NACCHO Aboriginal Health and #IndigenousEvaluationStrategy : The Australian Government has asked the @ozprodcom to develop a whole-of-government evaluation strategy for policies and programs affecting Indigenous Australians

 ” We are developing an evaluation strategy for Australian Government policies and programs affecting Aboriginal and Torres Strait Islander people.

 Better evidence about what works and why is needed to improve policies and programs.

The strategy will cover both Indigenous‑specific and mainstream policies and programs.”

 Romlie Mokak, Commissioner, Productivity Commission

Download the brochure HERE


Great ideas, engagement and interest in #IndigenousEvaluationStrategy workshop at #LowitjaConf2019 facilitated by Commissioner @RMokak and team members. Strong indicator of need for more attention on policy and program development and evaluation.

Evaluation can help policy-makers and communities determine:

  • whether government policies and programs are achieving their objectives
  • what influences whether government policies and programs are effective
  • how government policies and programs can be improved

We will engage widely across metropolitan, regional and remote locations.

We want to hear from individuals, communities and organisations.

  • How can Aboriginal and Torres Strait Islander knowledge, priorities and values be better integrated into policy and program evaluation?
  • What principles should guide Australian Government agencies’ evaluation efforts?
  • What should be the priority policy areas for future Australian Government evaluation efforts?
  • How can evaluation results be better used in policy and program design and implementation?

We are particularly keen to get input and advice from Aboriginal and Torres Strait Islander people, communities and organisations.

An issues paper will be released in June 2019.

Learn more about the project, or register your interest or call 1800 020 083

Indigenous Evaluation Strategy

Letter of Direction

Evaluation of policies and programs impacting on Indigenous Australians

I, Josh Frydenberg, Treasurer, pursuant to Parts 2 and 4 of the Productivity Commission Act 1998 hereby request the Productivity Commission to develop a whole-of-government evaluation strategy for policies and programs affecting Indigenous Australians. The Commission will also review the performance of agencies against the strategy over time, focusing on potential improvements and on lessons that may have broader application for all governments.


A number of high profile reports have highlighted the need for more evaluation of policies and programs that have an impact on Indigenous Australians. For example, the Commission’s Overcoming Indigenous Disadvantage Report 2016found that only a relatively small number of programs have been rigorously evaluated.

Improving outcomes for Indigenous Australians depends on agencies with responsibility for policies and programs affecting Indigenous Australians undertaking meaningful evaluations. The Commission is to develop a strategy to guide that evaluation effort.


The Commission should develop an evaluation strategy for policies and programs affecting Indigenous Australians, to be utilised by all Australian Government agencies. As part of the strategy, the Commission should:

  • establish a principles based framework for the evaluation of policies and programs affecting Indigenous Australians
  • identify priorities for evaluation
  • set out its approach for reviewing agencies’ conduct of evaluations against the strategy.

In developing the strategy, the Commission should consider:

  • how to engage Indigenous communities and incorporate Indigenous knowledge and perspectives
  • ethical approaches to evaluations
  • evaluation experience in Australia and overseas
  • relevant current or recent reviews commissioned or undertaken by Australian, state, territory or local government agencies
  • the availability and use of existing data, and the further development of other required data and information
  • areas in which there may be value in the Productivity Commission undertaking evaluation
  • how to translate evidence into practice and to embed evaluation in policy and program delivery.


The Commission should consult widely on the strategy, in particular with Indigenous people, communities and organisations (such as the Empowered Community regions), and with all levels of government. It should also consult with non-Indigenous organisations, and individuals responsible for administering and delivering relevant policies and programs.

The Commission should adopt a variety of consultation methods including seeking public submissions.

The Commission should provide the evaluation strategy and forward work program to Government within 15 months of commencement.

The Hon Josh Frydenberg MP

[10 April 2019]


NACCHO Aboriginal Health Alert : Shifting the Health Dial: 5 year Productivity Commission review and 6 key recommendations

 ” Better health care creates no losers : Australia is beset by a rising wave of complex chronic health conditions that will lead to many years of life spent in ill health, lower involvement in work and rising costs for the health care system. Suppliers rather than patients are the centre of the current system — an anachronism built on paternalism.

Prevention and management of these conditions by integrating care provided by GPs and other clinicians with care in hospitals is one antidote. Change can be orchestrated locally if the Australian, State and territory Governments move away from centralised control.

It is time to move to full adoption of patient-centred care, where the outcomes for, and experiences of, people are the key focus, but getting buy-in from clinicians is a critical part of this.

Reform of Australia’s health care system will not just be better for patients, but may save up to $140 billion over the next 20 years ”

For all 6 Recommendations see PART 3 Below

Download Paper 4 : Healthier Australians


All Productivity Papers can be viewed here

  • 4.9 million adults (nearly 30% of the adult population) are obese (p. 45)

Part 1 :Health system overhaul could boost economy: Productivity Commission- Media Report

A DRAMATIC overhaul of Australia’s health system could boost the economy by $200 billion over two decades, a Productivity Commission ­report has found.

The review blames a lack of communication between healthcare specialists for contributing to many of the issues faced by every Australian, and calls for a “reboot” of the way the system is integrated.

The 1200-page “Shifting the Dial” report, released 24 October , has found that despite the average Australian living to 82.8 years — the third highest among developed countries — Australians are spending the longest amount of time in ill health.

