Commission of Audit Key Recommendations Covered in this section: B1 B2 B3 Government Owned Corporations Governance Model Energy Public Transport C4 Grant Administration D1 D2 D3 D4 D5 D8 D9 D10 D12 D14 D15 Health Overview Public Hospitals Primary and Community Care D3.3 Community health care D3.4 Subsidy Schemes D3.5 Dental Services D3.7 Rural and Remote Health Services Mental Health Residential Aged Care Vocational Education and Training (VET) Disability Services Child Safety Services Corrective Services Housing Services Social Inclusion
Volume 2 Part D B1 Government Owned Corporations (GOC) Governance Model Appoint single shareholding Minister for all GOCs and establish an Office of the Shareholding Minister to support that Minister s objectives. Annual government budget to include full report showing all Community Service Obligations (CSOs) and other non-commercial policy objectives that GOCs are required by government to deliver, including impact on the budget and financial performance of GOCs. Identify CSO or non-commercial policy objectives delivered through GOCs (such as concessional electricity prices) which might be converted to assistance payments paid directly from government budget to target customers. Not accepted The government considers that at this time the two shareholder model strikes the appropriate balance, but will continue to monitor the model to ensure that it is efficient and cost effective. The government agrees with the Commission that income support and social welfare objectives should be delivered directly to intended recipients rather than through GOCs. Direct assistance is more efficient and more targeted to those in need. Income support mechanisms should be paid directly from the budget to target groups to enable better management and closer public scrutiny of costs. B2 Energy When market conditions are favourable, the government divest its electricity generation assets. Factors affecting the timing of this divestment will include impacts of the carbon tax and other carbon abatement measures and generation capacity in the National Electricity Market (NEM). Electricity distribution and transmission assets be divested at a time set to align with regulatory re-set periods and favourable market conditions. For further consideration Not accepted The government will not be divesting its electricity distribution and transmission businesses namely, Ergon, Energex and Powerlink - during its current term of office and will not be seeking a mandate to do so at the next election. The government agrees that the sale of Ergon Retail (EEQ) could provide a return of capital to the state and is willing to explore alternative options for delivering on the UTP (i.e. payment of CSO at network level) which could increase scope for expanding retail competition. Commission of Audit Key Recommendations Page 2 of 13
For government to divest residual retail electricity functions (i.e. Ergon Energy EEQ retail arm) in order to maximise the value of the business for taxpayers (to be divested either separately or in conjunction with the divestment of other assets such as Ergon Energy s distribution arm). To require all government-owned generation, distribution and transmission businesses to achieve higher rates of return through increased efficiencies, better capital management and operational cost savings, and to divest themselves of non-core business where there is a benefit to doing so. To refine the UTP and CSO arrangements over time to target the most needy consumers, reduce costs and volatility, and support wider retail competition in Queensland (for example, by introduction of a tariff band). For further consideration in part The government agrees with the Commission that the UTP is effectively subsidisation of energy by taxpayers and through its current delivery it has adverse consequences of dampening price signals, disincentivising EEQ to reduce costs or operate competitively and lack of ability to expand retail competition. This can result in investment in high cost infrastructure which consumers may not want if they faced the true cost of it which in turn drives up prices for all consumers. The government agrees to consider alternative options to current CSO delivery as proposed by the Commission including: establishing a band of allowable tariffs around the notified price, or specification of pricing zones, to allow limited differentiation on supply costs to different service areas without requiring customers in those zones to face full cost of supply adopting different reference for setting notified prices (i.e. cost of provision in large regional centres rather than SEQ) excluding very large users from the UTP other mechanisms to target subsidies to consumers / areas of greatest need. B3 Public Transport City passenger rail services and network infrastructure be opened up to contestability, like bus services, to allow different providers, including private providers, to bid to operate services and maintain below-rail assets in a particular franchised area under franchise and lease arrangements. Introduce competitive tendering for long distance and tourist passenger rail service contracts, including: evaluating routes serviced, frequencies, franchisees and franchise areas before initiating the tender This is consistent with the government s current direction and will be considered as part of the ongoing reform activities in the Department of Transport and Main Roads. Reform of long distance travel is currently under investigation. Commission of Audit Key Recommendations Page 3 of 13
owning the rolling stock required to provide the services in a State Government entity, and leasing this to the franchisee for the term of the contract. Competitive tendering be introduced for bus service contracts throughout Queensland, including evaluating the number of routes serviced and frequencies, franchisees and franchise areas before initiating the tender. Reform of bus service contracts has been the subject of major investigation in the Department of Transport and Main Roads. C4 Grant Administration The government publish a list of all grant programs on an annual basis. Grant programs across government be rationalised and consolidated, with a view to: reducing the piecemeal and fragmented nature of current programs adopting a consistent definition and treatment of grants across government, separate from subsidies, service level agreements and other forms of payment for services rendered ensuring the efficiency and effectiveness of grant programs in achieving stated objectives providing a more informed basis for future decisions on the nature, range and scope of grants, and the organisations receiving these grants Planning is underway for this to occur progressively as part of the 2013-14 budget process. The Social Services Cabinet Committee has also been established by the government to work on the development of a common policy on grant payments across the whole of government. Notes that action is underway in several large agencies to better define the nature and effectiveness of grant payments. Commission of Audit Key Recommendations Page 4 of 13
