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Legislative Assembly for the ACT: 1996 Week 8 Hansard (27 June) . . Page.. 2346 ..

MS TUCKER (5.31): The Greens will not be supporting this Bill. The reason why we will not be supporting it is that we think the purchaser-provider model needs much more debate before it is introduced into the provision of human services such as health. As Mr Berry said, another board probably will not make much difference, and this is really going back to the future. But the difference with this model is that Mrs Carnell is entrenching the purchaser-provider model by creating a separate statutory authority. We know that it is already happening and we know that there are real concerns. This was one of the overwhelming concerns expressed by people in the competition policy reform inquiry. They were very concerned that there had not been adequate opportunity to debate this whole new trend. There is no guarantee. The Government has not explained clearly to us why the introduction of this funding model has to be tied to improved efficiency in management. This is a funding model, and a funding model will not necessarily lead to improved delivery of health services or even cost savings. The only difference with previous boards and committees is that we have a different model to hang it all from - the purchaser-provider model. This is one of the latest fads in public administration; but I think it needs much closer analysis than it has been given, and we have to think very carefully about where and when it is appropriate.

Purchaser-provider is about the creation of internal markets. There may be some areas in the public sector where it is appropriate. But it is also being taken up too far too quickly. This was one of the issues that kept coming up in the competition inquiry. In Britain, where the purchaser-provider model has been pursued vigorously, the overall conclusion was that the reforms entailed a huge investment of time and resources and of more rather than less red tape. The rhetoric of these purchaser-provider reforms is very appealing - transparency, improving consumer choice and quality, bringing health budgets under control - but it has not worked in practice. Health costs in Britain have gone up by around 20 per cent since purchaser-provider models have been introduced. Sweden is presently abolishing internal markets. Especially in the ACT, we are just not big enough to justify the extra layer of administration.

Some of the costs associated with introducing competitive models into the public sector include management costs in drawing up, examining and deciding on tenders and monitoring the supervision of contracts. There is also the danger of contract failure and unproductive rivalry and waste through duplication of services. Equity and quality can also suffer if market models such as purchaser-provider discriminate in favour of cheaper providers. We think this money would be better spent in the delivery of health services. Basically, in a place as small as the ACT, with a limited number of providers, the likelihood is that, after initial tenders have been unsuccessful, providers will just drop off out of the market altogether and we will end up with the purchaser buying from the same provider each time, with this whole extra layer of administration in between. There are no particular gains in that occurring, and we certainly do not have a situation where this Government is saying that it will not be going out and seeking tenders from the private sector or the community sector.

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