The wide ranging review also warns that fundamental flaws in the university system have led to one in every five graduates being unable to get a full-time job.

Productivity Commission chairman Peter Harris criticised “non-existent communication between different parts of the health system” and recommended the federal government consider strategic overhauls to the way the sector operates.

The review warns that 17.5 per cent of Australians have mental or behavioural problems and a suicide rate double the economically best-performing countries.

It found less than 20 per cent of GPs know when their patients have been into an emergency ward, compared with 68 per cent in the Netherlands and 56 per cent in New Zealand.

Treasurer Scott Morrison said the findings should force governments and the sector to consider the effectiveness of the health system.

“Improving the health of Australians is not just about enhancing our quality of life, it’s an economic growth strategy,” Mr Morrison will say when launching the findings today.

“Healthy and happy people are naturally more productive people.”

The report suggests linking university funding to the success of students, seizing on data showing almost 25 per cent of graduates who find jobs take work in areas not relevant to the degree they had studied

Productivity Commission report reinforces that health is wealth—and it’s time for change

‘Individual health leads to national wealth, and it’s great to see that the Productivity Commission has recognised this in its Shifting the dial: 5 year productivity review report released today’, says Alison Verhoeven, Chief Executive of the Australian Healthcare and Hospitals Association (AHHA).

‘It’s also gratifying that the report recommends shifting the focus of our health system from providers to patients.

‘AHHA has been advocating for some years now for better patient-centred and integrated care, with attached funding and care pathways, and information flows.

‘We have also been advocating for health funding mechanisms based on value and outcomes, rather than on service volumes—which the Commission is also recommending.

‘We also support the Commission’s call for better integration of primary care and hospital care at a local level, with a view to boosting preventative measures and minimising unnecessary hospital admissions.
‘We think it is incumbent on the Commonwealth to use the recommendations in this report as a starting point for negotiating its post-2020 public hospital funding agreement with the states and territories.

‘This could also be a good opportunity for the Commonwealth and the states and territories to work in partnership to deliver a unified primary healthcare and hospital system focused on people receiving the care they need and want, at the right time in the right place by the right provider.’
(Source: AHHA)

Part 2 : Productivity Commission media briefing

Mediocrity beckons if we let it

In the future, we cannot rely on high commodity prices or, given an ageing Australia, labour participation rates, to drive national income.

We might try to invest more to add to growth, but capital must be paid for, and investment to GDP rates are already at historically high levels, so there may not be much room to move.

That means that innovation and learning — doing things better — is the key for prosperity. Yet this has languished in Australia (and many other countries) for a decade.

A new agenda focused on individuals

Getting better outcomes involves new agendas involving the non market economy (mainly education and healthcare), the innovation system, using data, creating well-functioning cities, and re-building confidence in institutions. And no one wants clogged cities or arteries.

Better health care creates no losers

Australia is beset by a rising wave of complex chronic health conditions that will lead to many years of life spent in ill health, lower involvement in work and rising costs for the health care system. Suppliers rather than patients are the centre of the current system — an anachronism built on paternalism.

Prevention and management of these conditions by integrating care provided by GPs and other clinicians with care in hospitals is one antidote. Change can be orchestrated locally if the Australian, State and territory Governments move away from centralised control.

It is time to move to full adoption of patient-centred care, where the outcomes for, and experiences of, people are the key focus, but getting buy-in from clinicians is a critical part of this.

Reform of Australia’s health care system will not just be better for patients, but may save up to $140 billion over the next 20 years.

Australia’s education system is a mixed bag of excellence and mediocrity

Slipping school results and concerns about teaching quality raise questions about how Australians will adapt to the wave of changes in the economy over the coming decades.

The vocational education and training system is in disarray.

It will not be too long before universities will be the key vehicle for skill formation, yet their teaching function plays a subordinate role to their research role, and the outcomes for many graduates are poor.

Better teaching quality, re-building the VET sector, genuine options for acquiring new skills as people switch jobs and careers, using new technological models for educating people, and creating teaching-only universities are just a few of the many changes that need to be made.

Excising Utopia from Australia’s city policies

Australian cities are under pressure — rising population and congestion, poor infrastructure decisions, ad hoc and anticompetitive planning and zoning, and an unsustainable funding basis for roads. Stamp duties are bad taxes, a bonanza in times of rising housing prices, but unfair and inefficient.

Road funds that respond to where people want roads is one step to change, as is a switch to taxes on unimproved land value. There are good models of zoning and planning that could readily be adopted, and infrastructure decisions could be enhanced by taking out the ‘Utopia’ factor in their preparation.

Cooperative reform is still possible

While Australians’ trust in governments and their institutions is low and fragile, there are practical things that can be done to make governments work better.

A key will be that the Council of Australian Governments chooses to restore its role as a vehicle for economic and social reform.

The scope for the vital big reforms will require commitment to a joint reform agenda by all jurisdictions. This should be negotiated in 2018, collecting all ideas into a cohesive whole.

Prosecute the usual suspects too

Of course, market-based reforms are evident and available — to address the persistent failure of Australia’s energy market, redundant regulations, and flaws in workplace relations — but we know this already.


