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National

RMIT ABC Fact Check

We fact checked Victorian Labor's claim that Matthew Guy cut $1 billion from health. Here's what we found

Fact Check Labor Coalition Victoria Jill Hennessy David Hayward AIHW RMIT ABC Australian Institute of Health and Welfare Australian Labor Party

The claim

With health shaping up to be a key issue in the November 26 Victorian election, a series of attack ads from the Labor Party have taken aim at the Coalition's record on healthcare funding.

In a number of ads run on YouTube, Liberal leader Matthew Guy is branded by the Victorian Labor Party as "the Liberals' cuts guy" who, as a senior minister "cut $1 billion from health".

Labor's claim is not new: an identical claim about health spending under the previous government was made prior to the last state election in 2018.

At that time, Fact Check found then-health minister Jill Hennessy to be "wrong" when she said "the Victorian Liberals cut a billion dollars from health when they were last in office".

So, has anything changed? RMIT ABC Fact Check finds out.

The verdict

The Victorian Labor Party is still wrong.

Adjusted for inflation, health spending under the previous Coalition government grew from $8 billion in 2009-10 to $9.5 billion in 2014-15.

The average annual increase was $306 million.

The average annual per person increase was 1.7 per cent.

Additionally, the suggestion that Matthew Guy was responsible for the cuts is misleading: he has never held a ministerial position relating to health.

Fact Check's previous findings

For the sake of completeness, Fact Check has revisited the Australian Institute of Health and Welfare (AIHW) data used to analyse Ms Hennessy's claim.

Those figures include both recurrent expenditure, which covers the cost of wages and services, and capital expenditure, which is spending on infrastructure.

The data has been adjusted by the AIHW to take into account the effects of inflation, most recently using 2019-20 as a base year.

While this means this fact check's figures differ from those included in the 2018 analysis, which were adjusted using 2016-17 values, our findings remain the same.

Previous work on what constitutes a "cut" to spending has also been drawn upon, with experts noting in the past that budgeted savings may never eventuate, meaning the only way to reasonably assess a cut is on what actually happened.

Fact Check has also argued that "cut" is not a cut if funding continues to rise — though that growth may shrink as a result of savings measures.

Getting an accurate picture of this requires taking into account the effects of inflation, or rising costs.

And assessing whether funding went backwards means looking not only at total funding but also spending per person, which factors in population growth.

The timeline

The Victorian Liberal-National Coalition last held office between December 2010 and December 2014, and was led initially by Ted Baillieu and later Denis Napthine.

In its time, the Coalition government handed down four budgets — the first for financial year 2011-12, delivered in May 2011, and the last for financial year 2014-15.

Though 2010-11 was a Labor budget, the new government delivered that year's mid-year budget update, promising promising to produce $100 million annual budget surpluses and to "act immediately to implement its substantial savings agenda".

Once in office the Coalition announced a range of government-wide measures to reduce costs, with revenue forecasts progressively downgraded by several billion dollars in the face of worsening economic conditions.

Fact Check has assessed the Coalition's record relative to Labor's last full budget year, which was 2009-10.

What happened under the Coalition?

Contrary to Labor's claim that $1 billion had been cut from health under the Coalition, the AIHW data shows spending rose over the previous government's term.

Indeed, annual spending on health in 2009-10, Labor's last full year in office, was $8 billion, while in 2013-14, the Coalition's last full year in office, health expenditure reached $9.4 billion.

Additionally, $9.5 billion was spent in 2014-15, when the government changed hands mid-year.

The average annual increase over the five years was $306 million.

That said, health spending did not increase in every year the Coalition was in power: capital expenditure decreased in 2012-13, relative to the previous year, by $152 million, contributing to a fall of $130 million in overall health spending that year.

What about population growth?

While Labor's claim referred to total spending, Fact Check also considers per person spending to be an important measure.

Over the Coalition's time in power, the amount spent on healthcare per person in Victoria (adjusted for inflation) increased by 8.4 per cent, or an average of 1.7 per cent each year.

However, those figures do not capture significant fluctuations in per person health spending, which, when compared to the previous year, decreased by as much as 3.5 per cent in 2012-13 and increased by as much as 6.6 per cent in 2013-14.

A different source

The Victorian Labor Party did not respond to a request to provide a source for its claim.

However, in 2018, Ms Hennessy's office told Fact Check that "when last in government the Liberal Nationals imposed cuts characterised as 'savings' and 'efficiency dividends'".

As Fact Check previously detailed, the source provided by a spokeswoman for Ms Hennessy failed to account for new spending measures announced at the same time as these savings and efficiency dividends.

At the time, RMIT University public policy expert David Hayward told Fact Check that the important question was: "What's the net change?"

"Well, the net change is positive," he said.

"And it's not unusual for governments to say we're going to look for efficiency savings within a portfolio, but overall we're going to be increasing the amount going to new initiatives."

Speaking to Fact Check again recently, Dr Hayward provided an analysis of "savings" and new initiatives contained within budget papers from the Coalition's time in office.

That analysis showed total savings came to $859.1 million dollars, while new initiatives totalled $6.2 billion.

"That’s why the AIHW figures show a real increase," he said.

What was Matthew Guy's role?

Labor's ads suggest that "as a senior minister" Mr Guy was responsible for the supposed $1 billion in cuts to healthcare.

During the previous government, Mr Guy held the roles of minister for multicultural affairs and citizenship (March 2014 - December 2014) and minister for planning (December 2010 - December 2014).

In a recent email, Dr Hayward told Fact Check:

"The Minister for Planning has no say over Health, except to the extent they may have been party to Cabinet or Expenditure Review Committee deliberations."

Mr Guy has never held any portfolio associated with the Department of Health.

Principal researcher: Ellen McCutchan

factcheck@rmit.edu.au