Hearing Services Administration Bill 1997
Hearing Services and AGHS Reform Bill 1997
March 1997
© Parliament of the Commonwealth of Australia 1997
ISSN 1038-2755
This document was produced from camera-ready copy prepared by the
Senate Community Affairs Legislation Committee Secretariat and
printed by the Senate Printing Unit, Parliament House, Canberra
MEMBERSHIP OF THE COMMITTEE
Members
Senator Sue Knowles, Chairman LP, Western Australia
Senator Meg Lees, Deputy Chair AD, South Australia
Senator Helen Coonan LP, New South Wales
Senator Kay Denman ALP, Tasmania
Senator Alan Eggleston LP, Western Australia
Senator Belinda Neal ALP, New South Wales
Participating Members
Senator Eric Abetz LP, Tasmania
Senator Lyn Allison AD, Victoria
Senator Bob Brown Greens, Tasmania
Senator the Hon Bob Collins ALP, Northern Territory
Senator Mal Colston Ind, Queensland
Senator Barney Cooney ALP, Victoria
Senator the Hon Rosemary Crowley ALP, South Australia
Senator Chris Evans ALP, Western Australia
Senator the Hon John Faulkner ALP, New South Wales
Senator Brenda Gibbs ALP, Queensland
Senator Brian Harradine Ind, Tasmania
Senator Sue Mackay ALP, Tasmania
Senator Dee Margetts GWA, Western Australia
Senator Kay Patterson LP, Victoria
Senator the Hon Margaret Reynolds ALP, Queensland
Senator Sue West ALP, New South Wales
Senator John Woodley AD, Queensland
Secretary
Mr Elton Humphery
The Senate, Parliament House
Canberra
Phone: (06) 277 3515
BACKGROUND
1.1 The Hearing Services Administration Bill 1997 (HSA Bill) and the
Hearing Services and AGHS Reform Bill 1997 (HS & AGHS Bill) were introduced
into the House of Representatives on 5 February 1997. On 25 February 1997
the Senate, on the recommendation of the Selection of Bills Committee
(Report No. 3 of 1997), referred the provisions of the Bills to the Committee
for report by 24 March 1997.
1.2 The Committee received 26 submissions, and these are listed at Appendix
1. The Committee considered the Bills at a public hearing on 19 March
1997. Details of the public hearing are referred to in Appendix 2.
THE BILLS
Hearing Services Administration Bill 1997
2.1 The Hearing Services Administration Bill 1997 will provide for the
establishment of a voucher system for the delivery of Government-funded
hearing services from 1 July 1997. This Bill, together with the Hearing
Services and AGHS Reform Bill 1997, gives effect to the Government's 1996
Budget decision to reform the delivery of Government-funded hearing services.
The purpose of these Bills is to achieve more efficient and effective
ways of delivering Government-funded hearing services to existing and
new beneficiaries to the Hearing Services program.
2.2 The purpose of the Hearing Services Administration Bill 1997 is to:
(a) improve government-funded services for adults with a hearing loss
by giving a choice of service provider and by ensuring service quality;
and
(b) introduce managed competition within and between the private sector
and the government provider of hearing services, with greater industry
involvement in self-regulation and standards.
2.3 The Bill allows the Minister to make determinations to guide the
administration of a voucher system. The scheme provides for accreditation
of suitable service providers, including the current government provider,
Australian Hearing Services (AHS); rules of conduct for service providers;
and rules surrounding the nature and extent and use of vouchers. Other
arrangements with service providers will be dealt with through contractual
arrangements.
2.4 Participants in the voucher system will be entitled to one or more
specified hearing services including assessment of hearing loss, the provision
and fitting of one or more hearing devices (for example, a hearing aid),
necessary rehabilitation and adjustment to using the devices and maintenance
and battery replacement.
2.5 Under the Bill the existing annual contribution of $25 for maintenance
and replacement of batteries will continue to apply to those accessing
the voucher system. The level and complexity of each service will depend
on clinical needs, as assessed by properly qualified staff of the service
provider in consultation with the client, and services to be of a proper
professional standard.
2.6 Administration of the voucher system is likely to be delegated by
the Minister to the Department of Health and Family Services (DHFS). Under
this delegation, the Department will primarily:
- Issue vouchers to eligible adults who qualify to be participants in
the voucher system;
- Accredit appropriate bodies as providers of hearing services to
people issued with a voucher; and
- Provide advice related to hearing services.
