State to lose $6m from health

TASMANIA will lose $6 million in federal health funding - some of it already spent - because its population has not grown as fast as predicted.

It means the budgets for this financial year that have just been received by the three new Tasmanian Health Organisations will have to be revised.

State Health Minister Michelle O'Byrne yesterday said she was concerned Tasmania would receive less federal money for health as a result of changes to the national specific purpose payments for healthcare.

One of the new prerequisites is that the financial needs of the states are predicted according to anticipated population growth.

State health ministers found out about the adjustments at a standing council on health meeting chaired by Ms O'Byrne last month.

Other states will receive federal funding cuts as large as $107 million.

The ministers have called on federal Treasury to urgently review the decision, which was part of the federal government's mid-year financial report.

A spokesman for Ms O'Byrne said the funding reduction was being applied retrospectively, so $2 million of Tasmania's $6 million reduction would be from last financial year.

The state will not be expected to return the money, but will have it trimmed from federal funding each month until the amount is made up.

Federal Health Minister Tanya Plibersek said federal health funding was determined by three factors.

One was population growth, as advised by the Australian Bureau of Statistics.

The others were an independently determined health costs inflation gauge and increased technology costs.

Ms O'Byrne said although Tasmania's loss was significantly less than other states, it would affect Tasmanian Health Organisation budgets.

``Service level agreements will need to be adjusted accordingly - the department and the Tasmanian Health Organisations are working through the issue,'' she said.

It is only a few months since Tasmanian Health Organisations chief executives were told they would not have to make further service cuts to meet budget constraints.

Michelle O'Byrne

Michelle O'Byrne


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