JON STANHOPE & KHALID AHMED take a deep dive into the budget looking for the millions and millions of Labor’s election promises to fix its own health mess. But they come up empty; there’s nothing in the budget to support the spin. 

On Page 53 of the 2024-25 Budget Paper 3, Chief Minister and Treasurer Andrew Barr has taken especial steps, in a highlighted box, to inform Canberrans about “new healthcare initiatives worth $920 million”. 

Presumably, that figure reflects both recurrent and capital health initiatives. A ribbon in shocking pink and the size of a road sign screams: “Investing in public health care, $700 million”. 

The reader is entitled to assume that the $700 million is new, ie additional, recurrent funding for healthcare initiatives. 

An additional $700 million would indeed be a significant investment in healthcare and we would, without hesitation, commend the government for correcting the wrong, if belatedly, it has done to the ACT’s health system over the last decade in degrading it from a better-than-average system to the worst performing in the country. 

That is, if we could identify the $700 million in the financial statements and tables.

There is no reconciliation of this amount in the text that follows the claim, or elsewhere. There are, of course, a number of ways in which the government could have counted the $700 million in new recurrent funding. 

Table 1 provides the total expenditure on health in the 2023-24 and 2024-25 budgets as reported in the General Government Sector statements.

Several observations can be made regarding the information in this table.

Contrary to the quoted claim in the budget narrative, expenditure on health in 2024-25 is $2.5 billion and, in fact, does not reach $2.6 billion until two years later, in 2026-27.

The difference between the 2023-24 and 2024-25 budget estimates (row C) in principle reflects the additional spending on health in the 2024-25 budget. 

Notably the amount so budgeted decreases across the forward estimates. In fact, not even the cost overrun of $210 million posted in 2023-24 is covered across the forward estimates. 

The additional health spending totals $245 million over the period 2024-25 to 2026-27 and is unlikely to reach $700 million even if some allowance is made for the cost of new spending measures in 2027-28. 

In summary, we are simply unable to identify any commitment in the budget to an additional $700 million in health expenditure.

Even after counting every additional dollar over the 2023-24 estimated outcome (row D), the cumulative spending amounts to $685 million. However, that includes the growth in the cost of existing policies or undertakings made before the 2024-25 budget, for example, wage growth for existing employees, and the increase in the cost of medicines and supplies. It would be disingenuous, to the point of misleading, to claim all these costs as new initiatives.

It is also possible that the government is simply reallocating existing funds to new initiatives through savings and offsets. The descriptions of the health initiatives in pages 138 to 152 of Budget Paper 3 make for interesting reading and give credence to these possibilities.

For example, the initiative titled “Investing in public health care – Boosting health service funding for a growing population” at a cost of $101 million over four years is described as “support the growing cost of health care in the ACT. Key areas of growth include medical and surgical supplies, support services for patient care and personal protective equipment expenses.” 

We are totally bemused that the cost of medical supplies and protective equipment is presented in the budget as a new initiative. Surely the cost of medicine supplies, face masks and surgical gloves etcetera are covered by standard indexation?

On Page 141, the initiative titled “Better care for our community – Ongoing Delivery of Youth Mental Health Services” is at a net cost of “zero” dollars across all years. Its description states:

“The government will support continuation of the following youth mental health support programs: the Mind Map Online Youth Navigation Portal, Stepping Stones, Youth Aware of Mental Health, and the dialectical behaviour therapy program WOKE.

This initiative is offset by funding provided in the 2021-22 Budget initiative Better care in the community – More support for the community delivered mental health, and through the Healthy Canberra Grants program.

This initiative builds on previous government investment including Investing in public health care – Extend youth mental health programs initiative funded in the 2023-24 Budget.”

There you have it – continuing an existing program that was funded in the 2021-22 budget is a “new initiative”. Indeed, there are several other “continuations” packaged as new programs. We could go on and on, but we are sure you get the picture.

In a pre-budget media release, the government announced an increase of 800 health staff. What a nerve: to take a better than average performing hospital system, allow its performance to degrade to the worst in the country through neglect and real term cuts in funding, and then promise long overdue remediation as evidence of being a champion of the system.

We note that the Critical Services Building is scheduled to open in August, with as previously foreshadowed by the government, 148 new beds. 

The building is a scaled down version of the Tower Block project that was part of the hospital redevelopment project undertaken in 2010 and costed at the time at $1.3 billion (2010 dollars). Design funding of $63 million for the project was allocated in 2011. 

However, and sadly the Greens-Labor coalition redirected that funding, deferred the increase in capacity identified by the government in 2010 and is now delivering a scaled down facility almost a decade later. 

To put this in perspective, first-time voters in the coming ACT election would have been in kindergarten when the project was initially funded, and in primary school when it was scheduled to have been delivered. 

We have previously written about the shortage of hospital beds that emerged in 2016 and which has been exacerbated in the years since, reaching a shortfall of a staggering 182 beds in 2022-23. The new critical services facility, while welcome, will not meet even the government’s own demand estimates.

Additional beds, especially for a step change of this magnitude, require more staff, including medical officers, nurses, diagnostic and allied health professionals, personal care staff and administrative support staff.

Data from the Productivity Commission indicates that there is currently an average of 6.91 staff per bed across all of Australia with a jurisdictional variance of around 10 per cent. 

Based on the national average, the staffing requirement for 148 beds is therefore 1028. Based on the ACT’s current staffing ratio there is therefore a requirement for an additional 1042 staff not 800 as asserted by the ACT government.

Based on the Productivity Commission data the ACT government has budgeted for more than 200 fewer staff than optimally required. 

Frontline clinicians will obviously welcome the additional beds and staff that will enable them to deliver better and more timely care. 

However, if the staffing is not adequate, as appears to be the case, it will inevitably result in deleterious outcomes. Alternatively, it may be that the government has no intention of operationalising all the proposed new beds and theatres.

Remarkably, we have been unable to find any evidence in the budget papers of funding for the increase in staff numbers as announced. Needless to say, we have also not been able to find a single reference in the budget papers to an additional 800 staff or any associated funding.

Table K.1 on Page 355 details the full-time equivalent staff numbers across all ACT government directorates and agencies. For Canberra Health Services, the FTE staff in 2023-24 is reported at 9333, which is forecast to increase to 9504, an increase of 171 FTE. 

So, we ask the minister: where is the promised $700 million? Also, where are the additional 1028 staff required to service the 148 new beds?

Jon Stanhope is a former chief minister of the ACT and Dr Khalid Ahmed a former senior ACT Treasury official.