2.7 Unlike previous arrangements, the purpose of the legislation is to
allow people to purchase levels of service beyond those they receive free
from the Government. This will allow people to take control of their hearing
needs by allowing them not only to choose their service provider but also
to choose from a range of suitable hearing products. The Bill explicitly
provides that the only hearing devices that can be provided through the
voucher system are those that meet specifications set by the Minister.
2.8 As part of the new arrangements, the Office of Hearing Services (OHS)
will be established which will ensure that participants in the voucher
scheme have access to high quality hearing devices. The Department will
enter into arrangements with suppliers of hearing aids, most likely through
Common Use Contracts with suppliers of hearing devices. The establishment
of Common-Use contracts with suppliers will ensure that consumers have
access to devices which meet the full range of clinical needs, ensure
that these are provided at reasonable cost to the taxpayer, and ensure
that technical and performance standards are maintained.
2.9 OHS will monitor the overall operation of the voucher system, check
any instances of over or under-servicing, and receive and resolve any
complaints. Its powers will allow it to take appropriate action if satisfactory
services are not provided. OHS will also provide information and impartial
advice for consumers to assist them in making their best choices within
the scheme.
2.10 New entrants and existing Hearing Services Program participants
will benefit from the voucher system. A transition strategy will be put
in place by the OHS ensuring that pensioners and veterans already part
of the Program are able to avail themselves of the additional features
of the new arrangements in due course.
2.11 The new voucher system will affect the current operations of AHS.
AHS will not in future have exclusive rights to provide Government-funded
services. OHS will allow separation of the purchasing and regulatory functions
that have been formerly provided by AHS. This measure will allow AHS to
compete freely on an equal footing with accredited private sector service
providers. With the introduction of competition between the public and
commercial service providers, AHS will have to compete for voucher-holders
resulting in a more competitive environment and greater economic activity
within the hearing services industry sector.
2.12 AHS will continue to meet essential community service obligations
on behalf of the Government and focus on services provided to children
and designated groups of people with complex or special needs who, for
the immediate future, will remain outside the voucher arrangements. Those
in need of specialist intervention including people with high hearing
rehabilitation needs and people living in rural and remote areas such
as Aboriginal and Torres Strait Islander communities, will continue to
receive services from AHS. In important areas of research, hearing loss
prevention and industry development, AHS will continue to play a key role.
2.13 Changes to the provision of services under the voucher system require
changes to be made to the statutory charter of AHS. Provisions have been
made in the accompanying Hearing Services and AGHS Reform Bill 1997 (HS
& AGHS Bill).
Hearing Services and AGHS Reform Bill 1997
2.14 The HS & AGHS Bill proposes the necessary consequential changes
to amend the Hearing Services Act 1991 that governs AHS. The Bill
also provides some consequential amendments to the Social Security Act,
Veterans' Entitlements Act, and the Privacy Act in relation to
hearing aids and hearing services.
2.15 The HS & AGHS Bill 1997 provides for amendments to the Hearing
Services Act 1991, and for the transitional arrangements relating
to the restructuring and corporatisation of Australian Government Health
Service (AGHS) as a Commonwealth company.
2.16 AGHS, which currently operates as a business unit within the Department
of Health and Family Services, is to be replaced by a Commonwealth owned
company limited by shares, established under the Corporations Law. The
Bill provides for the transfer of AGHS assets, liabilities and records
to the new company. The transfer of AGHS staff will be handled separately
under the provisions of section 81C of the Public Service Act 1922.
2.17 Existing AGHS assets and liabilities (including the balance of funds
in the Group Two Trust Account established under section 62A of the Audit
Act 1901), are to be transferred to the new company. It is expected
that the new voucher arrangements for the provision of hearing services
and the consequential changes in operations for AHS will be implemented
on a Budget neutral basis.
2.18 The HS & AGHS Bill proposes amendments to effect changes in
eligibility for the Hearing Services Program, and the establishment of
a hearing services voucher system as provided under the HSA Bill.
2.19 Concessions under the Commonwealth Hearing Services Program will
be withdrawn from holders of Commonwealth Seniors Health Card (CSHC).