achieving better value for money for the large expenditure made on grants. Volume 3 Part D Front Line Service Delivery D1 Health Overview The Queensland Government and Australian Government delineate the specific health functions for which each level of government is responsible, with each government fully meeting its obligations. In relation to services such as primary health care, aged care and certain mental health services, the Queensland Government should: vigorously resist any cost-shifting from the Australian Government to the state seek reimbursement for the cost of delivering services that are the responsibility of the Australian Government. The government is currently working with the Australian Government on a bilateral plan for primary health care ensuring there is a clear delineation of health functions. D2 Public Hospitals The government set a target to improve the efficiency of public hospitals, to meet the National Efficient Price by 2014-15, through the expanded application of case mix (activitybased) funding and through improvements in productivity outlined in the Commissions further recommendations on public hospitals. Commission of Audit Key Recommendations Page 5 of 13
D3 Primary and Community Care In relation to primary health care services, the Queensland Government: work in partnership with the Australian Government to ensure Queensland Health is appropriately reimbursed where it must remain a provider of last resort for primary health care services limit the role of the State as a provider of primary health care services in negotiations with the Australian Government on the development of the National Primary Health Care Strategic Framework and bilateral Primary Health Care Plan. The government has commenced delineation of health functions for which Queensland and the Australian Government are responsible. D3.3 Community health care The government: refocus community health services to reducing demand on public hospitals and expanding hospital substitution programs (such as Hospital in the Home) introduce contestability to the provision of community health services. In the Commission s view, the Queensland Government should concentrate its community health services in those areas which alleviate pressure on public hospitals. These services should involve care models that directly reduce pressure on acute facility-based treatments through avoiding or substituting for a public hospital occasion of service. The government remains fully committed to the free public hospital system in Queensland. Commission of Audit Key Recommendations Page 6 of 13
D3.4 Subsidy Schemes The government review eligibility criteria for subsidy schemes, such as the patient transport subsidy scheme, to align with practice interstate and with the need to focus limited government resources on areas of greatest need. In the 2012-13 State Budget, the Queensland Government announced a doubling of the subsidy rates. This means that Queensland now has subsidy rates substantially higher than New South Wales and Victoria. Queensland s eligibility criteria for the PTSS also are less prescriptive. Priority should be given to those patients with the greatest need. This could involve aligning eligibility criteria with interstate practices, increasing co-payments and/or capping the amount of funding available for these schemes. The government will continue to work to ensure subsidy schemes are efficient and effective. D3.5 Dental Services In relation to public oral health services, the government: align service delivery with best practice interstate, through the introduction of copayments and contestability in service provision leverage reform opportunities presented by the Australian Government s Dental Reform package, while resisting any cost-shifting to the state. The government is currently developing future options for public oral health services within Queensland. Commission of Audit Key Recommendations Page 7 of 13
D3.7 Rural and Remote Health Services To achieve improved efficiency of public hospital services, the government develop opportunities for the non-government sector to provide rural and remote health services for which the state is responsible. The Queensland Health Blueprint outlines directions for rural and remote service delivery, with work continuing on defining rural model of service delivery and implementation. D4 Mental Health To achieve improved efficiency and productivity of mental health services, the government: introduce outcome and output-based funding models for mental health services, through the agreed Independent Hospital Pricing Authority process develop contestable market arrangements for the provision of mental health services, in particular for sub-acute services and community care units. The government strongly influence the development of the mental health activity based funding model being developed by the Independent Hospital Pricing Authority, which will assist in a clearer delineation of responsibilities between the state and federal governments. The government is currently participating in the development of a national model for mental health through the National Mental Health Service Planning Framework. It is anticipated hat this model will support contestable market arrangements and provide a case-mix funding model. D5 Residential Aged Care As provision of residential aged care is the Australian Government s responsibility, the Queensland Government: advocate to ensure an adequate supply of federally-funded aged care places A submission to the Commonwealth Community Affairs Legislation Committee on the aged care reforms will advocate for the adequate supply of residential aged care places in Queensland. The Queensland Government is currently examining options to transfer places to nongovernment providers having regard to local circumstances and capacity. Commission of Audit Key Recommendations Page 8 of 13
