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Will the next Parliament address this billion dollar gap in funding for Indigenous health?

Tax cuts that are due to take effect in 2024 and that will benefit high income earners disproportionately are estimated to be worth $15.7 billion per year.

Meanwhile, new research suggests that it would cost an extra $4.4 billion per year to ensure health funding for Aboriginal and Torres Strait Islander people that is commensurate with need.


Alison Barrett writes:

Research undertaken by Equity Economics for National Aboriginal Community Controlled Health Organisation (NACCHO) has identified a $4.4 billion per year gap in health expenditure for Aboriginal and Torres Strait Island people.

At a briefing to release the report, NACCHO CEO Pat Turner said “the state of Aboriginal health in this country is a national shame. This is clearly demonstrated by the underfunding of our sector”.

The overall burden of disease for Aboriginal and Torres Strait Islander people is 2.3 times that of non-Indigenous people.

However, the NACCHO report highlights that the additional need is “not reflected in health expenditure on Aboriginal and Torres Strait Islander people”.

The $4.4 billion gap in recurrent health expenditure includes Commonwealth, State and Territory Government expenditure as well as private health costs.

The gap in just Commonwealth Government expenditure is estimated to be $2.6 billion.

In a related media release, Turner said: “The Commonwealth has had the opportunity to fix its share of the funding gap in three big-spending budgets focused on stimulus measures during the pandemic. If it had invested in our sector, it could have delivered, at the same time, financial stimulus to the 550 local economies where our services are located.

“NACCHO calls upon all governments ahead of the election to close the funding gap for Aboriginal and Torres Strait Islander people.”

Infographic of report findings
Key findings from the report

Reforms needed

Structural reform is vitally needed to make any substantial headway in closing the gap in health burden and outcomes for Aboriginal and Torres Strait Islander people, the briefing was told.

“We want governments to sit down with us and agree to undertake structural reform and to invest in meaningful ways that close the funding gap,” NACCHO’s Deputy CEO Dr Dawn Casey said.

Speakers at the briefing stressed the importance of investing in primary healthcare, environmental health, housing and other infrastructure.

“For us in the primary health care world, it just highlights the many issues that we’ve been screaming out for now, for a number of years, particularly around rheumatic heart disease,” Vicki O’Donnell from Kimberley Aboriginal Medical Services told attendees.

“What it shows is there is so much more investment in the acute care that they’ve forgotten to look after people in their homes and for people to live longer.”

Communities have been calling out for action on infrastructure issues for many years, according to both Turner and O’Donnell. However, the pandemic really highlighted the lack of past government investment in infrastructure, as people were unable to isolate effectively due to overcrowded housing.

O’Donnell said that investment is needed in environmental health, including housing and running water in metropolitan and rural and remote Aboriginal and Torres Strait Island communities, and primary healthcare.

Provision of culturally safe and comprehensive primary healthcare is an important aspect of ACCHOs service. Advocating “for the other factors that impact on our people’s poor health”, such as environmental determinants and infrastructure is part of this work, Turner said.

Aboriginal and Torres Strait Islander people need to have access to mainstream and specialist services in their communities as well as ACCHOs, Casey told attendees, but healthcare services need to “become better at providing them with the culturally appropriate care they deserve”.

Adjunct Associate Professor at University of Canberra John Goss told the briefing: “The focus should be on expenditure for comprehensive primary health care and preventive health services because they really don’t need extra hospital spending. And we really have to get the best bang for the buck.”

The $4.4 billion healthcare expenditure gap does not include costs associated with delivering healthcare in a culturally safe and comprehensive way – additional analysis is required to determine these costs.

Casey said that the Commonwealth Department of Health (DOH) has been working with NACCHO to jointly make decisions about criteria for structural reform, and that ACCHOs will receive funding “through a four-year rolling program”.

“That will make a huge difference. People will have certainty about that money that they’re going to receive and it will be particularly important in retaining staff that is so badly needed across the sector,” Casey said.

According to Casey, the cooperation from the DOH is a result of the national agreement between all Australian governments and the Coalition of Aboriginal and Torres Strait Islander Peak Organisations as a commitment to finding new ways of “developing and implementing policies and programs that impact on the lives of Aboriginal and Torres Strait Islander people”.

However, “while we’re getting some improvements in some areas, the overall baseline, you could see, is insufficient and that’s because of the history of funding in our area”, Turner said.

VACCHO sector representative Ms Jill Gallagher AO said: “Empowerment is one of the keys to addressing the many major disadvantages Aboriginal and Torres Strait Islander people face. We need meaningful action – and that starts with having Aboriginal people in the driver’s seat. Putting Aboriginal health in Aboriginal hands is a major step forward to creating positive health outcomes for the community.”

Funding myths

NACCHO commissioned the research to estimate the gap in health expenditure in part to address a “myth persisting that Aboriginal people are overfunded”, according to Casey.

This has resulted in “hostile” and damaging commentary in the media that Aboriginal people receive “more than their fair share of funding”, highlighting the need to gain clear evidence about health expenditure, Casey said.

Equity Economics measured the gap in funding using health spending and burden of disease data from the Australian Institute of Health and Welfare and population data from the Australian Bureau of Statistics.

Jess Del Rio from Equity Economics told attendees at the briefing that to “achieve equitable health spending based on need for Aboriginal and Torres Strait Islander people”, the estimated additional health expenditure of $4.4 billion per year is required.

“If the aim is to close the gap, you can’t really close the gap by spending less than you need on people with the greatest need for health services,” Professor Ian Ring told the briefing.

Ring has written previously for Croakey about inadequate funding and needs-based funding for Aboriginal and Torres Strait Islander health, highlighting the longstanding nature of these concerns.


From Twitter


See Croakey’s archive of articles on Indigenous health

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