  • From 2003-04 to 2015-16, the gains to market sector GDP from ‘doing things better’ have been nearly zero (p. 33)
  • The ‘non-market’ sector (including health care and social services, education and training, and public administration and safety) accounts for 27% of employment in Australia (p. 192)


  • More than 10 million Australians have three or more long-term conditions (SP4, p. 10)
  • Years of life spent in ill-health are nearly 11 years — highest in the OECD (p. 45)
  • 4.9 million adults (nearly 30% of the adult population) are obese (p. 45)
  • 11.7 million people have no or low exercise levels (2 in 3 adults) ( p. 45)
  • Moving from poor health to fair health increases labour participation rates by 34 percentage points (SP4. p. 14)
  • 75% of acute bronchitis is treated with antibiotics. The appropriate rate is close to zero (p. 61)
  • Unnecessary waiting in doctor’s rooms costs Australians around $1 billion annually in lost time (p. 64)
  • 40% of people with a health-related qualification have inadequate health literacy (p. 65)

Part 3 Recommendation :

2.1 Implement nimble funding arrangements at the regional level

The Australian, State and Territory Governments should allocate (modest) funding pools to Primary Health Networks and Local Hospital Networks for improving population health, managing chronic conditions and reducing hospitalisation at the regional level.


Set aside a small share (say 2 to 3 per cent) of activity-based funding to hospitals to create a Prevention and Chronic Condition Management Fund (PCCMF) for each Local Hospital Network (LHN) to commission activities that improve population health and service quality, or reduce hospitalisations and broader health expenditures.

Where they are directly related to prevention and management of chronic conditions, allocate the expected funding from the Practice Incentives Program and other Medical Benefit Schedule items to Primary Health Networks (PHNs) in each region.

Give LHNs autonomy about how they spend from their PCCMF (including a license to fund innovations) and give them certainty over future funding contributions to allow planning.

Assess the returns from PCCMF investments. Let LHNs retain some of the returns from PCCMFs, with the remainder shared among Australian, State and Territory Governments.

Disseminate the lessons from effective interventions funded through PCCMFs to other regions.

Ensure formal collaboration between LHNs and PHNs to improve population health and the effectiveness and efficiency of primary health care. Where relevant, involve other regional groups with capabilities in managing population health, including Local Governments and community organisations.

The Australian Government should allow LHNs to commission the services of GPs by amending section 19 of the Health Insurance Act 1973, with the proviso that the LHNs operate in formal agreement with their region’s PHN. The Australian Government should also remove any administrative constraints on PHNs allying with LHNs to commission GP services.

Amend the Australian Government’s prospective Health Care Home model so that LHNs and PHNs can introduce local variants, with supplementary funding and design features determined by them through collaboration.

Clinician buy-in is essential to achieving change and will be led by PHNs, which have often built good relationships with local leaders.

Further details are in Conclusions 6.1, 6.2 and 6.3 of Supporting Paper 5.

Recommendation 2.2 Eliminate low-value health interventions

Australian governments should revise their policies to more rapidly reduce the use of low-value health interventions.


More quickly respond to international assessments indicating low-value medical interventions.

Create more comprehensive guidelines and advisory ‘do not do’ lists.

Disseminate best practice to health professionals, principally through the various medical colleges, the Australian Commission on Safety and Quality in Health Care and similar state-based bodies.

Collect and divulge data at the hospital and clinician level for episodes of care that lead to hospital-acquired complications and for interventions that have ambiguous clinical impacts (such as knee arthroscopies).

Provide accessible advice to patients about potentially low-value services and improve their health literacy using the measures covered by Recommendation 2.3.

Ensure that ongoing processes for reviewing existing Medical Benefit Schedule items are more rapid and comprehensive than occurred under the arrangements prior to the Robinson Review.

Give priority to de-funding interventions that demonstrably fail cost effectiveness tests, moving from volume to value.

Remove the tax rebate for private health insurance ancillaries.

More details are in Conclusion 7.1 of Supporting Paper 5.

Recommendation 2.3 Make the patient the centre of care

All Australian governments should re-configure the health care system around the principles of patient-centred care, with this implemented within a five year timeframe.


Develop well-defined measures of people’s experience of care and the outcomes they observe (so-called Patient Reported Experience and Outcome Measures — PREMs and PROMs), and integrate these into disease registries. The Australian Commission on Safety and Quality in Health Care should be the orchestrator of these developments.

Publish results so clinicians, hospitals and patients see how the system is working at a grass roots level.

Consult with consumer groups representing patients and with the various medical colleges to achieve acceptance of the new model and its implications for practices.

Improve patient health literacy to a level that far more people would have a capacity to self-manage chronic conditions, make informed end of life decisions, and be able to solicit from, and interpret information given by, clinicians (Supporting Paper 5).

Use My Health Record and other IT platforms to involve people in their health decisions.

Give people a greater capacity for making choices between alternative suppliers, underpinned by transparent measures of prices and performance.

Give greater weight to patient convenience, and develop and disseminate technologies that assist this.

Systematically include an understanding of patient-centric care in the education and training of new health professionals, and use the various professional bodies to disseminate an understanding of the issues to existing health professionals.

Use data analysis to identify very high service users across all major service types and discover the reasons for their high use (Recommendation 2.4). Use this to customise care plans and other targeted early interventions to improve their health status and reduce their use of services.

Recommendation 2.4 Use information better

Australian governments should cooperate to remove the current messy, partial and duplicated presentation of information and data, and provide easy access to health care data for providers, researchers and consumers.


