Courtesy of the Central Intelligence Agency

Courtesy of the Central Intelligence Agency

CHAPTER 26 Australia Gary E. Day and Bernard J. Kerr Jr.

▶ Country Description TABLE 26-1 Australia Nationality Noun: Australian(s)

Adjective: Australian

Ethnic groups

English 25.9%, Australian 25.4%, Irish 7.5%, Scottish 6.4%, Italian 3.3%, German 3.2%, Chinese 3.1%, Indian 1.4%, Greek 1.4%, Dutch 1.2%, other 15.8% (includes Australian aboriginal.5%), unspecified 5.4%

Religions Protestant 30.1% (Anglican 17.1%, Uniting Church 5.0%, Presbyterian and Reformed 2.8%, Baptist, 1.6%, Lutheran 1.2%, Pentecostal 1.1%, other Protestant 1.3%), Catholic 25.3% (Roman Catholic 25.1%, other Catholic 0.2%), other Christian 2.9%, Orthodox 2.8%, Buddhist 2.5%, Muslim 2.2%, Hindu 1.3%, other 1.3%, none 22.3%, unspecified 9.3% (2011 est.)

Language English 76.8%, Mandarin 1.6%, Italian 1.4%, Arabic 1.3%, Greek 1.2%, Cantonese 1.2%, Vietnamese 1.1%, other 10.4%, unspecified 5% (2011 est.)

Literacy# Below Level 1: 3.7%



Level 1: 10% Level 2: 30% Level 3: 38% Level 4: 14% Level 5: 1.2%

Government type

Federal parliamentary democracy

Date of independence

January 1, 1901 (federation of UK colonies)

Gross Domestic Product (GDP) per capita

$65,400 (2015 est.)

Unemployment rate

6.2% (2015 est.)

Natural hazards

Cyclones along the coast; severe droughts; forest fires

Environment: current issues

Soil erosion from overgrazing, industrial development, urbanization, and poor farming practices; soil salinity rising because of the use of poor-quality water; desertification; clearing for agricultural purposes threatens the natural habitat of many unique animal and plant species; the Great Barrier Reef off the northeast coast, the largest coral reef in the world, is threatened by increased shipping and its popularity as a tourist site; limited natural freshwater resources

Population 23, 940,333 (Dec. 2015 est.)

Age structure

0-14 years: 17.9% (male 2,089,561/female 1,982,719) 15-24 years: 13.14% (male 1,533,526/female 1,455,870) 25-54 years: 41.67% (male 4,822,083/female 4,658,371) 55-64 years: 11.82% (male 1,333,924/female 1,355,347) 65 years and over: 15.47% (male 1,628,108/female 1,891,505) (2015 est.)

Median age Total: 38.4 years Male: 37.7 years Female: 39.2 years (2015 est.)

Population growth rate

1.07% (2015 est.)

Birth rate 12.15 births/1,000 population (2015 est.)

Death rate 7.14 deaths/1,000 population (2015 est.)

Net migration rate

5.65 migrant(s)/1,000 population (2015 est.)

Sex ratio At birth: 1.06 male(s)/female 0-14 years: 1.05 male(s)/female 15-24 years: 1.05 male(s)/female 25-54 years: 1.04 male(s)/female 55-64 years: 0.98 male(s)/female 65 years and over: 0.86 male(s)/female Total population: 1.01 male(s)/female (2015 est.)

Infant mortality rate

Total: 4.37 deaths/1,000 live births Male: 4.67 deaths/1,000 live births Female: 4.04 deaths/1,000 live births (2015 est.)

Life expectancy at birth

total population: 82.15 years male: 79.7 years female: 84.74 years (2015 est.)

Total fertility rate

1.77 children born/woman (2015 est.)



HIV/AIDS adult prevalence rate

0.17% (2015 est.)

Number of people living with HIV/AIDS

28,200 (2013 est.)

HIV/AIDS deaths

Less than 100 (2013 est.)

Data from Central Intelligence Agency. The World Fact Book, 2016: Australia. factbook/geos/as.html. Accessed December 4, 2016; Australian Bureau of Statistics. Programme for the International Assessment of Adult Competencies, Australia, 2011–2012. Catalogue No. 4228.0. September 10, 2013. Accessed 2016.

