Labor. The Macquarie Group (including Macquarie Telecom) gave $254,000 to the Coalition and $184,000 to Labor. ANZ continued its regular donations to both sides with $100,000 each.

Total donations were smaller than the previous year (an election year). But those who donate “off-cycle” can still have substantial influence, whether they are political devotees, or playing the “long game” of using donations to open doors and wield political influence.

But a lot of the money remains hidden from public view

Declared donations are only a fraction of the total money flowing to our political parties.

Out of $168 million in party funding, only $15 million of donations were declared (or just 9%). Another $59 million — around one-third — is public funding provided by electoral commissions.

The rest? A murky combination of undeclared donations and a messy bucket of funds called “other receipts”, which includes everything from investment income to money raised at political fundraising dinners. This chart shows the breakdown for the two major parties.

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More than half of the Coalition’s private funding is undisclosed, and 40% of Labor’s funds. This rises to about 90% across both parties when other receipts are included.

The major parties want it this way

The Commonwealth donations disclosure regime is incredibly weak compared to almost all Australian states and most other advanced nations. Let’s be clear: this is a political choice backed in by the major parties.

In December, both major parties rejected a bill introduced by crossbench Senator Jacqui Lambie to improve transparency of political donations. It wasn’t revolutionary — the bill didn’t ban donors, or limit donations, or restrict what parties could do with donations. It simply proposed giving the public more and better information on the major donors, including:

• requiring donations over $5,000 to be declared by the parties (the current threshold is $14,300)

• stopping “donations splitting”, in which a major donor can hide by splitting a big donation into a series of small ones

• making income from political fundraising events declarable

• publishing data about donations within weeks (rather than the current eight to 19 months).

Yet, the bill was whitewashed. The committee rejected it on the basis that “there is already an effective regime in place”.

Our current system doesn’t have the balance right

The Commonwealth donations disclosure regime is supposed to provide transparency and to “inform the public about the financial dealings of political parties, candidates and others involved in the electoral process”. But it clearly does not deliver on this in its current form.

There is a balance to be drawn between the interests of donors in protecting their privacy and the interests of the public in knowing who funds and influences political parties.

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A full ban on political donations would level the playing field – but is it the best approach?

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But it is very hard to see how the current system – which keeps the majority of private money out of public view and unnecessarily delays the release of all donation data – has got the balance right.

A good disclosure system would close the loopholes that allow major donors to hide, while protecting the privacy of small donors.

Australians consistently say that they are suspicious that politicians are corrupt and that governments serve themselves and their mates rather than the public interest. Perhaps they’re right. Today’s donations release reminds us of the shortfalls of a system designed for donor and party interests over the public interest.

Kate Griffiths, Fellow, Grattan Institute; Danielle Wood, Chief executive officer, Grattan Institute, and Tom Crowley, Associate, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison likely to elevate aged care to cabinet, as government boosts its funding by $1 billion

Michelle Grattan, University of Canberra

The government will inject a further $1 billion into aged care, most of it for home care packages, in Thursday’s budget update.

Prime Minister Scott Morrison is also likely to elevate the troubled policy area to cabinet, in his imminent ministerial reshuffle.

Some 10,000 home care packages will be provided, costing $850 million, in the latest funding – 2500 packages will be released across each of the four levels of care.

The funds – announced Wednesday and included in Thursday’s Mid-Year Economic and Fiscal Outlook – come ahead of the final report of the royal commission into aged care due in February. An interim report more than a year ago was scathing about conditions in the sector.

Aged Care Minister Richard Colbeck is in the outer ministry and struggled during the pandemic. COVID’s largest death toll was in the residential aged care sector – approaching 700 deaths out of the total Australian deaths of just over 900.

Colbeck, a Tasmanian senator, was with Morrison in Tasmania on Tuesday and it is understood the Prime Minister went to Colbeck’s Devonport office after a function.

The reshuffle is expected to be modest, with most interest in who gets the trade portfolio, presently held by Simon Birmingham who took over finance when Mathias Cormann left parliament.

Trade is high profile with the attacks by China on a range of Australian exports. Education Minister Dan Tehan has been widely speculated for the post.

Tehan has experience in the area. He served in the Foreign Affairs and Trade Department; in 2002 he was seconded to the office of trade minister Mark Vaile as trade adviser. Later he worked for the Australian Chamber of Commerce and Industry as director of trade policy and international affairs.

If Tehan moved to trade, that would leave the education portfolio open – with the new incumbent facing the problems of a higher education sector that has taken a beating from the pandemic, which has blocked overseas students’ entry to Australia.