Changes are also proposed to reduce the eligibility age limit for 'Australian
children' from 21 to 'under 18 years of age'. The Bill allows for amendments
necessary to reflect changes in administrative arrangements since the
Act was last amended. These changes relate to the names of social security
'health' and veteran's 'entitlement' cards issued by the Departments of
Social Security and Veterans Affairs. These amendments will have effect
when the Act receives Royal Assent and are consequential to the passage
of the Hearing Services Administration Bill 1997. This will enable
implementation of a hearing services voucher system. Service delivery
arrangements require changes to the functions and operations of AHS which
will continue to operate as a Commonwealth statutory authority and will
be the principal public sector provider for children and prescribed public
sector clients.
2.20 Under the proposed hearing services voucher scheme, AHS will compete
on equal terms with contracted private sector service providers for the
delivery of government-funded hearing services to pensioners and eligible
veterans.
ISSUES
3.1 A number of issues were raised in submissions and at the public hearing
in relation to the Bills and these are discussed below.
Age limit reduction
3.2 A substantial number of submissions received from organisations closely
associated with assisting hearing impaired and deaf children claimed that
a significant number of hearing impaired students will not have completed
secondary schooling by the age of 18. It was suggested that hearing impaired
students were often 20 before completion and thus still dependent upon
family for financial support. DHFS advised the Committee that the vast
majority of young people with a hearing impediment will have already had
their hearing needs identified some years before they turn 18 and that
appropriate services will have already been provided.
3.3 Deafness Forum Australia and ACROD both stressed to the Committee
that 18 to 21 year olds will be discriminated against under the proposed
reforms. Particular reference was made to the potential effects upon individuals'
educational attainment, opportunities for independent living, financial
burdens placed upon individuals and families, and young persons' financial
inability to afford, and consequently, obtain benefits from private health
insurance to cover the 'gap' years. Ms Amanda Moir, representative, Deafness
Forum Australia, told the Committee that she was dependent upon her lip
reading skills and hearing aids during her secondary and tertiary studies,
during the years 18 to 21:
Without my aid ... I felt isolated socially and I struggled in class
with communication and my studies. [The reforms] would affect many young
people and place financial burden and guilt on families as well as disadvantaging
deaf and hearing impaired people. From 18 to 21 years of age, you are
not only studying but you are learning about life in general.
3.4 Mr Alistair McEwin, Member, Deafness Forum Australia, told the Committee
that during his late secondary and tertiary studies, 'I was really glad
that I had the benefit of the Australian Hearing Services in those crucial
years'. He suggested that the proposed reform to remove 18 to 21 years
olds from eligibility would severely impact upon people of that age. He
also suggested that many 18 to 21 year old people with hearing impairments
may be prepared to accept an increased annual payment from $25 to $35
to cover maintenance to ensure continued eligibility to the AHS program.
3.5 The HS & AGHS Bill provides for the continuation of services
for eligible participants as redefined, and will achieve more efficient
and effective ways of delivering Government-funded hearing services to
more than 200 000 existing beneficiaries, and to the almost 50 000 new
entrants to the program each year. OHS will provide vouchers to eligible
adults who qualify to be participants in the voucher system. Under the
new scheme, eligibility includes a person under and up to the age of 18
years.
3.6 DHFS advised the Committee that those eligible persons who have already
received hearing services will be able to obtain minor maintenance of
existing hearing devices and ear mould replacements for a period of 5
years. Those aged between 18 and under 21 years will become ineligible
for continuing assistance under the Hearing Services Program in that new
hearing devices will not be supplied free of charge (but will continue
to receive minor maintenance of their hearing device and replacement ear
moulds). This will impact on those few individuals whose hearing needs
change, or who lose or damage their hearing aids. The Committee was advised
that most hearing aids have a 'life' of 4 years.
3.7 DHFS noted in its submission that lowering the age of eligibility
to free hearing services from 21 to 18 years of age will bring the provisions
of the Bill into line with other relevant State legislation which deems
parental responsibility to have ceased at the age of 18. DHFS noted that
$0.5 million annual savings will be made from the changed eligibility
arrangements for children.
Commonwealth Seniors Health Card (CSHC) holders
3.8 In 1994, Commonwealth Seniors Health Card (CSHC) holders, (formally
private clients), were made eligible for government funded hearing services.