Identify the key relevant health datasets, including those that provide aggregated information about population health, and ensure that:

  • links to health datasets and survey results are included on the Australian Institute of Health and Welfare website
  • registers of health care data are created and published on, in line with recommendation 6.4 of the Productivity Commission’s inquiry into Data Availability and Use (PCDAU).

Implement recommendation 6.6 of the PCDAU regarding the establishment of the Office of the National Data Custodian, which will have responsibility for the implementation of data management policy for health care and other data.

Streamline approval processes for access to data, in line with recommendation 6.7 of the PCDAU.

In doing so, priority should be given to making health datasets available, with a focus on projects that:

  • allow evaluation of initiatives by Primary Health Networks and Local Hospital Networks at the regional level
  • use data analytics to discover bottlenecks in integrated care systems, prospectively identify high-risk groups, identify the long-run effectiveness of preventative measures, and better isolate low-value interventions.

Governments should cooperate to reduce the existing inconsistencies in the multiple population health surveys and hospital and other satisfaction/experience surveys, accompanied by the development of benchmarks for gauging the relative performance of health care providers and purchasers across all national regions.

Any webpages or other sources that provide information to consumers about health care services should be comprehensive and maintained, and if that is not cost-effective, they should cease to be funded by governments.

Ensure uptake of electronic medical records by health professionals and hospitals by making them easy to use, and in some cases, linking access to additional funding to their adoption of integrated information systems.

Use My Health Record for both information and as a platform for providing clinically proven advice to patients, with the potential development of links between it and wearable technologies.

The Australian Commission on Safety and Quality in Health Care, in collaboration with other State and Territory Government agencies, should be a clearinghouse for the results of evaluations of regional innovations, and report on the diffusion of substantiated best practices across regions.

Create a cooperative ‘Champions Program’ that uses people with hands-on-experience with innovations to assist others to copy them.

Recommendation 2.5 Embrace technology to change the pharmacy model

The Australian Government should move away from community pharmacy as the vehicle for dispensing medicines to a model that anticipates automatic dispensing in a majority of locations, supervised by a suitably qualified person. In clinical settings, pharmacists should play a new remunerated collaborative role with other primary health professionals where there is evidence of the cost-effectiveness of this approach.


Identify the best dispensing technologies from those that are currently available.

Determine the necessary credentials for the supervisor of automated dispensing, but with those qualifications involving substantially less training than currently are required for pharmacists.

Consult with the relevant training institutions — most likely in the vocational education and training sector — to develop courses for such qualifications.

Inform the various university departments of pharmacy about the reduced need for future supply of pharmacists.

Determine the locations for automated dispensing, taking into account accessibility and security, but eliminating unnecessary boundaries on locations now endemic in pharmacy planning rules.

Trial the technologies in remote and rural areas where there are currently shortages of pharmacists.

In consultation with Primary Health Networks, Local Hospital Networks, the various medical colleges and any other relevant clinical bodies, define the role of pharmacists in a collaborative clinical model.

Identify where it is cost effective to use pharmacists in primary health, taking into account the capabilities of lower-cost health professionals, and the increasingly greater capacity for information systems to provide accurate advice about medicines to GPs and other professionals.

Phase in the changes after the Sixth Pharmacy Agreement has lapsed, using the time to test it in some natural settings to refine the model.

Recommendation 2.6 Amend alcohol taxation arrangements

The Australian Government should move towards an alcohol tax system that removes the current concessional treatment of high-alcohol, low-value products, primarily cheap cask and fortified wines.


Ideally, this would be achieved through a uniform volumetric tax rate for alcoholic beverages, calibrated to reflect the health impacts of alcohol consumption. Exemptions could be made for the first 1.15 per cent of alcohol (consistent with the current policy for beer).

A transition period would be needed to allow the wine industry time to adapt.

Phasing out the existing range of concessional alcohol excise rates — including for draught beer and brandy — would also help to simplify the tax system and make it less distortionary.

Alternative models that would avoid significant price reductions for expensive products — with the regressive income impacts this would entail — could include a modified WET (wine equalisation tax) system with a minimum volumetric tax or the introduction of floor price regulation.

However, further work on these options is needed to determine their feasibility in light of likely administrative burdens and implementation issues.

Tax measures should be accompanied by other policies that increase education about alcohol and assist people with alcohol-related conditions.

NACCHO health news:For true primary healthcare and better outcomes, support Aboriginal community controlled healthcare

Selwyn B

Selwyn Button, CEO of the NACCHO affiliates QAIHC (Queensland Aboriginal and Islander Health Council.) writes

As published this week in Melissa Sweet’s health blog that we highly recommend you follow


Over the past few weeks, authorities have released a number of reports about the performance and expenditure of our national health system, and some of these relate directly to efforts aimed at improving the health of Aboriginal and Torres Strait Islander people.

View reports here

This might seem a good thing on face value, as we need to know whether our efforts are making any difference, and where to direct resources in future to ensure ongoing outcomes.

But if this information is used without the appropriate context, it may be used as a means of reducing expenditure on Aboriginal and Torres Strait Islander health, in the name of creating ”efficiencies”.

This presents a significant risk for Aboriginal and Torres Strait Islander communities, as we continue efforts in improving the health of our people, while remaining at the whim of Ministers and government officials who rely on this information to determine policy priorities and resource investments.