History Australia is a vast, ancient island continent. It was first settled more than 50,000 years ago by migrating tribes making the short trip across from Southeast Asia to the northern parts of the continent. These Aboriginal and Torres Strait Islander peoples spread across the land, including the island of Tasmania to the south, and are thought to have numbered around 350,000 at the time of first European contact in the 17th century.1

After a period of exploration by Dutch, French, and English explorers, the eastern parts of Australia were claimed in 1770 by Captain James Cook in the name of Great Britain. Initial settlement quickly followed. The first fleet of 11 ships carrying 700 convicts and 400 guards and officials arrived in January 1788 to establish the penal colony of New South Wales. Five more self-governing British crown colonies were then established during the early part of the 19th century. On January 1, 1901, after a countrywide referendum, the six colonies federated, and the Commonwealth of Australia was formed.

Australia’s history since British settlement in 1788 has been marked by several important events. The discovery of gold in the early 1850s brought many immigrants to Australia from Britain, Ireland, Europe, North America, and China. This and subsequent gold discoveries heralded a period of considerable prosperity, population growth, and spread. Involvement in two world wars and in other major conflicts of the 20th century, notably Korea and Vietnam, while creating a large loss of life (mainly young men) and a strain on national resources, helped create a sense of national unity and identity.

Colonization, however, severely disrupted Aboriginal society and economy—epidemic disease caused an immediate loss of life, and the occupation of land by settlers and the restriction of Aboriginal and Torres Strait Islanders to reserves disrupted their ability to support themselves. Over time, this combination of factors had such an impact that by the 1930s only an estimated 80,000 of this population remained in Australia.1

A massive program of European immigration after World War II—some 2 million people arriving between 1948 and 1975—saw Australia’s population grow substantially, helping to fuel a lengthy period of economic prosperity and growth. Discovery and exploitation of the country’s natural and mineral resources have underpinned Australia’s development and wealth and encouraged rapid development of agricultural, mining, and manufacturing industries up until 2009.

Most recently, a downturn in global commodities has seen sharp falls in the export earnings from Australia’s natural resources, putting pressure on revenues that underpin the national economy. Similarly, Australia is at a nexus in terms of large scale manufacturing due to the relatively small size of the Australian market and cost of local salaries and wages compared to less expensive imports. With large-



scale industries, such as motor vehicle manufacturing, ceasing in 2017, Australia is looking to redefine its economy with new markets and approaches to manufacturing and exports.

Size and Geography Australia has a land area of some 7.7 million square kilometers. This is about twice the size of the European Union and is close to the size of the United States (excluding Alaska). Situated in the southern hemisphere between the Indian and Pacific oceans, a large proportion of the continent (around 40%) lies within the tropics (see map in FIGURE 26-1). Distances are huge, some 4,000 kilometers from west (Steep Point in Western Australia) to east (Byron Bay in New South Wales) and 3,680 kilometers from north (Cape York in Queensland) to south (Wilson’s Promontory in Victoria).

FIGURE 26-1 Map of Australia

© Bardocz Peter/Shutterstock

Beyond its continental shores, Australia also has jurisdiction over a large number of islands, most notably the island of Tasmania, but also many others such as Melville Island (off the Northern Territory), Kangaroo Island (South Australia), King and Flinders Islands (Tasmania), the Torres Strait Islands (Queensland), and more distant islands including Macquarie Island (well south of Tasmania), Christmas



Island (off Western Australia, and Lord Howe Island (off New South Wales).

Government and Political System Since achieving nationhood in 1901, Australia has had a federal system of government whereby power is divided among the Commonwealth Government and the governments in each of Australia’s six states and two territories. The form of government reflects the country’s British heritage, a constitutional monarchy with the British sovereign as head of state (currently Queen Elizabeth II). The monarch is represented federally by the governor-general and at state levels by state governors.

Separation of powers—legislative, executive, and judicial—is embedded in the system of government. This is well described by Healy et al.2

The Parliament makes the laws, the Government implements and supervises, and the Courts interpret them. The legislative power of the Commonwealth is vested in a Federal Parliament. The executive power is vested in the Queen and is exercisable by the Governor-General as the Queen’s representative. Judicial power is exercised by the High Court of Australia and the Federal Court of Australia, and other state courts exercising federal jurisdiction.