David Coleman, who has been on leave from the ministry for personal reasons for a year, is expected to step down from it in the reshuffle.

There is some room for backbench promotions to the frontbench.

The government said the new aged care money would bring to nearly 50,000 the number of home care packages funded since the commission’s interim report, at a cost of $3.3 billion.

In September more than 100,000 people were waiting for packages. The government says 99% of people on the home care waiting list are already receiving some level of support package.

The latest funding also includes $63.3 million for increased access to allied health services and improved mental health support for people in residential aged care.

An extra $57.8 million will be provided for aged care under the National Partnership on COVID-19 Response. This will strengthen protection, including training and and support in infection prevention and control.

There will be $8.2 million to extend the Victorian Aged Care Response Centre until June 30.

The budget update will show the projected deficit not to be as large as forecast in the budget only two months ago.

The update is expected to adopt conservative assumptions about the iron ore price which has skyrocketed recently.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Budget funding for Beyond Blue and Headspace is welcome. But it may not help those who need it most

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Louise Stone, Australian National University and Christine Phillips, Australian National University

The COVID-19 pandemic has ushered in more anxiety and depression, raised rates of bipolar disorder and other psychoses, and left many Australians stricken with grief. And we will, devastatingly, lose more Australians to suicide.

Meanwhile, many people are facing job losses, financial hardship, isolation and some are suffering long-term symptoms of COVID-19 or other chronic illnesses.

At first glance, it’s fitting the 2020-21 federal budget, unveiled on Tuesday, includes A$7 million for mental health organisations Beyond Blue, Headspace, Kids Helpline and Lifeline.

Look more closely, however, and some concerning patterns emerge. The commitment to mental health is channelled through these services, which provide a narrow spectrum of care. These organisations favour people who are resourced, resourceful, literate in English, urban, and have more easily treated conditions than those with complex or multiple chronic illnesses. In fact the people with the deepest need tend to receive the least care.

These services aren’t suited for those with complex needs

People with mental illnesses aren’t all the same. Mental health concerns range from grief and loss, to chronic severe schizophrenia, to depression and anxiety, and many of these conditions overlap. Many people have also survived considerable trauma, and this has a deep and lasting impact on their health and well-being. Others live with disability, homelessness, chronic pain, domestic violence and poverty.

Professor Ian Hickie, who was a founding director of Headspace, says:

The Headspace model was never set up to deal with more complex presentations, people with impairments already established, those who had complex mixes of anxiety, depression and substance misuse.

As clinicians with a particular interest in mental health, we are wary of the “single illness fallacy” — one person, one illness — that underpins many of Australia’s current mental health policies. People with ongoing or serious mental illnesses almost always suffer other physical conditions which compound their mental illness, and die decades earlier than the average Australian. They deserve support.

Many people with disabilities also encounter difficulty in accessing appropriate care for their needs. One example, among many, is that in the ACT, public child and adolescent mental health services exclude patients with autism or attention deficit disorder.

Patients describe being too complex or not complex enough for services, and a little like Goldilocks they have difficulty finding a service that is “just right” for their needs.

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Doubling Medicare-subsidised sessions won’t help those who receive no care

People who commonly don’t receive adequate care include those who are homeless, poor and unemployed, as well as Aboriginal and Torres Strait Islander people, and those on temporary visas. All tend to have higher rates of mental illness than the general population.

All people with mental distress and illness should be able to access mental health care. In theory, this is the basis of the federal government’s Better Access program, which allows people to access ten Medicare-subsided sessions per year with a psychologist or psychiatrist. It’s a useful initiative, but only for those who can afford the co-payments and live in areas where psychologists are available.

The budget’s commitment to extend the program to 20 sessions, at a cost of more than A$100 million, is welcome. But it doesn’t ensure equity. It also puts considerable strain on the psychology profession, which is already overloaded, especially in rural areas.

Like Headspace, Better Access risks excluding people with complex conditions or unstable mental illnesses. Those who are on the margins of society, and rely on the social safety net or charity, are unlikely to use this model of care.

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How do get the best value for our mental health services?

It’s hard to see the value-add of a narrow mental health response that funds a set of services which can only care for people with mild to moderate distress, while ignoring the people with the greatest disability.