The expanded eligibility criteria substantially raised the number of adults
applying for AHS services. To meet the expansion in demand, AHS contracted
with the private sector to provide hearing services for part pensioners
and the additional number of CSHC clients. DHFS advised the Committee
that since July 1994, some 4000 CSHC holders have sought assistance from
AHS. The Centre for International Economics review reported a marked decline
in applications for assistance in the 1995/96 which indicates that the
increase in demand was not permanent.
3.9 The Deafness Forum of Australia suggested in its submission that
eligibility for government assisted hearing services should be available
to all people on low incomes suggesting that 'an appropriate definition
of low income should be determined and used as the criterion for eligibility'.
The Deafness Forum noted its concerns, however, that by providing access
to all CSHC holders, other eligible persons would have to wait longer
for assistance, or would receive a lesser quality of assistance.
3.10 ACROD referred to CSHC holders who were self-funded retirees, suggesting
that although many had assets, many had 'very little in the way of income'.
ACROD believed this group were discriminated against under the proposed
legislation.
3.11 The Committee was advised by DHFS that the effect of the removal
of eligibility of those holding CSHC's should not have any immediate effect
upon individuals. Those who have already received assistance from AHS
will be able to obtain minor maintenance of their hearing devices and
replacement ear moulds and will not pay the $25 annual fee. They will
have to replace their own batteries (estimated annual average cost is
of the order of $30$150). This measure will impact only on a relatively
small number of CSHC holders whose hearing needs change or if they lose
or damage their hearing aid. Any savings derived from this measure will
be applied to the cost of supplying hearing services to children and fully
eligible pensioners.
3.12 The proposed legislation provides for hearing assistance to those
identified as eligible under the new arrangements. No submissions were
received from organisations directly representing the aged or superannuants.
Cost effective delivery of hearing services
3.13 Consumer choice and increased competition will be achieved through
this legislation. The Hearing Aid Manufacturers and Distributors Association
of Australia (HAMADAA), recognised that such reforms are 'designed to
produce a more competitive environment for the delivery of publicly-funded
hearing care'. In HAMADAA's view, the measures are 'consistent with the
principles outlined by ... the Council of Australian Government (COAG)'.
3.14 AHS advised the Committee that AHS cost efficiency and effectiveness
was independently audited and verified by the Australian National Audit
Office in 1995, and claim that the cost to the taxpayer of AHS direct
services have been significantly less than those of comparable private
sector services.
3.15 The Australian College of Audiology (ACAud) reported that under
the proposed reform, 'there will be no cost differential between services
delivered by the AHS and private providers'. ACAud noted that the costs
under the proposed program 'will be contained and reduced, owing to competition
and other free market forces'. ACAud also noted that currently AHS utilises
the private sector to service some clients. Under the proposed legislation,
AHS and contracted private hearing service providers will be subject to
the same regulatory environment. This measure will provide a 'level playing
field' for those providing public hearings services and will assist private
contractors in becoming more competitive.
3.16 DHFS informed the Committee that this legislation will introduce
a system for allocating hearing services that will enhance consumer choice
and lead to service delivery efficiencies within the hearing services
industry that should be reflected in reduced program costs to government.
Greater efficiencies and the introduction of competition in the Hearing
Services Program will produce savings of approximately $4.3 million in
1997/98.
Impact on high technology employment in Australia
3.17 The Government has indicated that its collaborative arrangements
with Australian Hearing Aids Pty Ltd (a wholly owned subsidiary of Bernafon
Australia/Oticon Holdings Denmark), will continue, and contractual arrangements
will be honoured until the year 2002 for the supply of hearing aids. The
contract was rolled over with AHS and runs for 5 years from 1 October
1997 until 30 September 2002. Bernafon Australia provided employment figures
for the Brisbane area indicating that 'over 200 people are currently employed
by Bernafon Australia and Crystalaid Manufacture in their Brisbane facilities'.
3.18 The Committee was advised by HAMADAA that failure to pass these
two Bills 'would be placing at risk the 600 people already employed by
Australia's hearing aid manufacturers'. HAMADAA noted that the number
of patients being streamed to the private sector has been declining 'if
that continues, the collaborative company and AHS then gain a greater
monopoly, therefore restricting the number of devices or the types and
levels of devices that are currently available putting at risk a number
of manufacturers who find it more difficult to maintain the staff levels
that they have and might quite well be reducing them'. Further, the reforms
would 'make a valuable contribution to current and future employment prospects
in Australia's high technology industries'.