negotiate the progressive transfer of ownership and operations of its existing facilities to the non-government sector, with suitable safeguards to ensure continuity of care for residents. D8 Vocational Education and Training (VET) The government reduce duplication between State and Australian Government resource allocation for vocational educational training by focusing State investment on certificate level training, particularly for those individuals without a post-school qualification with priority for those qualifications and pathways that are critical to industry and the economy. This is in line with the outcomes of the Skills Taskforce. D9 Disability Services As recommended by the Productivity Commission, the Queensland Government require the Australian Government to provide full funding of the National Disability Insurance Scheme (NDIS). In the next three years and prior to the full commencement of the National Disability Insurance Scheme, the Queensland Government transition all services currently provided by the Accommodation Support and Respite Services to the non-government sector through a formal and transparent recommissioning process that allows for a progressive movement towards client choice and control. The government has already committed an additional $868 million over five years to support implementation of the NDIS. Government notes that this approach is consistent with its policy position on contestability of service delivery. Commission of Audit Key Recommendations Page 9 of 13
The government continues to support and monitor the development of the non-government sector s governance capability as part of the move to market contestability in specialist disability services. The Department of Communities, Child Safety and Disability Services continues to actively support the development and strengthening of the non government sector s market capability and capacity, as does the Government s Social Services Cabinet Committee which was established to assist the sector with a whole of government approach. D10 Child Safety Services In view of the Carmody Inquiry, with its comprehensive terms of reference, the Commission makes no specific recommendations on changes to the delivery of child safety services in Queensland. However, the Commission encourages the Carmody Inquiry to consider, in addition to service quality, the cost effectiveness of various policy options for the delivery of child safety services. The government awaits the outcomes of the Carmody Commission of Inquiry. D12 Corrective Services The government evaluate international and interstate experience with a view to adopting successful models and innovative ways of reducing recidivism. The management of all correctional facilities in Queensland be progressively opened to competitive tendering processes, where there is a contestable market, to ensure that the best value for money outcomes are achieved. Where the operation of correctional facilities remains in public hands, market capacity be assessed at a state-wide and regional level to determine the feasibility of contracting out the provision of ancillary services to alternative cost effective suppliers, including: Noted Noted This is line with the current move towards focusing on improved outcomes which includes consideration of current national and international themes. Subject to the outcomes of the Keelty Review. Subject to the outcomes of the Keelty Review. Commission of Audit Key Recommendations Page 10 of 13
psychological and counselling services business development services for prison industries 24 hour electronic monitoring of offenders rehabilitation programs to offenders addressing the causes of criminal behaviour offender drug and alcohol testing services prison catering services court services (for example, escorting prisoners within a court complex). D14 Housing Services The government progressively transition the ownership and management of existing and new public housing stock to the nongovernment sector, with the scope and timeframe for transition to be determined by the sector s performance and governance capability. The Commission considers that there is a significant role for the non-government sector in the ownership and management of public housing stock, in order to improve the sustainability and supply of social housing. The government should progressively transfer responsibility for both existing and new stock to the nongovernment sector, with transition arrangements that take into account the sector s performance and governance capability. Noted The government wholeheartedly accepts its responsibility to deliver housing for disadvantaged and vulnerable Queenslanders. This can be achieved by different models such as private partnerships and management by community housing organisations. The government commits to exploring innovative ways of providing new public housing stock. Commission of Audit Key Recommendations Page 11 of 13
D15 Social Inclusion Social inclusion services funded by the Department of Communities, Child Safety and Disability Services (DCCSDS) be rationalised and consolidated, to reduce fragmentation and create a more integrated and strategic framework for the delivery of services. As part of the rationalisation of social inclusion services, DCCSDS work with the nongovernment sector to help it establish broader and more viable service solutions. Notes from text: DCCSDS has moved to address these matters by streamlining its social inclusion program structure. This process has several important benefits, including the opportunity to: o o o procure services that reflect the ideal service continuum encourage the rationalisation and consolidation of NGOs, so that they are better positioned to provide a broader and more viable range of services reduce low value spend. This is consistent with current directions. In the case of youth services the replanning and renewal of services is underway. The government has recently established the Social Services Cabinet Committee to connect and work with the non-government sector and this level of interaction is consistent with the government s philosophy of supporting non-government organisations to effectively deliver services on behalf of government. Commission of Audit Key Recommendations Page 12 of 13
DCCSDS continue to implement client-centred services including through integrated service delivery and case management to deliver better outcomes to clients, especially those with complex needs such as entrenched disadvantage and social exclusion. DCCSDS over time shift its investment focus to early intervention and prevention services targeting those most at risk of entrenched disadvantage and social exclusion to reduce the investment in crisis services. This is consistent with current policy directions. This is consistent with current policy directions. Commission of Audit Key Recommendations Page 13 of 13