The value-based care movement argues there are four elements that create value for people. Services should:

1. provide outcomes that matter to the person receiving the service. We need to decide whether every dollar spent on clinical treatment of mild to moderate depression and anxiety could be better spent on housing, trauma therapy, employment or other forms of social care

2. alleviate suffering. People should be able to form close and continuing relationships with clinicians, so their story and needs are known and trust can develop. The evidence for this relationship-based care is deep, but often services use multiple teams with health professionals who change frequently. We need to understand that continuity often matters to people and developing trust helps reduce distress

3. create calm, which means addressing the chaos people experience trying to access services. The experience of telling your story multiple times to multiple providers, and then finding the service won’t accept care, is traumatic and unnecessary

4. be cost-effective for the whole population who need mental health support, not just for the patients each service chooses to treat.

We need each of these government-funded services to report against these outcomes, including recording those people who are directed away from the services and essentially denied care.

Policies should be driven by data

We know little about the wider mental health needs of the Australian population. Our most recent national mental health survey was back in 2007. We know a lot about patients who present to services, but little about patients who don’t.

The largest providers of mental health care in the country, GPs, are invisible in the budget. Their patients, who have no other option for mental health care because they are too poor, too rural, too unwell or not unwell enough, are invisible in policy. Our only data from GPs is billing and prescribing data; hardly sufficient to understand the unmet needs of the Australian population.

If we are to meet the needs of all Australians, not just those who can access and afford care, we need more data. Offering simplistic solutions to complex problems means there are larger chasms for people to fall through.

Louise Stone, General practitioner; Clinical Associate Professor, ANU Medical School, Australian National University and Christine Phillips, Professor, Social Foundations of Medicine, Medical School, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Childcare is critical for COVID-19 recovery. We can’t just snap back to ‘normal’ funding arrangements

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Kate Noble, Victoria University; Jen Jackson, Victoria University, and Sarah Pilcher, Victoria University

This week, the federal government released a review of a relief package it put in place in April to ensure the early childhood education and care sector remained financially viable and children of essential workers, as well as vulnerable children, could continue to attend.

The review said in the week the relief package was announced

30% of providers faced closure due to a massive, shock withdrawal of families and another 25% of providers were not sure they could ever recover, even once the virus crisis has passed.

Under the emergency arrangements, the government is paying 50% of a childcare provider’s fee revenue up to the existing hourly rate cap, based on the enrolment numbers before parents started withdrawing their children because of the COVID-19 pandemic.

Childcare centres are prohibited from charging families an out-of-pocket fee, with the rest of their costs expected to be recouped through JobKeeper. Or they can limit costs by restricting the number of children in care, while prioritising children of essential workers.

On the release of the review of the scheme – due to end on June 28 – education minister Dan Tehan said the plan had “done its job” with 99% of services remaining open, and most providers saying the emergency response has helped with financial viability.

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Morrison has rescued childcare from COVID-19 collapse – but the details are still murky

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The package is far from perfect, and has helped most early childhood services but not all. The review reports a survey of around 54% of providers found the new payment had “at least to some extent” helped 86% of them stay open and retain staff and 76% to “remain financially viable”.

In early May, one provider of aged, disability and early childhood services, Uniting NSW and ACT, reported it was losing A$1 million a month under the scheme.

Other centres reporting heavy losses include those with high numbers of children attending already, and those where a high number of staff aren’t eligible for JobKeeper, such as if they are casuals or on temporary visas.

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The Conversation/AAP, CC BY-ND

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Some who are unhappy with the current arrangements want to revert to the previous system now. Others say a preemptive snap-back would be a big mistake, risking a second existential threat to the sector.

Dan Tehan has said the government is working on a transition back to the old system which “was working effectively”.

As we navigate uncharted territories over the coming months, the needs and vulnerabilities of children, families and the early childhood education and care workforce must also be at the forefront of our thinking.

Why we can’t just ‘snap back’

One of the main arguments for snapping back to the old system is based on increasing demand for services over the past month. But what if this demand is driven by childcare being free, and withers away once fees are reintroduced, when families are forced to cut costs?

COVID-19 restrictions have resulted in skyrocketing unemployment and underemployment. For many families, the transition back to work may be irregular and unpredictable. A sharp ending of the emergency measures may leave many families unable to access care when they need to get back to work.

On top of this, children’s routines have been disrupted, increasing levels of isolation and anxiety. Many children not previously considered vulnerable will now fall into this category, or become potentially vulnerable.

High quality early childhood education can help reduce the risk of vulnerability.

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1 in 5 kids start school with health or emotional difficulties that challenge their learning

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Meanwhile, early childhood providers are navigating rapid changes to attendance, staffing, funding and revenue. Under current arrangements, they are managing a steady growth in demand and a known stream of income. Reverting to the previous system will introduce a high degree of uncertainty.