Healy et al.2

The Commonwealth Parliament, located in the nation’s capital, Canberra (in the Australian Capital Territory), is bicameral. Elections for the two chambers, the House of Representatives (the lower house) and the Senate (the upper house), take place every three years. Electorates in the 150-seat lower house are allocated by population size, and members are elected for 3 years with a preferential voting system. Senators in the upper house are allocated equally across the states. Each state is represented by 12 senators and each territory by 2, elected for 6 years by proportional representation. Through a system of rotation, half of the Senate retires every 3 years and is replaced (or reelected) at the time of a general election for House of Representatives members.3

The political party that wins the majority of seats in the lower house is empowered to form a government. Since 1944, when the Liberal Party was formed by Robert Menzies, successive Commonwealth Governments have been formed by the Australian Labor Party and by a coalition of the Liberal and National parties. Over the last nine years there has been a succession of prime ministers and changes of government from Coalition to Labor and now back to Coalition. Over this time Australia has seen six changes of prime minister (1996–2007 John Howard, 2007–2010 Kevin Rudd, 2010–2013 Julia Gillard, 2013 Kevin Rudd, 2013–2015 Tony Abbott, and since 2015 Malcolm Turnbull). While the current federal government is led by the Coalition (Liberal and National Parties), there is a mix of Labor Party and Coalition governments across the seven states and territories. Another interesting and unusual feature of Australia’s system of government is that voting is compulsory for all enrolled citizens aged 18 years and over, in each state and territory and at the federal level.

Macroeconomics During the 1990s and early 2000s, Australia’s economy performed particularly well, boasting one of the Organisation for Economic Co-operation and Development’s (OECD) fastest growing economies during that period. Significant reforms since the 1980s, including financial deregulation, floating the exchange rate, free trade agreements, stronger trade ties with Asia, lowering of tariffs, and changes to the tax system, have helped to produce a diversified and internationally competitive economy with per capita gross domestic product (GDP) (A$50,026/US $37,828 in 2016) on par with several major European economies, such as the United Kingdom, Germany, and Canada.

An abundance of natural resources has enabled Australia to become a major exporter of agricultural products, minerals, metals, and fossil fuels. Much of Australia’s economic focus has been on the economies of the Asia-Pacific region. The boom in mining exports in recent years, driven largely by



China’s rapid growth, has now slowed substantially, placing pressure on natural resource revenues and national balance of payment emergence as an economic force in the world economy.

A short summary of Australia’s most recent economic statistics reveals that (1) inflation has remained steady at 1.30% per year through June 2016, (2) unemployment has been climbing slowly in line with slowing economic growth (5.70% in June 2016), (3) the exchange rate has been around A$0.74 to US $1, and (4) cash rates have been at a historically low level of 1.75%. The Reserve Bank of Australia has tightened monetary policy by reducing interest rates in an attempt to stimulate the domestic economy.4 As to the future, the Australian economy is entering a phase of significant international uncertainty. The global economy, and in particular the Asian economies that Australia trades with, is slowing, and this is substantially affecting all Australians with borrowings. In addition, rising unemployment, nationwide droughts affecting agricultural production, falling commodity prices, and major shifts in large-scale local manufacturing are all creating economic issues for the national government. As a result, Australia’s strong economic footing will be at risk. Australia’s economic growth has slowed considerably over the last eight years, and with the government carrying larger burdens of national debt, there will be pressure on our national credit ratings.

Demographics Australia’s population was close to 24.0 million in December 2015,5 a 1.0% increase over the previous year. Around half of this increase is due to natural increase (births less deaths) and half to net overseas migration. Since federation in 1901,6 the population has increased by just over 20.0 million people; in the decade from 2006 to 2016, the population increased by around 2.4 million.5,7

The majority of Australians are of European descent, a reflection of early settlement from the British Isles during the colonial era and to post-federation immigration from Europe. More recently, an increasing number of immigrants to Australia are from Asia and Oceania. Australia has one of the largest proportions of immigrant populations in the world. More than 23% of Australians were born overseas.5

The mainland Aboriginal and Torres Strait Islander population was 669,900 (3.0% of the total population) in 2011.8 In 2001 this population was estimated at 534,770. Over the decade to 2011 there has been an annual growth rate in population of between 2.0% and 2.3% per year.8

Australia’s population is highly urbanized with two-thirds living in major cities around the coastal fringe. The state capitals are all coastal: Sydney, Melbourne, Brisbane, Adelaide, Perth, and Hobart. The exception is the nation’s capital, Canberra, which is inland from Sydney but still within 100 kilometers from the coast.