3.19 The Committee learned that joint development efforts have resulted
in a 'major technological enhancement of Australia's only existing hearing
aid manufacturing company Crystalaid Ltd'. AHS advised that hearing aids
manufactured under the joint venture arrangements have a high level of
local content and that a range of Australian companies contribute to design
and manufacture of the hearing aids. AHS indicated that 'Australian consumers,
eligible for AHS services, have access to state of the art hearing aids.
AHS is the only Government program in the world that issues programmable
hearing aids as its standard product to eligible clients'. Under the proposed
legislation eligible clients will still have access to high quality products
manufactured in Australia.
3.20 Crystalaid submitted to the Committee that the proposed legislative
arrangements make no requirement for Australian content 'in respect of
design or manufacture' of hearing devices, warning of the subsequent 'high
risk in not only losing key expertise in design and manufacture ... [and]
little chance of developing opportunities for new high technical positions
in Australia'.
3.21 DHFS advised that pricing and other arrangements for the supply
of hearing aids to the Program have not yet been set and that an Invitation
to Register Interest (IRI) process had commenced, managed by Purchasing
Australia. DHFS indicated to the Committee that the proposed voucher system
is 'expected to have little, if any, impact on the gross industry in this
sector'. The numbers of consumers and levels of need will not change under
the new system, thus the impact on the service and manufacturing industries
will not change.
Impact on imports/exports of hearing devices and technology
Imports
3.22 The Committee received information on the impact on imports of hearing
aid technology. AHS confirmed that it is a partner in the joint venture
arrangement with Bernafon for the local development and supply of hearing
aids. AHS reported that the joint venture has resulted in an integrated
hearing aid manufacturing industry in Australia, centered in Brisbane.
3.23 DHFS advised the Committee that the proposed voucher arrangements
are not expected to have any significant impact on overall industry activity.
Further, DHFS suggested that 'while some fluctuations in the import/export
ration of hearing devices or componentry might occur, it is anticipated
this will be within the range of historical market variations and not
a direct consequence of the systems arising from this legislation'.
Exports
3.24 Export of hearing devices by Australian manufacturers elicited more
comment in relation to competition. HAMADAA supports the legislation in
relation to access to the public market and economies of scale. In its
submission, HAMADAA stated:
Without access to the public market, manufacturers will be unable to
develop the economies of scale necessary to reduce per unit costs which
would make Australian made hearing aids more competitive in the international
market place. Without the development of such competitive advantages,
Australia risks losing access to not only a number of growing Asian markets,
but also the employment opportunities that are associated with increased
exports of elaborately transformed manufactured goods.
3.25 HAMADAA provided the Committee with figures indicating the growth
in Australia's exports of hearing devices. It reported that in 1992/93
export sales represented $5.5 million. In 1995/96 the figure had grown
to $35.1 million. HAMADAA expected these trends to continue once the reforms
are in place and stressed that 'a key determinate in ensuring that the
growth of these exports continue is the private manufacturing sector's
participation in servicing the public market for hearing aids'.
3.26 DHFS informed the Committee that the 'collaborative arrangements
between Australian Hearing Aids Pty Ltd and Australian Hearing Services
include provisions for exports of the Australian manufactured hearing
aids'. The provisions of this legislation should not adversely affect
the export commitments included in the new arrangements.
RECOMMENDATION
4.1 The Committee reports to the Senate that it has considered the Hearing
Services Administration Bill 1997 and the Hearing Services and AGHS Reform
Bill 1997 and RECOMMENDS that the Bills proceed. However, it foreshadows
the possibility of amendments on the floor of the Chamber to change the
eligibility age limit for 'children' from 18 years to those persons up
to 21 years of age, but that this be limited to those receiving AUSTUDY,
unemployment benefits or other benefits.