It will also take time and careful planning to define a way forward for the complex diversity of early childhood services. The report on the rescue package highlights how different types of services have experienced COVID-19 in different ways: while 80% of centre-based child care services reported steep declines in attendance, only around half of home-based family day care services did so.

Early childhood educators are also in a tenuous position. They are among the lowest-paid Australians, with high levels of casual employment. Staff turnover is high, which undermines delivery of quality education, given the critical importance of secure relationships to children’s early learning and development.

Funding certainty in the coming months will support job security, which benefits children as well as workers.

A slow transition is the best

Governments’ short-term focus must be on balancing the needs of children and families with economic recovery. This may begin with a gradual return to something like the previous system, adjusted to meet our changed needs.

The current arrangements could be continued until September, followed by a gradual reduction, rather than a rapid rollback. After that we need some simple changes at a minimum:

1. suspend the activity test, to remove the link between parents’ work or study situation and children’s access, so all families and children can access early childhood services

2. allow increased absences, so families have the flexibility to keep their children home when they are unwell

3. improve affordability, with increases to childcare subsidy rates at all income levels to a cap

4. prioritise the needs of children most at risk, to ensure access for the most vulnerable children.

We must also plan for longer-term reform to build a more stable and sustainable early childhood sector for all Australian children, which is less likely to need rescuing in the event of future shocks. With the rescue package generating calls to permanently remove fees for early childhood services, governments need to remain open to more ambitious reforms in future.

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Quality childcare has become a necessity for Australian families, and for society. It’s time the government paid up

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Kate Noble, Education Policy Fellow, Mitchell Institute, Victoria University; Jen Jackson, Education Policy Lead, Mitchell Institute, Victoria University, and Sarah Pilcher, Policy Fellow, Mitchell Institute, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Explainer: what Donald Trump’s funding cuts to WHO mean for the world

Adam Kamradt-Scott, University of Sydney

US President Donald Trump has announced the US is cutting its funding to the World Health Organisation (WHO) – a decision that will have major implications for the global health response to the coronavirus pandemic.

The US contributes more than US$400 million to the WHO per year, though it is already US$200 million in arrears. It is the organisation’s largest donor and gives about 10 times what China does per year.

Trump has accused the organisation of mishandling and covering up the initial spread of COVID-19 in China, and of generally failing to take a harsher stance toward China.

What will Trump’s decision to cut funding mean for the organisation?

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Who are members of the WHO?

The WHO was established in 1948 to serve as the directing and coordinating authority in international health. It was created with a mandate to improve the health of the world’s population, and defined health as

a state of complete physical, mental and social well-being, and not merely the absence of disease or infirmity.

While various civil society, industry and faith-based organisations can observe WHO meetings, only countries are allowed to become members. Every May, member states attend the World Health Assembly in Geneva to set the WHO’s policy direction, approve the budget and review the organisation’s work.

Currently, there are 194 WHO member states, which means the organisation has one more member state than the United Nations.

The WHO headquarters in Geneva.
SALVATORE DI NOLFI/EPA

How is the WHO funded?

The WHO receives the majority of its funding from two primary sources. The first is membership dues from countries, which are described as “assessed contributions”.

Assessed contributions are calculated based on the gross domestic product and size of population, but they have not increased in real terms since the level of payments was frozen in the 1980s.

The second source of funding is voluntary contributions. These contributions, provided by governments, philanthropic organisations and private donations, are usually earmarked for specific projects or initiatives, meaning the WHO has less ability to reallocate them in the event of an emergency such as the COVID-19 pandemic.

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Have countries pulled funding before?

Over more than 70 years of operations, a number of countries have failed to pay their membership dues on time.

At one point the former Soviet Union announced it was withdrawing from the WHO and refused to pay its membership fees for several years. When it then rejoined in 1955, it argued for a reduction in its back dues, which was approved.

As a result of nonpayment of assessed contributions, we have seen several instances where the WHO has been on the verge of bankruptcy. Fortunately, governments have usually acted responsibly and eventually paid back their fees.

Has there been political criticism of the WHO before?

Yes. In 2009, the WHO was accused of acting too early in declaring swine flu a pandemic, in part over concerns it had been pressured by pharmaceutical companies.

Five years later, the organisation was accused of acting too late in declaring the West African Ebola outbreak a public health emergency.

Trump has criticised the WHO for not acting quickly enough in sending its experts to assess China’s efforts to contain COVID-19 and call out China’s lack of transparency over its handling of the initial stage of the crisis.

But these criticisms ignore China’s sovereignty. The WHO does not have the power to force member states to accept a team of WHO experts to conduct an assessment. The country must request WHO assistance.

Nor does the organisation have the power to force a country to share any information. It can only request.