What is needed now is for governments to re-think how we analyse, interpret and use data to inform ongoing priorities, practice and future innovation.

Firstly, let’s take the National Aboriginal and Torres Strait Islander Health Performance Framework report released in early 2013. and used as the main body of evidence for the Prime Minister’s Close the Gap Report card.

This report clearly demonstrated that the most significant gains in access to care and improvement of outcomes is and continues to be achieved through the national network of community controlled health services.

Upward of 75% of health improvements outlined in the report were directly attributed to the community controlled sector, and clearly justifies the increased investment into community controlled services as the most appropriate provider of healthcare for Indigenous people as they are making the best health gains.

Secondly, let’s consider the most recent Indigenous Expenditure report of 2012 produced by the Productivity Commission, that averages overall Medicare expenditure on Indigenous people as 60 cents in the dollar compared to the rest of the Australian population.

As many readers would be aware, Medicare was created as a safety net to ensure that all Australians get access to required care and benefits through quality primary health care services.

With community controlled services focused on providing comprehensive primary health care to our people, efforts in increasing access to an individual’s entitlements through Medicare can and will be best achieved by our organisations.

In spite of this data, we now have more recent releases stating the overall expenditure of the National health budget is 1.5 times greater for Indigenous people than the broader population.

Additionally, we have received further data stating that mortality rates for certain illnesses are only reducing by slight amounts and chronic diseases are still high placing burden upon the public health system.

Although much of this information is already 2 years old by the time it is released, it fails to identify why much of the burden is borne by secondary and tertiary public health systems, as access to comprehensive primary health care is still limited for our people nationally.

Consequently, when you don’t have access to quality primary health care, many of our people will present at secondary and tertiary facilities when their issues have escalated to a point where hospital is the last resort, requiring treatment for not only one health condition, but generally 2 or 3 issues.

Even though we have over 150 community controlled organisations across the country, our services do not exist in every corner of the nation, and fundamentally this would be impossible to achieve without enormous costs involved.

Alternatively, what we should be aiming to achieve is to have a strong community controlled presence providing quality care to our communities in all areas with populations greater than 900 residents focused on increasing access to comprehensive primary health care.

Why primary health care? Current and historical research by credible researchers have proven that the most effective means of delivering care and improving outcomes for Indigenous people is through community controlled services.

Health economists such as Professor Theo Vos and colleagues identified this in their work in assessing cost effectiveness of primary prevention activities across all health providers. This work clearly highlighted that compared with government-run, mainstream and private services, community controlled organisations achieve close to 50% better outcomes than other providers in delivering care to our own people.

Although this method was documented to be more expensive than other models, the focus on outcomes should not be lost, as the only variable included in his analysis that increased the overall expenditure against the model was transportation services for clients.

Due to the implementation of a comprehensive primary health care model, transport services are a core component and will always be included within the community controlled delivery of care, which does not diminish the model but does and will continue to achieve far greater outcomes.

Unfortunately, the notion of ‘If you build it he will come..’ only works for Kevin Costner in the movies, and does not work to improve health outcomes for our people.

With all this data now publicly available for all to review and analyse, we must hope that in determining future policy and funding priorities for Indigenous health care, consideration is given to understanding the context and reliablity of the information.

Importantly, there already exists some credible evidence that encapsulates comprehensive primary health care delivery into a set of core functions. This research was conducted and undertaken as a partnership between all healthcare providers, and should be the central component of any current and future policy debate about improving the health of Indigenous people, as it is widely accepted within the community controlled sector as the gold-standard in health service delivery for our people.

This work is the Core Functions of Primary Health Care in the Northern Territory, and with minimal adjustments to ensure local contexts are considered can and is applicable across all parts of the country. Utilising the Core Functions as a means to support improving outcomes goes a long way to encapsulate high quality service delivery standards with current data and information to ensure that we are all targeting the right priorities, through appropriate mechanisms.

This was not evident at start of the COAG investment to support overall Indigenous improvements, which saw over 65% of the entire $1.6B commitment channelled into mainstream and government-run service providers, as it was determined the most effective way to improve outcomes. Data was used showing that 70% of our people access care through government-run and mainstream services.

New data and information available now rebuts this myth that community controlled services have struggled with over the last 4 years.

Information now available within the community controlled sector shows that over 40% of Indigenous Queenslanders access care regularly through community controlled services, yet we are not in every part of the state.

With the end of the current Indigenous Health National Partnership Agreement set for 30 June 2013, we need to ensure that all of the relevant information and context is considered as part of ongoing discussions, policy setting and resource allocations to improve the health of our people.

Consequently, we are confident that this evidence will lead to what we have been seeking for many years – an increased investment in those services known to make a difference to the health of our people. That is community controlled organisations.

• Follow Selwyn Button on Twitter @qaihc

NACCHO News:Indigenous spend topping $25 billion:plus Q& A about the report

From the Australian 4 September 2012

Download report here

Or for the 33 page health report download

PUBLIC spending on indigenous Australia jumped to $25.4 billion in just two years amid a growing debate over whether the cash is improving education, health and employment for 575,000 people. A surge in school funding tops the spending increases revealed in a federal government analysis that shows total outlays have risen to $44,128 for every indigenous person.

