Hunt accuses Victoria of misleading claim on hospital funding cut

A claim by the Victorian government that $93 million was cut from Commonwealth hospital funding has been labelled misleading by the federal Health Minister, who says the state itself asked for less money.

The dispute came as the Grattan Institute argued Victoria was getting a raw deal on road and rail spending and would have received an extra $1 billion for transport infrastructure over the next four years if the federal funding allocation matched the state’s population.

Greg Hunt has contradicted Martin Foley’s claims about health funding.Credit:Sydney Morning Herald

On Wednesday morning Victorian Health Minister Martin Foley said it “beggars belief” that, during a pandemic, the federal government would cut hospital funding by what his department advised him was $93 million.

Mr Foley claimed the drop-off in funding for 2021 would lead to “less services, less doctors and less support”.

But federal Health Minister Greg Hunt told The Age that Victoria’s Health Department secretary, Euan Wallace, actually requested a lower amount of funding because the state’s level of activity in hospitals was not as high as it expected, meaning it required less federal cash.

“These are Victoria’s own figures, advised by the secretary of the department on an April 6 letter where they varied their own activity,” Mr Hunt said.

Health Department secretary Euan Wallace.Credit:Simon Schluter

A spokesman for Mr Hunt said Victoria’s share of health spending had increased consistently from $3.3 billion in 2012-13 to a forecast $6.9 billion by 2023-24.

“The Australian government is continuing its record level of investment in public hospitals … This budget sees an increase in hospital funding of $6 billion [across all states].”

The Grattan Institute think tank has found that while Victoria has 26 per cent of Australia’s population, it will receive about 24 per cent of the nation’s transport infrastructure investment over the forward estimates.

Transport Infrastructure Minister Jacinta Allan said she was disappointed the federal infrastructure spend meant “Victoria will not provide the jobs we need now”.

The planned Inland Rail project aims to reduce interstate freight transport times and remove trucks from congested roads.

If the state were to receive a funding share that matched the size of its population, Victoria would be pocketing about $13.7 billion over the next four years – an extra $1.25 billion.

The federal budget set aside $3 billion for spending on road and rail infrastructure in Victoria, the bulk of which – $2 billion – would be spent on an intermodal terminal for Inland Rail.

This compares with a $3.2 billion commitment to infrastructure projects in NSW.

But the budget papers show that no money was allocated to the terminal in the forward estimates and just $400 million was set aside for the next four years for priority road and rail projects in Victoria.

The federal government countered that this excluded money for local roads and road safety programs.

Transport and cities program director at the Grattan Institute Marion Terrill said population size was not the only way to fairly divide federal funds but warned against continually under-funding a populous state.

“The investment is lower than Victoria’s population share and you wouldn’t want that to be sustained over time,” Ms Terrill said.

Ryan Batchelor, executive director of progressive think tank McKell Institute in Victoria, said the transport infrastructure funding promoted by the federal government in press releases ahead of the budget was “impressive”, but “where rubber meets the road, the printed budget doesn’t live up to the rhetoric”.

A federal government spokesman said the government had committed $35.5 billion to Victorian infrastructure since coming into government in 2013.

“The federal government will continue to invest heavily in the infrastructure that Victorians want, need, expect and most importantly deserve and that’s exactly what last night’s budget delivered,” he said.

Ms Allan said her government “would always like to see Victoria get its fair share again”.

“We’re disappointed that the majority of infrastructure funding provided to Victoria will not provide the jobs we need now.”

Mr Foley said he was disappointed the Commonwealth had not yet allocated funding to the state’s proposed new quarantine facility in Mickleham. This is despite Victoria only informing the Commonwealth about its plans about two weeks ago.

But Mr Foley said he was encouraged by federal ministers’ positive language about the plan. He said the budget’s $2.3 billion boost to mental health services was a step forward, but questioned if the funding went “anywhere near” meeting the level of demand.

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