Of course, Trump’s comments also ignore the fact the WHO did eventually send a team of experts to conduct an assessment in mid-February after finally obtaining Chinese approval. The results from this investigation provided important information about the virus and China’s efforts to halt its spread.

Does China have increasing influence over the WHO?

Understandably China has grown in power and economic influence since 2003, when then-Director General Gro Harlem Brundtland publicly criticised it for trying to hide the spread of the SARS virus.

China has also been criticised for blocking Taiwan’s bid to join the organisation. Taiwan has had one of the most robust responses to the COVID-19 crisis.

But China is ultimately just one of the WHO’s 194 member states. And one of the great ironies of Trump’s criticism is that the organisation has been criticised by other member states for decades for being influenced too heavily by the United States.

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China’s economic recovery depends on the rest of the world

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What happens if the US cuts funding?

If enacted, these funding cuts may cause the WHO to go bankrupt in the middle of a pandemic. That might mean the WHO has to fire staff, even as they are trying to help low- and middle-income countries save lives.

It will also mean the WHO is less able to coordinate international efforts around issues like vaccine research, procurement of personal protective equipment for health workers and providing technical assistance and experts to help countries fight the pandemic.

Trump has long been disdainful of multilateral organisations.
Stefani Reynolds / POOL /EPA

More broadly, if the US extends these cuts for other global health initiatives coordinated by the WHO, it will likely cause people in low income countries to lose access to vital medicines and health services. Lives will be lost.

There will also be a cost to the United States’ long-term strategic interests.

For decades, the world has looked to the US to provide leadership on global health issues. Due to Trump’s attempt to shift blame from his administration’s failures to prepare the US for the arrival of COVID-19, he has now signalled the US is no longer prepared to provide that leadership role.

And one thing we do know is that if nature abhors a vacuum, politics abhors it even more.

Adam Kamradt-Scott, Associate professor, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Government funding to Qantas and Virgin to ensure air services on key routes

Michelle Grattan, University of Canberra

The government has announced up to $165 million to enable Qantas and Virgin Australia to service crucial metropolitan and regional routes over the next two months, with a review after that on whether more support is needed.

The network includes all state and territory capitals and large regional centres such as Albury, Alice Springs, Coffs Harbour, Dubbo, Kalgoorlie, Mildura, Port Lincoln, Rockhampton, Tamworth, Townsville and Wagga Wagga.

Deputy Prime Minister Michael McCormack, who is Transport Minister, said sustaining aviation “is critical to protecting livelihoods and saving lives”.

He said the latest assistance was in addition to more than $1 billion the government had already given in support to the industry.

“As Australians are asked to stay home unless absolutely necessary, we are ensuring secure and affordable access for passengers who need to travel, including our essential workers such as frontline medical personnel and defence personnel, as well as supporting the movement of essential freight such as critical medicine and personal protective equipment,” McCormack said.

“This investment will also help Australians returning from overseas, who find themselves in a different city after 14 days of mandatory quarantine, complete their journey home safely.”

The underwriting will ensure that where flights operate at a loss, the airline is not out of pocket.

Flights will incorporate social distancing, to which both airlines are committed.

An embattled Virgin has been appealing for a bail out or the government to take an equity stake. But the government’s position has been it will not step in for a single airline.

Asked on Thursday whether it would bail out Virgin, Scott Morrison said “we as a government appreciate the value of two competitive, viable airlines in the Australian economy …

“Any responses that the Commonwealth government is going to have will be done on a sector wide basis.

“I’m aware that there are many market-based options that are currently being pursued, and I would wish those discussions every success.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

As Mediscare 2.0 takes centre stage, here’s what you need to know about hospital ‘cuts’ and cancer funding

Stephen Duckett, Grattan Institute

Health is proving a bone of contention in the 2019 election campaign. Labor has positioned health as a key point of difference, and the Coalition is arguing that Labor’s promises are untrue in one case and underfunded in another.

This cheat sheet will help you sort fact from fiction in two key health policy areas: public hospital funding and cancer care.

Public hospitals

In his budget reply, Opposition Leader Bill Shorten promised that Labor would restore every dollar the government had “cut” from public hospital funding.

The government counter-claimed that hospital funding has increased. So who is right?

The short answer is both.

In 2011, the then Labor government negotiated a funding agreement with the states for the Commonwealth to share 45% of the growth in the cost of public hospital care, funded at the “national efficient price”. This price is based on the average cost of the procedure, test or treatment.

The funding share was to increase to 50% of growth from July 1, 2017.