Although Australia has no official state religion, the 2011 census provides a snapshot of the religious beliefs of the population. Results show that 61.0% of Australians called themselves Christian, of which 25.0% identified themselves as Roman Catholic and 17.0% as Anglican. Followers of non-Christian religions numbered 7.2% (Buddhism, Islam, Hinduism) and 22.0% were categorized as having “no religion” (which includes nontheistic beliefs, such as humanism, atheism, agnosticism, and rationalism).9

▶ Brief History of the Healthcare System

Pre–World War II A range of influences have shaped the complex system of health care now in place in Australia. From



early beginnings as a convict settlement in the colony of New South Wales in 1788, health services in Australia have evolved into a mix of public and private delivery, based largely on British and American models and shaped inevitably by unique political, economic, and social events.

The first 100 or so years of European settlement were characterized by a somewhat haphazard mix of private medical services and government-funded hospitals for convicts, paupers, and the impoverished. Support for health costs was also forthcoming from a range of benevolent and charitable organizations and friendly societies. During the 19th century, colonial governments across the country also assumed responsibility for the maintenance of public health, such as sanitation and the control of infectious diseases, through the passage of comprehensive public health acts modeled on British legislation of the time.10

The coming of nationhood in 1901 brought with it a federal system of government under which responsibility for the provision of health services was shared among the Commonwealth Government and the governments of the six states and two territories.

Since World War II Initially, the Commonwealth’s health responsibilities were restricted to quarantine matters only, but an amendment to the Constitution in 1946 enabled the Commonwealth to make laws with respect to (among other things) “pharmaceutical, sickness and hospital benefits, medical and dental services, but not so as to authorize any form of civil conscription.” This latter clause was inserted into the amendment following pressure from the medical profession, a response no doubt to the perceived threat of a British-style National Health Service being introduced in Australia.

Prohibition of civil conscription, interpreted to mean that medical practitioners could not be compelled to work for the government, not only helped to entrench the predominant fee-for-service payment system for medical services but also played a part in delaying the introduction of the Commonwealth-funded prescription insurance system under which all Australians have access to subsidized life-saving medicines. As a result, the Pharmaceutical Benefits Scheme (PBS), as it is known, first mooted in 1945, was not fully implemented until the Pharmaceutical Benefits Act passed through Federal Parliament in 1948. Passage of this act had not been easy. It was passed twice and overturned once; it was the subject of a national referendum, constitutional change, and fierce public debate on the powers of the Commonwealth Government.

The 1946 constitutional amendment also enabled the Commonwealth Government to enter into funding agreements with the states for the provision of free public hospital care for patients in public wards. This arrangement, intended to protect patients from the high cost of hospital care, has remained the basis of hospital financing agreements between the Commonwealth and the states ever since.

The other main features of the health system (given effect through the 1953 National Health Act) were the pensioner medical services arrangements and the medical benefits scheme. The former ensured the provision of free health services to aged and invalid pensioners through agreements with the Australian Medical Association, whereas the latter subsidized medical costs for members of nonprofit health insurance schemes.

These four pillars of Australia’s health system—(1) subsidized medicines, (2) Commonwealth funding for state hospitals, (3) subsidized health care for pensioners, and (4) subsidized private health insurance— remained in place largely unaltered for the next 20 years, until the introduction of a national health insurance scheme known as Medibank in 1975. Not surprisingly, the move from a system funded predominantly through subsidized private insurance to one funded predominantly by government was met with strident opposition from vested interests and political opponents alike. After rejection of the necessary legislation by the opposition-controlled Senate in 1973 and 1974, dissolution of both houses of



Parliament and a subsequent general election, Medibank was finally enacted in July 1974 and came into operation a year later. The major elements of the new scheme were subsidized medical services for patients and free access to public hospital care through hospital cost-sharing arrangements among the Commonwealth and the state and territory governments.

From 1975, a period of conservative government ensued (the Fraser-led Liberal-National Coalition), during which several changes were made to Medibank, which saw a gradual return to greater reliance on private health insurance for medical services.10 Election of a Labor Party government in 1983 then heralded the return of a universal tax-funded national health insurance scheme known as Medicare. The subsequent change of government in 1996 did not materially affect these arrangements, which now enjoy bipartisan political support and widespread public support.

▶ Description of the Current Healthcare System The Australian healthcare system is complex with numerous providers of services, funding arrangements, and regulatory mechanisms. The overall aim of the system is to provide all Australians with ready access to healthcare services at low cost or no cost at all. Service providers include medical practitioners (physicians), various health professionals, private and public hospitals, and government and nongovernment agencies. Responsibility for funding is shared among all levels of government and the nongovernment sector, such as private health insurers and individual consumers.