Senator Sue Knowles
Chairman
March 1997
Hearing Services Administration Bill 1997
Hearing Services and AGHS Reform Bill 1997
DISSENTING REPORT - AUSTRALIAN LABOR PARTY
The Labor Members of the Senate Community Affairs Legislation Committee
examining the Hearing Services Administration Bill 1997 and the
Hearing Services and AGHS Reform Bill 1997 dissent from the majority
report. These members believe that these bills will have a serious and
detrimental affect on services for people who are deaf or hearing impaired.
Only minor savings will be achieved and this represents an unnecessarily
callous approach to budget savings. It is also a clear breach of an election
commitment given by the Coalition to Australians during the last election.
The Australian Hearing Services is a statutory authority within the Department
of Health and Family Services. It has a network of 54 permanent and 80
visiting centres. It provides hearing services to 180,000 people, or 75%
of Australians who need hearings aids, free of charge. This includes children
and young people up to the age of 21, pensioners, veterans, and Comcare
clients.
The services provided by the Australian Hearing Services include hearing
loss assessments, the provision and fitting of hearing aids, rehabilitation
and adjustment to using hearing aids, replacement of batteries and the
maintenance of hearing aids. The AHS provides hearing aids to its clients
at an average price which is $400 lower that than of private sector providers.
The Government has two major intentions with its Hearing Services bills.
Firstly, the Government will restrict eligibility to Australian Hearing
Services. Commonwealth Seniors Health Card holders and 18 to 21 year olds
will no longer be eligible for assistance for hearing impairment. Secondly
these bills will corporatise the Australian Hearing Services and increase
contracting out.
The Coalition promised in its social security policy during the election
to "...maintain all current Commonwealth concessions".
The Prime Minister said during his third Headland speech, made to the
Australian Council of Social Service (ACOSS), on the Coalition's view
of a Fair Australia:
If the price of progress is human misery, it's not progress. If change
makes people worse off, it's not reform.
The changes proposed in this bill make people "worse off" and
are a clear breach of the Coalition's commitment to maintain all current
Commonwealth concessions. The Government is removing from Commonwealth
Seniors Health Card holders and 18 to 21 year olds access to Australian
Hearing Services.
Children and young people up to the age of 21 were previously entitled
to access to Australian Hearing Services. This is an unnecessarily ruthless
approach to budget savings. The Government will only save $500,000 a year
with each of these measures.
Labor views as unnecessarily callous the Government's intention to take
away all hearing services previously provided by the Government from 18
to 21 year olds with hearing disabilities. This decision will have a major
affect on this group of young people's lives for minor budget savings.
The Government takes a curious view of independence. When it is cutting
services, as it is in this legislation, it views the age of independence
for young people as 18, but when it is providing services, such as those
for tertiary students, it considers the age of independence as 25.
The Deafness Forum of Australia's submission to the Committee made it
very clear that this measure would have a serious impact on young deaf
and other hearing impaired people trying to study or who are trying to
find employment.
The years from 18 to 21 are a critical time...It is essential that there
be no unnecessary barriers to the successful completion of secondary and
post-secondary study...The less education any person complete, the greater
the likelihood that they will become dependant on government assistance.
The Deafness Forum made it very clear that the significant costs the
Government has imposed on 18 to 21 year old people in making them pay
full costs for hearing aids, their maintenance and other hearing services,
at what is likely to be a vulnerable time in any person of this age's
life, will be a barrier to employment and education. The organisation
also stressed that employed people at this age do not generally earn high
salaries and the extra costs would be a large financial burden.
The Deafness Forum pointed out that many 18 to 21 years olds who use
hearing aids are still completing their secondary education because their
disability has slowed their education. "They often are a number of
years behind their hearing peers."
ACROD confirmed this view, saying it was not uncommon for deaf students
to need additional years to complete their secondary education. ACROD
added that support needs of deaf students during their senior years of
secondary school and tertiary education can be high.
In addition to needing the best hearing aids available, deaf students
require FM Systems and other assistive devices as well as additional rehabilitative
support during these years. Commercially available FM aids are very expensive.
In denying Commonwealth Seniors Health Card holders access to Australian
Hearing Services the Government is also being mean spirited. AHS services
were extended to Commonwealth Seniors Health Card holders because self-funded
retirees often have very little income, even though they may have assets,
were seen to have an income level equivalent to part-pensioners. This
measure will affect the approximately 33,000 Commonwealth Seniors Health
Card holders who are either using AHS currently or will in the future,
for zero net savings. The budget states no savings will be achieve in
the 1996-97, 1997-98, 1998-99 and 1999-2000 financial years. The Department
has said $500,000 will actually be saved but this will be absorbed in
administration, restructuring or in payment of a dividend to the Government.