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At the 2013 election, the then Liberal opposition agreed to match that promise and, indeed, claimed they were the only ones who could be trusted to keep the promise:

A Coalition government will support the transition to the Commonwealth providing 50% growth funding of the efficient price are hospital services as proposed. But only the Coalition has the economic record to be able to deliver.

However, in the 2014 budget the Coalition scrapped its promise. The 2014 budget papers list the savings that were made by the decision. It was a clear and documented cut that the Coalition was proud to claim at the time.

The green line represents the Gillard hospital funding agreement; the blue line is the revised projection from the 2014 budget.
Budget 2014-15

Since then, the Turnbull government has backtracked on the 2014 cuts to health but only to restore sharing to 45% of the costs of growth.

Labor has estimated the impact of the gap between 45% and 50% on every public hospital in the country, and spruiks the difference at every opportunity.

Hospital costs increase faster than inflation because of growth and ageing population, the introduction of new technologies, and new approaches to treatment.

As a result, the Commonwealth’s existing 45% sharing policy drives increased spending, and so Commonwealth spending is now at record levels, albeit not at the even higher levels that Labor had promised.

Labor’s promise is, appropriately, phrased as an additional quantum of money to the states, sufficient to restore the 50% share in the cost of growth.

The public hospital funding gap comes down to how much of the growth in hospital funding each party has committed to.
Shutterstock

The details of how this funding should be operationalised to the states should be left to detailed negotiations after the election as it is not good practice for all the details of your negotiating position to be aired in the heat of a campaign.

So Labor is right to say hospital funding is lower than it would have been if the 50% growth share commitment had been maintained. But the Coalition is right to say the Commonwealth is spending more on hospital care than when it came to office.

Cancer care

The second major element of the Labor campaign was a high-profile A$2.3 billion package to address high out-of-pocket costs for Australians with cancer. The package has three key components:

• additional public hospital outpatient funding to reduce waiting times
• a new bulk-billing item for consultations
• more funding for MRI machines for cancer diagnosis.

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Labor’s cancer package would cut the cost of care, but beware of unintended side effects

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Labor did not promise to eliminate out-of-pocket costs for cancer, not even for consultations. It claimed bulk-billing would increase from 40% to 80% of consultations.

This promise has led to another showdown between Labor and the Coalition. Health Minister Greg Hunt claims to have found a A$6 billion black hole in Labor’s cancer policy.

The Coalition has produced a list of 421 Medicare items used for cancer treatment – including treatment in private hospitals – and noted Labor has not allocated funds to cover the fees specialists charge for these items.

But Labor rightly claims the 421-item list is not what it promised. Labor’s promise was about increasing the rate of bulk-billing for consultations and is based on a new item which is only available if the specialist bulk-bills.

Expect more claims and counter-claims in the weeks ahead.

Stephen Duckett, Director, Health Program, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

What the next government needs to do to tackle unfairness in school funding

Peter Goss, Grattan Institute

School funding debates in Australia are complex and messy. Stakeholders routinely complain about being hard done by. But the real unfairness is that state schools get less government funding than governments themselves say the schools need, and will continue to do so.

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Explaining Australia’s school funding debate: what’s at stake

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Meanwhile, many private schools are already funded at 100% of their target level, and the rest are on the way.

This fails the playground test: the lament of a five-year-old when an adult says one thing and does another. Australian school funding is unfair because it doesn’t live up to its own rules and standards.

School resources

Needs-based funding has broad public and political support. David Gonski’s 2011 report stated differences in educational outcomes should not be the result of differences in wealth, income, power or possessions. It’s written in legislation, which defines each school’s target level of government funding, or Schooling Resource Standard.

Under the SRS, every student receives a base amount of funding. When parents choose a non-government school, base funding is reduced according to their capacity to contribute. Students with higher needs attract more funding, regardless of their parents’ capacity to contribute.

No model is perfect, but the structure of the SRS is sound. Schools get more money if their students need it.

Parents can (generally) afford to exercise their right to choose, because non-government schools that serve disadvantaged communities are nearly fully funded by government. Meanwhile, taxpayers save money – at least in theory – when parents opt out of the state school system.

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Of course the formula could be improved. The SRS is long overdue for a refresh.

A proposed new model for calculating parent’s capacity to contribute, based on their family income, still needs to be finalised and legislated. But it’s clearly fairer than the previous model based on where families lived.

Looking beyond the formula, the federal Coalition’s A$1.2 billion Choice and Affordability Fund should go. It subsidises low-fee private schools even when parents can afford to pay their way. And education systems (such as Catholic, Lutheran and Anglican, plus state education departments) need to better account for how they distribute the funding they receive as a lump sum.