The 300-page report, to be released today, confirms the challenges facing Aboriginal communities as spending on public order and safety rises 20 per cent to $3.2bn. Community safety now costs $5555 a person in indigenous Australia each year, six times the amount per capita for similar services in the rest of the country. The findings heighten the debate over whether current policies are halting indigenous disadvantage, in the wake of separate government reports that warned of “dismal” results from billions of dollars in taxpayer funds.

The Productivity Commission checked 86 spending programs to conclude that federal, state and local government spending reached $25.4bn in the 2011 financial year, 5.6 per cent of public spending on all Australians. Indigenous Australians make up 2.6 per cent of the population. The total outlay is up 16 per cent from the commission’s last Indigenous Expenditure Report, for the 2009 financial year, when annual outlay for each indigenous person was $40,228. Governments spent $19,589 a person last year on the non-indigenous.

Outlays on school education rose more than any of the main categories tracked by the report, with total funding up 50 per cent over two years to $3.1bn across all governments. Social security rose 10 per cent over the same period to $3.8bn, with the amount spent per person each year going from $6264 to $6527. Labour and employment programs cost $1910 a person, about five times the amount spent on similar measures for non-indigenous people. The total outlay on these schemes was $1.1bn, up 12 per cent from the same report two years ago.

While the report makes few findings on the effectiveness of each program, it comes at a time when other government studies warn of slow progress on “closing the gap” between indigenous and mainstream Australia. The rise from $21.9bn to $25.4bn took place from 2008-09 to 2010-11, an increase of 16 per cent. Inflation would account for about 5 per cent of the increase over the two years.

The number of indigenous people used in the report’s calculations rose from about 545,000 in the first to 575,000 in the second, and the Productivity Commission said that changes over time could reflect several factors, including a rise in demand for services. The amount spent per person rose 10 per cent to $44,128 over the two years, about twice the rate of inflation.

“The Australian government accounted for $11.5bn (45 per cent) of direct indigenous expenditure, with the remaining $13.9bn (55 per cent) provided by state and territory governments,” the commission says. The rise comes at a vexed time for policymakers after a series of dire warnings including alarm about the “huge gap” between policy intent and policy execution in a report by the federal Department of Finance last year

. “This major investment, maintained over so many years, has yielded dismally poor returns to date,” the department concluded in a report obtained by the Seven Network under Freedom of Information laws one year ago. Productivity Commission chairman Gary Banks declared last year that a majority of indicators showed “no improvement” in indigenous lives.

Today’s report makes no findings on the social outcomes from the spending, offering instead a collation of the levels and patterns of the outlays by federal, state and local governments. A separate analysis for federal and state governments found in June that progress was “slow” on the national plan to close the gap in indigenous death rates compared with national averages.

Today’s report shows that South Australia spends more on early child development, education and training than other states, with an average outlay of $9483 for every indigenous person. The state also has the highest outlay per indigenous student in primary and secondary schools. Of the total $39bn spent on school education across the country, about 40 per cent goes to secondary schools.

But in Aboriginal Australia only 31 per cent goes to secondary schools. “Social security support was the largest area of economic participation expenditure for indigenous Australians,” the commission says. Payments to the jobless accounted for 17 per cent of indigenous social security outlays, compared to 7.1 per cent of outlays for the non-indigenous

In another sign of the shorter life expectancy, assistance to the aged makes up only 7.4 per cent of payments to indigenous Australians. For the non-indigenous, the ratio is 37 per cent.

What is the purpose of the Indigenous Expenditure Report?

The disparity between outcomes for Indigenous and non-Indigenous Australians has been an ongoing concern for governments at all levels, Indigenous Australians and many members of the general community. Yet there has been limited information for assessing the adequacy, effectiveness and efficiency of expenditure on programs aimed at improving outcomes for Indigenous Australians. The Indigenous Expenditure Report contributes to the evidence base available to interested parties (including Indigenous Australians), by providing information on the levels and patterns of government expenditure on services provided to Indigenous Australians.

The Report provides estimates for 86 expenditure categories, mapped to six broad service areas — early child development, and education and training; healthy lives; economic participation; home environment; safe and supportive communities; and other government services — that align, at a high level, to the Closing the Gap building blocks.

For more information, refer to chapter 1 of the Report.

How will the Indigenous Expenditure Report make a difference to Indigenous Australians?

The Report is not expected to affect outcomes for Indigenous Australians directly — rather, it provides an additional tool to assist policy makers to shape government policy, and to allow other interested parties to hold governments to account.

The Report provides estimates of government expenditure across key outcome areas such as: education; justice; health; housing, community services; employment; and other government services. Information about the levels and patterns of government expenditure on services related to Indigenous Australians can help those developing and assessing policies to Close the Gap in Indigenous disadvantage.

For more information, refer to chapter 1 of the Report.

How does the Report estimate Indigenous expenditure?

Government services related to Indigenous Australians are provided through a combination of Indigenous specific (targeted) and mainstream (available to all Australians) services. While expenditure on Indigenous specific services can generally be assumed to relate exclusively to Indigenous Australians, the proportion of expenditure on mainstream services that relates to Indigenous Australians is often not recorded systematically, and has been estimated for the purpose of the Report.

The Indigenous Expenditure Report approach to estimating expenditure on services related to Indigenous Australians involves two stages:

  • identification of total expenditure by service area and, where applicable, total expenditure for Indigenous specific programs and services
  • proration (or allocation) of mainstream (that is, non‑Indigenous specific) expenditure between Indigenous and non‑Indigenous Australians. To allocate mainstream expenditure, the Report uses measures of service use that are closely related to service cost drivers (for example, the number of students enrolled in secondary schools).

