Hard decisions needed to make health system sustainable

"There needs to be a comprehensive response to attempt to make our health system sustainable into the future," Shadow Minister for Health and Ageing, Peter Dutton told CEDA's State of the Nation 2013.

"It is not sustainable for any country to spend beyond its means in the long term," he said.

"It poses difficulties for portfolios such as health which demand continued expenditure through, not just demographic changes (and) new technologies but also shifting consumer expectations."

Mr Dutton said over the past decade all government expenditure on health in Australia grew by 74 per cent in real terms.

"Australia spends nine per cent of GDP on health and it's expected to grow to 12 per cent over the next two decades.

"So the priority for any government going forward will have to be (to) reduce wasteful spending and invest in the most productive sections of our health system.

"It is my judgement that there is money within the health system at the moment and particularly in terms of the money spent across the department and its portfolio agencies.

"Some of that money is not being appropriately targeted at front line services."

Mr Dutton said that since 2007 a dozen new bureaucracies were added and the number of people employed by the health and ageing portfolio increased by 30 per cent.

"Questions need to be asked as to whether that is the most productive use of our resources," he said.

An incoming Coalition government would be duty bound to run the ruler over every dollar of health expenditure, he said.

"To continue to meet the growing demand of health programs, we will require good economic management more broadly," he said.

"This includes difficult decisions to curb spending in other areas of the nearly $400 billion Commonwealth budget."

Mr Dutton said the Coalition had already made announcements to reduce Commonwealth spending including decreasing the number of public servants by 12,000 and delaying the increase in compulsory superannuation contributions.

"All difficult decisions but necessary in the current economic environment," he said.