Theory doesn’t necessarily translate to practice

But these issues pale in comparison with the gap between funding theory and funding practice.

Very few schools actually get their target level of government funding. Most schools get less, some much less. A few schools get more. And a handful of high-fee private schools – the schools least in need of extra cash – get nearly three times what the formula says they need.

The discrepancies are not random. Government schools educate the bulk of disadvantaged students, but in 2017 were funded at 90% of SRS on average. The non-government school average was about 95%.

Recent analysis by the ABC shows the funding gap grew over the past decade. Because parents pay fees, non-government schools should never get more public dollars per student than comparable government schools. A decade ago, one in 20 private schools did. By 2016, it was more than one in three.

What about the coming decade?

Under the Coalition’s 2017 legislation, federal funding will transition to 80% of SRS for private schools and 20% for government schools. It will be consistent across states – a big improvement. And overfunded schools finally lose funding, something Labor never managed to achieve.

The 2017 legislation also requires minimum contributions from state governments. But based on the recently signed National School Reform Agreement, it looks like most government schools will be stuck at 95% of their target level (20% federal funding, 75% state), while private schools will hit 100% (80% federal, 20% state).

And there’s one last sting in the tail. The National School Reform Agreement allows state governments – for the first time – to claim depreciation, transport and part of their expenditure on regulatory authorities as up to 4% of their contribution to school funding. But only for government schools. This reduces effective funding for government schools by about A$2 billion per year by 2027.

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Under Coalition policy, the effective funding for each state school will plateau at 91% of SRS, while non-government schools get full whack. Private schools serving disadvantaged students will continue to get more taxpayer dollars than similar government schools. As a five-year-old might say, it’s not fair.

Labor is on course to deliver fairer funding, having committed to building on the 2017 legislation. Labor should lock in the new model for calculating parents’ capacity to contribute, instigate a broader review of the SRS formula and abolish the Choice and Affordability Fund.

Labor has also promised A$14 billion extra for government schools over a decade. This would lift the federal contribution to 22.2% of SRS by 2022. Yet government schools would still be underfunded relative to SRS, especially if states could continue to count depreciation, transport and regulatory expenditures as if they represented real money for schools.

If Labor wins the 2019 federal election, it should leverage its budget war chest to renegotiate the national agreements so states can no longer claim depreciation, transport and regulatory expenditures as part of their schools funding. That would put government schools on track to reach 97.2% of SRS. Not quite full funding, but within touching distance.

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For an average government school, the difference between 91% and 100% of SRS is about A$1,500 per student per year. With just half of that money, a typical state primary school could employ two dedicated instructional leaders to improve teaching practice and pay for relief time for other teachers to work with them. Fair funding just might transform the education of the children at that school and the thousands of schools like it.

Peter Goss, School Education Program Director, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison promises $78 million for combatting domestic violence

Michelle Grattan, University of Canberra

Prime Minister Scott Morrison is committing A$78 million to protect women and children against domestic violence, in a Monday speech with the theme of “Keeping Australians safe and secure”.

The money includes $60 million – over the next three years – in grants for organisations to provide emergency accommodation for those escaping family violence.

The government says the program will build up to 450 places and help up to 6,500 people annually. It will be structured to get contributions from other levels of government and from private sources.

The other $18 million will go to the Keeping Women Safe in their Homes program, which provides security upgrades and safety planning for women and children who need protection.

“We can’t ask women and children to leave dangerous homes if they have no place to go. And where it is safe, women and children survivors should be helped to remain in their homes and communities,” Morrison says in his speech, a text of which was released ahead of delivery.

He foreshadows more initiatives to deal with what has come to be a central issue for the Australian community. “We have also listened to the front-line workers and survivors throughout the consultations this past year.

“That is why one focus of our measures to be announced soon will be on prevention – on changing attitudes to violence, and on helping those who think violence is an option to stop,” he says.

In his wide-ranging speech covering foreign, local and personal security issues and risks, Morrison says the government has shown “the mettle to make the right calls on our nation’s security”, including by

• repairing Australia’s borders
• investing in the defence forces
• deporting violent criminals
• taking on domestic violence
• disrupting terrorist attacks, and
• restoring powers and resources to police, security and intelligence agencies.

Morrison says the government’s plan to keep people safe and secure “builds on our achievements and addresses the new and emerging threats we face as a country, as communities, families and individuals.

“These threats are both external and domestic.”

