By Broede Carmody
Premier Jacinta Allan has walked back her government’s decision to axe hospital bailouts after weeks of pressure from health insiders who warned of bed closures, surgery delays and even the end of some breast screening and kidney dialysis services.
The change of tune, made days after the premier returned from leave, represents the second major U-turn in health policy within two months – all while Labor’s primary vote has taken a hit and the government is copping criticism over youth crime.
Premier Jacinta Allan has dialled back the tough talk on hospital budgets after returning from leave. Credit: AAP
A state government spokesperson on Tuesday would not say how Victoria would pay for hospital top-up funding, other than to insist discussions about final health service budgets continued. The change in position comes as Treasurer Tim Pallas embarks on a two-week trip to North America to meet with investors and global ratings agencies.
Health Minister Mary-Anne Thomas has been adamant that Victorian hospitals must get rid of “waste and duplication”, particularly unnecessary travel and excessive marketing spending.
While the government trumpeted record health spending in this year’s state budget, hospitals were also told their future budgets would be locked in with no top-up spending.
In one example, the state’s largest network, Monash Health, was asked to carve about $200 million out of its operating expenses.
The Age revealed last month that staff at three major Melbourne hospitals were told to help save money by turning off the lights whenever they leave a room.
Speaking to ABC Radio Melbourne on Tuesday, Allan confirmed for the first time that her government would cough up more money if hospital bosses went too far in slashing patient care to meet post-COVID budget targets. The major concession directly contradicts letters health services received this year informing them of no more bailouts.
“I appreciate there has been some uncertainty in recent weeks as we work with the leadership of hospitals to finalise the budgets for the coming years,” Allan said.
“If we do need to provide more funding to hospitals in addition to the record funding we provided in this year’s budget … then we will do so. Because we are firmly focused on patient care. We are firmly focused on working with our hospitals.”
Allan added that she expected the new budgets to be finalised by the middle of August.
But Coalition health spokeswoman Georgie Crozier said the devil would be in the detail.
“This is a government that is trying to paper over a very significant issue,” Crozier said. “They’re overseeing a health crisis as well as a budget crisis.”
Health groups also expressed a level of scepticism on Tuesday. Dr Jill Tomlinson, the Victorian president of the Australian Medical Association, said that doctors had been given “a small shadow of light … in what is currently a very deep, dark hole”.
“We certainly are very supportive of the possibility of health services receiving more funding than what had been foreshadowed in the modelled budgets,” Tomlinson said.
“But we note that the comments occur in a state that has recruitment freezes, pauses on elective surgery and significant uncertainty within the healthcare workforce.”
Victorian Healthcare Association chief executive Leigh Clarke said more detail was needed.
“The current one-year timeframe to achieve operational sustainability carries with it significant risk and that is why services have been left with some difficult choices,” Clarke said.
Dr Jill Tomlinson, president of the Victorian branch of the Australian Medical Association.Credit: Luis Enrique Ascui
Craig McGregor, the secretary of the Victorian Allied Health Professionals Association, agreed.
“We’ve had members ringing this morning and being called into the office, sections of the biomedical workforce being restructured, fixed-term contracts not being renewed,” he said.
“Really stringent austerity measures left, right and centre. And that continues notwithstanding the comments from the premier. It would seem to be a bit after-the-fact.”
The Age contacted Melbourne’s major hospitals for comment. In response, a spokesperson for the Royal Melbourne Hospital said it was working with the Department of Health to ensure continued high-quality care.
The May budget predicted Victoria’s net debt would rise to $187.8 billion by June 2028. That would leave taxpayers with a daily interest bill of $25 million.
The other major health policy reversal was Pallas granting health clinics a 12-month payroll tax amnesty for contractor GPs despite insisting for more than a year that there had been no changes to Victoria’s tax system. The announcement came after an exclusive survey for The Age found Labor’s primary vote had plummeted to below 30 per cent since Allan became premier.
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