The 2012 Indigenous Expenditure Report is the second in a series. The estimation method used in this report builds on the work undertaken for the 2010 Report, with a number of major improvements. These improvements mean that the estimates in the 2012 Report are not comparable to the estimates in the 2010 Report.

The Report represents the best collective effort of the jurisdictions. However, estimating Indigenous expenditure is complex, and many data quality and methodological challenges are yet to be resolved. Interpreting the estimates requires an understanding of the strengths and limitations of the method and data (chapter 2), and the context within which Indigenous services are provided (chapter 3).

For more information, refer to chapter 2, and the Expenditure Data Manual and Service Use Measure Definitions Manual, available from the project website:

What does the Report tell us about government expenditure on Indigenous Australians?

The 2012 Indigenous Expenditure Report estimates that:

  • total direct Indigenous expenditure in 2010-11 amounted to $25.4 billion, accounting for 5.6 per cent of total direct government expenditure. Indigenous Australians make up 2.6 per cent of the population

–    the Australian Government accounted for $11.5 billion (45 per cent) of Indigenous direct expenditure, with the remaining $13.9 billion (55 per cent) provided by State and Territory governments

–    mainstream services accounted for $19.9 billion (78 per cent) of Indigenous direct expenditure, with the remaining $5.5 billion (22 per cent) provided through Indigenous specific (targeted) services

  • estimated expenditure per head of population was $44 128 for Indigenous Australians, compared with $19 589 for non-Indigenous Australians in 2010-11, (a ratio of 2.25:1). The $24 538 per person difference reflected the combined effects of:

–    greater intensity of service use ($16 109 or 66 per cent) — Indigenous Australians use more services per capita because of greater need, and because of characteristics such as the younger age profile of the Indigenous population

–    additional costs of providing services ($8429 or 34 per cent) — it can cost more to provide services to Indigenous Australians if mainstream services are more expensive to provide (for example, because of location), or if Indigenous Australians receive targeted services in addition to mainstream services (for example liaison officers in hospitals).

The printed report provides estimates of expenditure on six broad categories of services that relate to the COAG building blocks. At a national level, in 2010‑11:

  • early child development, and education and training — an estimated $2.44 was spent per Indigenous Australian for every dollar spent per non‑Indigenous Australian
  • healthy lives — an estimated $2.02 was spent per Indigenous Australian for every dollar spent per non‑Indigenous Australian
  • economic participation — an estimated $1.96 was spent per Indigenous Australian for every dollar spent per non‑Indigenous Australian
  • home environment — an estimated $2.16 was spent per Indigenous Australian for every dollar spent per non‑Indigenous Australian
  • safe and supportive communities — an estimated $4.50 was spent per Indigenous Australian for every dollar spent per non‑Indigenous Australian
  • other government expenditure — an estimated $1.19 was spent per Indigenous Australian for every dollar spent per non‑Indigenous Australian.

More detailed estimates for 86 expenditure categories by level of government are available electronically from the project website.

For more information, refer to the Report Overview, and each building block chapter.

Why can it cost more to provide services to Indigenous Australians?

On average, direct expenditure per head of population for Indigenous Australians ($44 128) was $24 538 higher than direct expenditure per head of population for non‑Indigenous Australians ($19 589). Around $8429 (34 per cent) of this difference was due to additional costs of providing services. These additional costs have two components:

  • mainstream service cost differentials — any additional cost of providing mainstream services to Indigenous Australians, for reasons such as location, culture and language. For social security payments, mainstream service cost differentials reflect differences in the average payment to Indigenous and non-Indigenous recipients when assessed against eligibility criteria
  • Indigenous specific services that complement mainstream services — services that Indigenous Australians use in addition to a mainstream service; for example, Indigenous student counsellors in schools.

For more information, refer to chapters 2 and 3 of the Report.

Why do Indigenous Australians use some services more intensively?

On average, direct expenditure per head of population for Indigenous Australians ($44 128) was $24 538 higher than direct expenditure per head of population for non‑Indigenous Australians ($19 589). Around $16 109 (66 per cent) of this difference was due to greater intensity of service use. Intensity of service use has two components:

  • Indigenous use of mainstream services — the estimated Indigenous share of mainstream expenditure is proportional to Indigenous use of mainstream services.

The per capita intensity of service use is higher if, on average, Indigenous Australians tend to use more services than non-Indigenous Australians — either because of greater individual need, or because a higher proportion of the Indigenous population belongs to the age group likely to use those services

  • Indigenous specific services that substitute for mainstream services — these are services that Indigenous Australians use instead of a similar mainstream service.

For more information, refer to chapters 2 and 3 of the Report.

How reliable are the estimates?

The Report represents the best collective effort of the jurisdictions. However, users of the estimates should be aware of the following potential issues:

  • report scope — the Report includes estimates of Australian Government, and State and Territory government expenditure, including payments to local governments. However, it does not include expenditure by local governments
  • assumptions underpinning the model — the Report method involves a number of assumptions, which affect how estimates should be interpreted
  • data quality — the Report draws on the best available data from many sources. However, in some cases, required data were not available, or were of relatively poor quality.