He presents a long list: “Regional tensions between the world’s great powers; heightened global instability; stiff headwinds facing the global economy; foreign interference; radical Islamist terrorism; people smuggling; natural disasters; organised crime; money laundering; biosecurity hazards; cybersecurity; the evil ice trade; violence against women on our streets; online predators and scammers; cyber-bullying of our children and elder abuse”.

Our plans and actions are designed to degrade, disrupt and destroy the impact of these threats to our nation’s security.

The government sees the issue of security, in various forms, as a political strength for it. The security plan follows Morrison’s recent speech outlining an economic plan including a commitment to the creation of 1.25 million jobs over five years.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

MYEFO rips A$130 million per year from research funding despite budget surplus

The shockwaves of this cut will be felt for years to come at Australian universities.
http://www.shutterstock.com

Margaret Gardner, Monash University

Yesterday morning, the mid-year budget update unveiled research funding cuts of A$328.5 million over the next four years. This budget raid on research was more than double the size expected by the university research community.

This new freeze on growth in research funding and PhD scholarships follows last year’s freeze on funding for student places.

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The effect will be felt immediately by the nation’s researchers and their research projects in positions lost and projects slowed, limited or not started. But the damage done will be felt for much longer – in inventions, ideas and opportunities missed.

Why has it been done?

As yet, there has been no adequate public explanation from government, save for two paragraphs in Education Minister Dan Tehan’s media release yesterday:

The decision to pause indexation of research block grant programs for 12 months, along with adjusting growth for RSP (the Research Support Program), will allow the government to prioritise education spending, including on regional higher education.

And this further par:

We have invested over A$350 million since the 2018-19 Budget to support students in regional and remote Australia.

In truth, most of Australia’s regional universities will lose millions of dollars more under the 2017 funding freeze than will be redistributed to them via this latest research cut. And under this new research freeze, they, too, will lose scholarships for PhD students – our next generation of brilliant research talent.

Research funding also goes towards keeping the lights on in libraries and labs so researchers can complete their work.
from http://www.shutterstock.com

Nationwide, the government will fund up to 500 fewer of these scholarships for PhD candidates next year due to the research funding freeze. That’s 500 fewer people who will dedicate their talent to the creation of new knowledge in the national interest.

The education minister has tried to repair the damage inflicted by the 2017 decision of his predecessor – Simon Birmingham – only to compound the damage with this second freeze. That’s throwing bad policy after bad.

Regional universities were among those hardest hit by the 2017 MYEFO decision to cut funding for student places. And that decision continues to cut deeper each year – it will be felt more in 2019 than 2018, and more in 2020 than 2019.

How this will affect Australian research

The harm this will inflict is manifold.

First, it will cut the research funding program. This scheme enables universities to pay the salaries of researchers and technicians whose work enables ground-breaking discoveries. It also funds keeping the lights on in labs and libraries.

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These overheads of research are not funded by competitive grants. For every A$100,000 an Australian university secures in competitive research grants, it must find an extra A$85,000 to be able to deliver that research. Where will universities find these funds?

Second, it will cut the research training program. This funds scholarships for PhD students to enable them to complete their higher degrees – a necessary first step on the way to a career in research. This is a cut into their brilliant careers, and Australia’s future research capacity.

Third, it damages Australia’s standing as a global research leader. Why would a great researcher come to or stay in Australia, when the government has sent a message that, in a time of budget surplus, it’s prepared to cut into research?

Research funding is critical to Australia’s status as a global research leader.
from http://www.shutterstock.com

Fourth, it will further undermine Australia’s position in research and development investment relative to our economic competitors. China now invests 2.1% of its GDP in research and development – while Australia’s total investment from all sectors in research and development (government, business and research institutions) is now just 1.88% of GDP. China’s economy is ten times bigger than Australia’s, but they’re investing 30 times more than we are.

Our government only spends A$10 billion on research and development each year. Only last Friday, it was revealed Australia’s government spending on research and development was already forecast to fall this year to its lowest level in four decades as a percentage of GDP – to 0.5%. This new research funding cut only worsens this situation.

With the budget in surplus, it makes no sense

University leaders knew research funding was at risk, and so jobs for researchers, technicians and researchers were at risk. But beyond these jobs are the projects they support and the Australians from all walks of life whose lives have or will be transformed by Australian research.

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Margaret Gardner: freezing university funding is out of step with the views of most Australians

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Universities Australia has stories of survivors of stroke, cervical cancer and family violence speaking about how crucial university research has been in the lives of people like them at #UniResearchChangesLives.

With a government budget surplus in sight, it makes no sense to cut the research capacity that will create jobs, income and new industries for Australia.

Margaret Gardner, President and Vice Chancellor, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.