The working group felt that there were no significant barriers to obtaining uniform service funding agreements in the 100 local sector organizations that have entered into agreements under a single support programme, and that this should of course be done. This is an approach adopted in other jurisdictions, with the Queensland government setting up a task force on the implementation of individual contracts with municipal sector bodies in a larger and more complex environment than the ACT. The budget announced that the hospital funding model agreed in the Rudd government`s 2011 National Health Reform Agreement (NHRA) expires from July 2017. [2] The NRHA, approved by all jurisdictions, determines the joint funding of public hospitals by the Commonwealth and the states and territories. There is anecdotal evidence from the Community sector that there are some Community sector organisations that prefer the use of this unique, universally used instrument on the basis of greater security in their funding than other instruments. In practice, this is unlikely and both the Community sector and the government must make substantial savings if the current universal instrument is replaced by a small number of instruments better suited to the needs of the funding regime. This principle applies to both non-borrowing and purchase agreements, and both are discussed below. From July 2014 to July 2017, funds for public hospitals will be calculated according to the model agreed in the NHRA. An activity-by-activity funding approach is used to determine an “effective price” for hospital services. [3] The Commonwealth initially committed to achieving 45 per cent of effective price growth and rose to 50 per cent after 2017. States and territories will hold the balance.

But from July 2017, the Commonwealth contribution will no longer use this funding model. The Commonwealth`s contribution will be linked to changes in the Consumer Price Index (CPI) and population growth – essentially a return to the funding model that replaced the NHRA. If CPI movements are lower than the increase in the cost of medical services, states and territories will face a need for funding under this new formula. The government has indicated that these changes provide a “platform” for the transition to longer-term health funding agreements. [6] Their development would involve new agreements with the courts. The combined savings from the implementation of these two measures are expected to be $1.8 billion over four years. In value terms, a threshold of $100,000 is equivalent to about 1.25% of total community sector funding in the ACT.