The Steering Committee uses the following methods to explain and improve the estimates:

  • data quality statements — any potential sources of uncertainty in data are highlighted by providing data quality statements for all major data sources, using the Australian Bureau of Statistics data quality framework
  • subjective assessment of the reliability of model estimates — the Steering Committee has undertaken a subjective assessment of the reliability of the major parameters  underpinning the estimates in the report. These are presented in appendix B of the report.
  • continual improvement — the Steering Committee will continue to work with governments and data agencies to improve the quality of the estimates over time.

For more information, refer to chapter 2 and appendix B of the Report, and the Service Use Measure Definitions Manual, which are available from the project website:

Why is it difficult to compare expenditure across jurisdictions?

Although the Indigenous Expenditure Report provides estimates for all jurisdictions, several factors influence the comparability of the estimates. These include:

  • jurisdictions’ inconsistent identification of Indigenous specific services
  • jurisdictions’ inconsistent allocation of expenditure to the agreed framework of expenditure categories
  • the organisation of services within jurisdictions (that is, whether services are provided by general government, by government owned businesses, or by the private sector). The scope of the Report is limited to general government expenditure, so different approaches to service delivery can lead to significant variations in estimated expenditure.

The Expenditure Data Manual provides guidelines for recording expenditure against a nationally consistent framework. These guidelines are refined with each report which will contribute to an improvement in the comparability of expenditure between jurisdictions over time. Each jurisdiction has also provided comments to aid interpretation, which are presented in chapter three of the Report.

For more information, refer to chapter 3 of the Report.

How is the Indigenous Expenditure Report different from other Indigenous-focused reports, such as the Overcoming Indigenous Disadvantage report?

The Indigenous Expenditure Report is designed to complement other reporting initiatives and to contribute information that is not otherwise available. The Indigenous Expenditure Report provides estimates of government expenditure on services related to Indigenous Australians across key outcome areas such as: education; health; housing; employment; community services; justice; and other government services, mapped at a high level to the Overcoming Indigenous Disadvantage strategic areas for action. The Overcoming Indigenous Disadvantage report provides information about the disparities in outcomes for Indigenous Australians. In combination, the information from both reports will allow high level comparisons of changes in expenditure levels and changes in key outcomes. This will provide a basis for richer assessment of policies designed to Close the Gap in Indigenous disadvantage.

For more information, refer to chapter 2 of the Report, and the Expenditure Data Manual and Service Use Measure Definitions Manual, which are available from the project website:

Why are estimates different to those published in other expenditure reports?

The Indigenous Expenditure Report allocates government expenditure using the Australian Bureau of Statistics’ (ABS) Government Purpose Classification framework. The expenditure in this report is therefore conceptually reconcilable to the ABS Government Finance Statistics publications. Data are also consistent with the whole of government expenditure data reported in budget papers and financial reports. However the Indigenous Expenditure Report presents separate estimates for:

  • direct expenditure — expenditure on services and programs that are paid directly to individuals, non-government service providers, or local governments. For example, unemployment benefits that are paid by the Australian Government directly to eligible recipients, or expenditure on school education services by State and Territory governments
  • indirect expenditure — payments or transfers made between jurisdictions, or between different levels of government. Indirect expenditure includes Australian Government general revenue assistance to State and Territory governments (such as Goods and Services Tax (GST) payments), which they then allocate to different areas. A large proportion of Australian Government expenditure is indirect
  • total expenditure — direct plus indirect expenditure, which reconciles to jurisdictions’ budget papers and financial reports.

The printed report summarises one sub-set of the available estimates — direct expenditure — for 2010-11. These are considered robust estimates of the amounts directly spent by the Australian Government, and State and Territory governments on services in 2010-11. More detailed information, including additional expenditure categories, estimates for 2008-09 and estimates for Australian Government total (direct plus indirect) expenditure are available from the project website.

For more information, refer to chapter 2 of the Report.

What needs to be considered when comparing expenditure over time?

The project website provides estimates for 2008-09 and 2010-11. These two periods are not intended to represent particular benchmarks against which future expenditure should be compared. Caution should be exercised when interpreting differences between any two points in time because government expenditure, particularly for more disaggregated expenditure categories, can change over time for a number of reasons, including:

  • increase in demand for government services — generally, increases in the level of demand for particular services will increase expenditure, particularly where expenditure based on meeting eligibility criteria is uncapped (for example, expenditure on unemployment benefits or Medicare)
  • the effects of inflation — to determine actual movement in expenditure, the effect of inflation needs to be removed. However, it is difficult to distinguish changes in price from changes in the level of services government provide, particularly at an aggregated level. This report does not remove the effect of inflation from time series data, and caution should be taken when comparing data over time
  • new policies and changes to existing entitlements — changes in government policies over time can cause significant movements in expenditure. Significant ‘one-off’ global financial crisis stimulus expenditures influenced the 2008-09 estimates. On the other hand, expenditure on many Closing the Gap initiatives did not commence until after 2008-09
  • changes to the allocation of expenditure — the Expenditure Data Manual provides guidelines for allocating outlays to the appropriate expenditure categories. However, changes in the machinery of government, information systems and accounting policies can result in different allocations of expenditure over time (particularly detailed levels of disaggregation).

Future Indigenous Expenditure Reports are expected to provide more robust information about trends in expenditure over time, as more years of data become available and the quality of data improves.

For more information, refer to chapter 2 of the Report.