The Commonwealth Government is responsible for funding the provision of medical services, pharmaceutical benefits, aged residential care services, and disability services, as well as public health, research, and national information management. The state and territory governments are responsible for delivery and management of a range of health services, such as public hospital services, mental health programs, community support programs, and women’s and children’s services.

Facilities Medicare is the centerpiece of Australia’s health system. It is a universal, publicly funded health insurance system that allows all Australians to access affordable high-quality health care. In place in its present form since 1984, Medicare is financed by general taxation revenue and a Medicare levy based on taxable income. Medicare provides free or subsidized treatment by medical practitioners (physicians) and grants to the states and territories to assist with the cost of running public hospitals. The Commonwealth jointly funds public hospitals with the states so that these services are provided free of charge to patients. In 2011–2012, there were 1,345 acute care hospitals throughout Australia, of which 753 were public hospitals containing a total of 56,582 beds.11 In that same year, there were 592 private hospitals in Australia (TABLE 26-2), with a total of 24,362 beds.11 There were also a small number of public psychiatric hospitals containing a total of 1,705 beds.

TABLE 26-2 Australia’s Hospitals and Available Beds, 2011–2012 Public acute Public psychiatric Private hospitals Total

Hospitals 753 17 592 1,362

Available beds 56,582 1,838 24,362 82,782

Available beds per 1,000 population 2.6 0.1 1.3 4.0

Data from Australian Institute of Health and Welfare. Australia’s Health 2014. Canberra; 2014.



Workforce In common with many other countries around the world, Australia is experiencing significant shortages of health professionals across the spectrum of occupations. This is despite significant growth in the overall health workforce in recent years. Between 2006 and 2011, the total number of people employed in health occupations grew by 22.1% from 956,150 to 1,167,633.11 TABLE 26-3 shows total numbers employed in selected health occupations, as well as rates per 100,000 population. Australia has a similar number of practicing medical practitioners per capita as the OECD average and a higher per capita number of practicing nurses.11

TABLE 26-3 Australia’s Health Workforce, Selected Occupation, 2012 Occupation Number Per 100,000 population

Nurses and midwives 290,144 1,124

Medical practitioners 79,653 374

Pharmacists 21,331 89

Physiotherapists 20,081 80

Dental practitioners 17,283 74

Occupational therapists 7,231 45

Data from Australian Institute of Health and Welfare. Australia’s Health 2014. Canberra; 2014.

Health workforce shortages will continue into the future due in part to an aging population and lower numbers coming into the health workforce due to falling fertility rates in the 1980s and 1990s. For comparison, the two largest components making up the health workforce are nurses and midwives and doctors; almost two out of five nurses and midwives are 50 years or older, with one in four medical practitioners being 55 or older.12

Technology and Equipment Australia’s fortunate status as a wealthy developed nation has enabled it to build and foster a health system with access to advanced, up-to-date medical and surgical technologies and health facilities. Although direct measures of the stock and spread of these technologies and equipment are not available, it is possible to identify particular technologies—new pharmaceutical listings for example—and to measure their impact on health costs and (in some instances) health outcomes.

The scale of the medical technology industry in Australia is immense, with an annual turnover of approximately A$10.0 billion (US $7.6 billion) in 2012, imported goods to the value of A$4.4 billion (US $3.3 billion), and exported goods worth A$1.9 billion (US $1.4 billion).13 From these figures alone, regulation and monitoring has been necessary to keep health expenditure in check and to ensure that only the most effective and efficient technologies are approved for use. An earlier study by the Productivity Commission (a Commonwealth Government agency) into the impacts of advances in medical technology in Australia14 concluded that (1) advances in medical technology in Australia have brought large benefits but have also been a major driver of increased health spending in recent years and that (2) overall, advances in medical technology arguably have provided value for money, particularly as people highly value improvements in the quality and length of life.

The predominance of public funding in Australia’s health system brings with it various rationing and gate- keeping mechanisms aimed at controlling the cost impact of new technologies. The underlying philosophy of these mechanisms is for evidence-based health care. New drugs and medical procedures, for example, must be assessed as cost-effective before they can be subsidized for listing on the PBS or the Medicare



Benefits Schedule. Indeed, Australia was the first country in the world to require drug manufacturers seeking to have a new drug listed on the PBS to demonstrate its cost-effectiveness.