The Government has argued that no savings have been included because
"...the funds remain in the Program and are applied to the cost of
supplying hearing services to children and pensioners". This argument
is hard to sustain considering other cost cutting measures the Government
has applied to the AHS.
The second aspect of this bill is the administrative changes and corporatisation
of the AHS. The first step is to split the two functions of the AHS being
regulator and service provider. The regulatory functions will be transferred
to a new body and the service provision will be retained by the AHS. We
are not in principle opposed to this division but the benefits of corporatisation
appear questionable when the additional costs of restructuring and duplication
of administration are provided by the cutting of benefits to the deaf
and hearing impaired.
The Government is also introducing a voucher system so the AHS has to
compete against private providers to supply services to the hearing impaired.
Clause 20 of the Hearing Services Administration Bill 1997 gives
the Minister the power to form contracts with providers for the provision
of hearing services to voucher holders. The Labor Party is not opposed
in principle to these changes but we do not believe that such moves are
necessary when the AHS is providing an efficient, low cost, high quality
service.
The Australian Hearing Service points out that the cost efficiency and
effectiveness of the AHS has been independently audited and verified by
the Australian national Audit Office and the Centre for National Economics.
"To date the cost to the taxpayer of AHS direct services has been
significantly less than that of comparable private sector services."
The Deafness Forum of Australia said in its submission that the AHS has
been instrumental in setting and improving the quality and standards of
services provided by audiometrists in Australia, and has worked to improve
training in audiometry and to have better hearing technology developed
and manufactured in Australia. The Deafness Forum wants to see existing
services maintained, and this will not necessarily be achieved by the
private sector.
Because of its buying power, its ability to buy in large quantities,
the AHS is able to provide batteries at a 33 per cent and hearing aids
at a 50 per cent discount on what people would pay privately. AHS hearing
aids are provided to people at a price that is $400 lower on average than
private sector providers. This represents a massive saving to most people.
The Centre for International Economics said that not only were the AHS'
costs per new adult client lower than the fee paid for private sector
services, but the AHS kept its prices well below the OECD average.
The AHS' joint venture with Australian Hearing Aids Pty Ltd means the
AHS is not having to import hearing aids and is creating highly skilled
jobs and foreign investment, sales and exports in high quality hearing
aids and devices worth $200 million.
Corporatisation of services is certainly beneficial where greater efficiencies
can be achieved. In this instance, the Australian Hearing Services is
providing an efficient, cost effective and high quality service to Australian
taxpayers, the deaf and hearing impaired and the Government. It is also
helping generate skilled employment and Australian export and development
in hearing technology. There is no evidence that this change to the structure
of AHS will increase the efficiency or quality of the service.
As a final point on this legislation, it should be noted, that the Government
has once again attempted to rush legislation through the Parliament. The
Hearing Services package was introduced with the awareness that proper
scrutiny in the Senate and by this Committee could not occur before the
legislation was expected to take affect on 1 March 1997.
Recommendations
- That eligibility for AHS assistance be restored to all hearing impaired
and deaf people aged 18 to 21.
- That eligibility for AHS assistance be restored for holders of Commonwealth
Seniors Health Cards.
- That the costs of restructuring, corporatisation and duplication of
administration not be drawn from the cutting of benefits to the deaf
and hearing impaired.
- That contracting out only be proceeded with if it can be established
that the quality of service provided by the AHS can be matched at the
same or lower cost.
SENATOR BELINDA NEAL SENATOR KAY DENMAN
SENATOR SUE WEST
DISSENTING REPORT - THE AUSTRALIAN DEMOCRATS
The Australian Democrats dissent from the majority report.
The Democrats do not support the removal of hearing services concessions
from young people aged 18 to 21. The issues raised by witnesses with this
Committee highlight the many additional obstacles young people with hearing
difficulties face during their formative years. Young deaf people are
far more likely to complete their formal education at a later age than
their non-hearing impaired counterparts. This also means that young people
who are deaf are much more likely to enter the workforce and begin to
earn their own income at an older age as well.
