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Estimates: Frozen indexation of mental health programs

Estimates & Committees
Penny Wright 22 Oct 2014

Frozen indexation of mental health programs

Senator WRIGHT: I would like to ask now about the fact that it has emerged that there will be around about $20 million, arguably possibly more, of mental health program funding which will have its indexation frozen for up to four years. Is that correct?

Mr Booth: I am not sure. Could you give me some more information?

Senator WRIGHT: I might have to wait and get some more information about that.


Senator WRIGHT: I was not cut off, but I just did not have the information to assist the department with the questions. I now have it, so I could perhaps go to those programs.

CHAIR: Yes, you can have a few more minutes.

Senator WRIGHT: Thank you very much, Chair. Mr Booth, if you remember, I was asking you about the fact that it seems that there is around $20 million, arguably more, of mental health program funding which will have its indexation frozen for up to four years. I am going on a response to a question that was asked by Senator Wong of Senator Cormann after the budget. It was a question on notice on 2 July. It was with reference to the budget measure 'administered program indexation pause'. Are you familiar with that program?

Mr Booth: I know that there was an indexation pause across a number of programs, yes, but I am not certain of the detail.

Senator WRIGHT: That is the document I am referring to. I am just interested in understanding better what it means. I will take you to some of the programs that are mentioned in the Health portfolio. There were 32 programs altogether. I am interested in the mental health ones. In the national depression initiative, it looks like the total savings from the commencement date on 1 July 2015 for the following three years would be $1.020 million. There is the Better Access to Psychiatrists, Psychologists and GPs MBS program. The saving there appears to be $0.873 million. There is COAG Mental Health-additional places; COAG Mental Health-support for children; COAG Mental Health-support for day-to-day living in the community; COAG Mental Health-telephone counselling; Leadership in Mental Health Reform; Mental Health More Options Better Outcomes; and the National Mental Health Program. That might be it for the mental health area. They are the types of programs I am talking about. Are you familiar with what I am talking about?

Mr Booth: Yes, Senator. I can make some comments and my colleague Mr Cotterell may make some comments as well.

Senator WRIGHT: Thank you for that. I am interested in knowing what model was done to inform the government's decisions about which programs had their indexation frozen.

Mr Cotterell: This was a whole-of-government exercise where the indexation was frozen across a large number of programs across all portfolios. It was a decision taken at whole-of-government level, that large programs would need to freeze indexation as part of the general fiscal discipline. There was not specific modelling on these programs. The indexations are a very small percentage of the overall size of the programs. Each program is taking a save.

Senator WRIGHT: Who determined which programs were going to be targeted in the Department of Health? Was that a Department of Health decision or was that a decision from elsewhere?

Mr Cotterell: It was a whole-of-government decision and, as said, it applied to programs right across government, not just the Department of Health.

Senator WRIGHT: But not every Department of Health program was affected, so I am interested. I do not know what a whole-of-government-

Mr Cotterell: It is in relation to grants programs.

Senator WRIGHT: Was it every grants program or just some of them?

Mr Cotterell: Every grants program.

Senator WRIGHT: Is there any possibility that some service providers who are operating under these programs may not have enough funding to meet need as a result of the freeze to indexation?

Mr Booth: As Mr Cotterell said in terms of the mental health area, my understanding is that, regarding indexation, the savings do not come in until 2015. They are not there yet. There are indexations set. They are a fairly small amount of the total that is coming on. We will work with organisations to look at how they use their funding to try and ensure that there is no impact on service delivery.

Senator WRIGHT: I suppose I am coming from the viewpoint that, in terms of the allocation of funding for mental health in comparison to the burden of disease, many people argue that it is about half of what it should be, if you are going to do a direct contrast between burden of disease and the amount of funding that mental health gets. So we are looking at programs that have had their funding further reduced by having a freeze on the indexation. There will potentially be services that cannot be provided because less money sometimes means fewer services, but you do not have any modelling at this stage about what the effects will be?

Mr Booth: Not at this stage.

Senator WRIGHT: Where will the savings from that freeze go?

Mr Cotterell: All of the savings publicly announced in the budget will go into the Medical Research Future Fund.

Senator WRIGHT: My question is: how much, if any, of the funds of the medical research fund are going to mental health research? Would program 1 tonight be the time to ask about that?

Mr Booth: I think it is program 1. I think it is Acute Care, who were on this morning.

Ms Flanagan: Senator, your questions are going across whole of portfolio, in terms of the budget strategy and the budget decisions that were taken across the portfolio. If you specifically want to ask about Medical Research Future Fund, I think it is an outcome 1 later on today.

Senator WRIGHT: What I want to ascertain is: if mental health is an area that has been required to effectively take a cut because the indexation has been frozen, who is going to benefit from that? Will it actually go to mental health research? Where does it go? That is in the context of arguments that mental health does not get enough funding as it is.

Ms Flanagan: We can answer that later on.

Senator WRIGHT: Thank you very much.

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