Another feature of Australia’s system is the drive to increase the diffusion and use of information technology at all levels of health care. There is high-level commitment from all levels of government to encourage the uptake of information technology to improve clinical and medical practice. Most physician practices are computerized both for clinical and administrative purposes, and the introduction of a national electronic medical record is currently being implemented, albeit with a slow uptake. This is mainly due to an opt-in system for patients. This national electronic medical record is intended to reduce errors, adverse events, and duplication of services, reduces the incidence of inappropriate treatments, and allows for access across Australia. There remains considerable scope for progress in this area, which to date has been delayed by understandable concerns about patient privacy, confidentiality and cost.

▶ Evaluation of the Healthcare System Over the last decade there has been an awareness of and emphasis on health system performance in Australia. An indication of this was the establishment in 2011 of the National Health Performance Authority (NHPA). The NHPA was responsible for monitoring, reporting, and benchmarking hospital performance and a range of other health performance measures, including national reporting on MyHospital and MyHealthyCommunities. In 2016, the NHPA ceased operations, and its role and functions were taken up by the Australian Institute of Health and Welfare and the Australian Commission on Safety and Quality in Health Care.15 The performance criteria cover a wide range of indicators, including equity, effectiveness, appropriateness, efficiency, responsiveness, accessibility, safety, continuity, capability, and sustainability. Also high on the list in any evaluation of health system performance are measures of health status and health outcomes.

Cost Health spending in Australia totaled nearly A$155 billion (US $117 billion) in 2013–2014 or A$6,639 (US $5025) per person.16 This represents 9.7% of Australia’s GDP, which puts Australia around the average in comparison with other OECD countries, including Norway, Finland, and Greece; below countries, such as the United States, Canada, Japan, and New Zealand; and above the United Kingdom. TABLE 26-4 shows how spending on health services in Australia has progressed in the past decade.

TABLE 26-4 Trends in Health Spending in Australia, 2003–2014 2003–2004 2008–2009 2013–2014

Total health expenditure, current prices (A$ million) (US$ million)

94,932 38,864

125,705 55,029

154,633 82,633

Total health expenditure as a percentage of GDP 8.53 9.09 9.78

Total per capita health expenditure, current prices (A$) (US$)

3,708 2,026

5,328 2,854

6,639 3,990

Public share of total health expenditure (%) 67.3 68.8 67.8

Data from Australian Institute of Health and Welfare. Health Expenditure Australia 2013–2014. Canberra; 2015.

In the ten years from 2003–2004 to 2013–2014, total health expenditure tended to grow faster in real terms than GDP, with an average annual real growth of 5.0% being 2.2 percentage points higher than the 2.8% for GDP. In 2013–2014, growth in real health expenditure was just 0.6 of a percentage point higher



than GDP (3.1% compared with 2.5%, respectively). In the previous year, real health expenditure growth was 1.4 percentage points lower than GDP growth (1.1% compared with 2.5%).16(p8)

Funding and responsibility for Australia’s health system is a complex blend of purchasers and providers and is funded predominantly from taxation sources with federal, state, and territory governments, contributing close to 70% of all health spending (see FIGURE 26-2).

FIGURE 26-2 Health Services—Funding and Responsibility, 2014

Reproduced from Australian Institute of Health and Welfare. Australia’s Health 2014. Canberra; 2014. health/2014/health-system/#t2. Creative Commons license available at

Nongovernment funding is drawn mainly from out-of-pocket payment by individuals and health insurance funds, which help to cover the cost of treatment in private hospitals and a range of other medical and ancillary health services.



Funding from governments, individuals, private insurance, and other sources remained relatively proportional until 2006 (see FIGURE 26-3), when the Australian government started to bear a larger percentage of overall funding. In recent times, funding for health has become an area for strong debate among the Commonwealth and the states and territories. There has been strong disagreement about the adequacy of health funding from the Commonwealth, particularly in a time where the economy is shrinking and the population is ageing. Attempts to curb the growth in health funding in recent years have been largely unsuccessful.

FIGURE 26-3 Source of Funds for Health, 2001–2002 to 2011–2012

Reproduced from Australian Institute of Health and Welfare. Australia’s Health 2014. Canberra; 2014. health/2014/health-system/#t2. Creative Commons license available at

The public share of health spending has varied markedly over the years, reflecting the major policy changes of the federal government. The introduction of Medibank in 1975 saw the public share jump from 57.0% to 73.0%; this share then declined to 63.0% in the late 1970s with the gradual dismantling of Medibank by the Fraser Coalition government. The public share of health spending jumped to 72.0% after the introduction of Medicare by Hawke’s Labor Party government in 1984. In 2013–2014, the public share


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