The Democrats preferred option with regard to this part of the legislation
would be that it be completely withdrawn. We acknowledge however, that
it is very unlikely that this will happen. With this in mind, the Democrats
add their support to the recommendation contained in the Majority Report.
If this recommendation is adopted at least hearing services concessions
for young people from 18 to 21 years who are receiving AUSTUDY, unemployment
benefits or other benefits would be retained. We call upon the Government
to accept the recommendation of the Committee's majority.
There is also a strong case for extending similar concessions to hearing
impaired people who are over 21 but are the holders of a Health Care Card.
While the Democrats view the move to corporatise hearing services in
Australia with some caution, we are not at all surprised by the course
this Government is taking. It is very much in line with their stated policy
goals and the policies we have seen introduced in other areas. However,
we urge the Government to closely monitor and evaluate the effect of these
reforms once they are in place and to ensure that all Community Service
Obligations (CSOs) continue to be met by the Australian Hearing Services.
Senator Meg Lees Senator Lyn Allison
(AD, South Australia) (AD, Victoria)
APPENDIX 1 - LIST OF SUBMISSIONS RECEIVED
HEARING SERVICES ADMINISTRATION BILL 1997
HEARING SERVICES AND AGHS REFORM BILL 1997
Submission Organisation/individual
No.
1 |
Banksia Secondary College |
2 |
Parents of Hearing Impaired Children, National Network |
3 |
Committee for Hearing Impaired Children Queensland Group Inc |
4 |
Deafness Forum of Australia |
5 |
Parents of Hearing Impaired South Australia Inc |
6 |
Mr David Bullock |
7 |
SHHH Australia Inc |
8 |
Committee of Principals and Heads of Services for Deaf and Hearing Impaired Students |
9 |
Deafness Council of Western Australia |
10 |
Deafness Association of the N.T. Inc |
11 |
Parents of Hearing Impaired Children, Victorian Federation Inc |
12 |
The Advisory Council for Children with Impaired Hearing ( Victoria) - Taralye |
13 |
Ms Diane Buckley |
14 |
Early Education Program for Hearing Impaired Children |
15 |
Australian Hearing Services |
16 |
Better Hearing Australia Inc |
17 |
Australian College of Audiology (ACAud Inc) |
18 |
Hearing Aid Manufacturers and Distributors Association of Australia,Inc.(HAMADAA) |
19 |
9 Bernafon Australia Pty Ltd |
20 |
ACROD Limited |
21 |
Victorian College for the Deaf |
22 |
Parent Council for Deaf Education Inc |
23 |
Commonwealth Department of Health and Family Services |
24 |
North Shore Deaf Children's Association Incorporated |
25 |
Crystalaid Manufacture Pty Ltd |
26 |
M-E Hearing Systems |
APPENDIX 2 - PUBLIC HEARING
A public hearing was held on the Bills on 19 March 1997 in Senate Committee
Room 2S1.
Committee Members in attendance
Senator Sue Knowles (Chairman)
Senator Lyn Allison
Senator Kay Denman
Senator Alan Eggleston
Senator Belinda Neal
Witnesses
Deafness Forum of Australia
Mrs Cath Bonnes, Chairperson
Mr Brian Rope, Chief Executive Officer
Ms Amanda Moir, Representative
Mr Alistair McEwin, Member
ACROD Limited
Ms Janet Braithwaite, Executive Director
Mr Damian Lacey, Chief Executive Officer, VSDC (formerly Victorian
School for Deaf Children)
Australian College of Audiology
Mr William Vass, Vice President
Hearing Aid Manufacturers and Distributors Association of
Australia, Inc (HAMADAA)
Mr David Malcolm, President
Mr Marshall Smither, Vice President
Australian Hearing Services
Mr Philip Bert, General Manager
Ms Jill Farmers, Manager, Operations, Policy and Planning
Department of Health and Family Services
Mr Warren Cochrane, First Assistant Secretary, Disability Programs
Division
Mr Roger Barson, Assistant Secretary,
Policy and Planning Branch, Disability Programs Division
Mr Peter White, Assistant Secretary
Office of Hearing Services, Disability Programs Divisio
Commonwealth of Australia, February 1997
This document is made available under the authority of the Clerk of the
Senate, Dept. of the Senate (Australia).