Council of Australian Governments' Communiqué
14 June 1996

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Introduction

The sixth meeting of the Council of Australian Governments (COAG) completed today was the first to be held for more than a year and was held under the Chairmanship of the Prime Minister. Heads of Government have endorsed the historic package of reforms to national firearms controls agreed by Australian Police Ministers. The Council has also agreed to an agenda of major reform to re-align fundamentally Commonwealth, State and Territory activity in the health and community services and housing fields. The Council noted a report from the Gas Reform Task Force and agreed to settle outstanding issues at its next meeting.

Other major reforms include the creation of a Treaties Council which will enhance consultations between the Commonwealth and the States and Territories on treaties and other international instruments of sensitivity or importance to the States and Territories; and signature by the Prime Minister, Premiers and Chief Ministers of a Trans-Tasman Mutual Recognition Arrangement.

This Communiqué sets out the agreed outcomes of the discussions on these issues.

The Council agreed that the next meeting would be held on 15 November 1996 in Brisbane.

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Gun Control

The Council agreed that all jurisdictions would continue to move expeditiously to implement in full the resolutions by the Australian Police Ministers on 10 May 1996 on firearms control.

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Housing

The Council reaffirmed its commitment to a fundamental shift in roles and responsibilities in the provision of housing assistance involving:

(a) the Commonwealth accepting responsibility for income support and housing affordability; and
(b) the States and Territories taking responsibility for the management and delivery of public housing services.

It is proposed that the Commonwealth forward a detailed reform package to the States and Territories for consideration by the end of August. In developing its package the Commonwealth will have regard to the paper, which was noted by COAG, at Attachment A, entitled Long-Term Housing Assistance Reform.

The Council noted an interest in modelling certain aspects of the proposal to test their practicability.

Senior Officials will report to COAG at its November meeting on progress in the negotiations. The Commonwealth acknowledged that State public housing capital works programmes involve long lead-times and therefore, any date for the discontinuation of Commonwealth capital grants and detailed transitional arrangements, including carryover of funding, need to be settled well in advance of the actual switch in Commonwealth funding from capital to recurrent.

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Health and Community Services

The Council agreed to broad directions for reform of health and community services and an approach to implementation. Long-term arrangements for system-wide reform are to be explored and developed, reflecting the directions agreed by the Council in April 1995. There will be parallel work on interim steps in the shorter term.

The Council endorsed a paper prepared by officials setting out details of this approach and recommending directions for future action. A copy is at Attachment B.

Australia's health and community services system works well for most of the people most of the time, but a major weakness is its focus on providers and programmes rather than on people and outcomes. There has been too great a focus by governments on financing and intergovernmental tensions at the expense of improvements in the health of Australians and the development of best practice in prevention and treatment.

As a result, the system is not as effective as it should be; there is insufficient control of costs; and there are inefficiencies between levels of government. Services are complex and inflexible for the people who use them and inefficient and costly for the governments which fund them.

The Council agreed that there is an urgent need to shift the focus of health and community services from programmes to people, through a partnership between the Commonwealth and the States. This will involve building a system that:

• provides quality care responsive to peoples' needs;

• provides incentives for preventive health and cost effective care;

• gives better value for tax payers' dollars;

• more clearly defines roles and responsibilities; and

• retains the benefit of universal access to basic health services through Medicare.

The key elements agreed to by the Council include:

• working towards arrangements which place all health and related community services, including the Medical Benefits Scheme (MBS) and the Pharmaceutical Benefits Scheme (PBS), under the umbrella of a single multilateral agreement, with bilateral agreements covering funding and outcome measures for all relevant services. Development of these arrangements will be undertaken on the basis that they must:

  - provide improved outcomes for people;
  - not place government outlays in jeopardy; and
  - be consistent with Medicare principles;

• further exploration of key components of the long-term approach, including:

  -details of the global funding arrangements which would be put in place, taking into account concerns about risk sharing in the light of the uncapped nature of MBS and PBS;

-options for establishing a nationally consistent information and payments system which could: handle the funds covered by the bilateral agreements, enable governments to monitor the overall quality of care and provide a basis for accountability;

• interim steps to consolidate and rationalise a number of existing arrangements, including consideration of transfer of responsibility for managing aged care programmes to the States, to be developed in parallel with work on the longer term approach. A range of options for consolidating Specific Purpose Payments (SPPs) will be considered, including:

  -combining most SPPs in either the Medicare Agreements or new bilateral agreements (e.g. Public Health), with arrangements to specify access and measures of output and outcome; and
  
  -conversion of current SPPs into identified grants within the stream of State general purpose payments, with bilateral agreements defining broad objectives and specifying access and measures of output and outcome for broad functional areas within the health system.

The Council agreed that a significant realignment of roles and responsibilities could flow from this approach, involving both levels of government in jointly setting objectives, priorities and performance standards, and funding the system; with the Commonwealth taking a leadership role in relation to public health standards and health research; and the States primarily responsible for managing and coordinating the provision of services and for maintaining direct relationships with most providers. The Council recognised the significant role played by Local Government in this area.

While the reform agenda deals with government funded health and community services, further work will also be undertaken on the on-going role of private sector funding, which currently accounts for about one third of health expenditure.

Health and Community Services Ministers will progress this work, with the involvement of COAG Senior Officials, reporting back to the next Council meeting on progress with the interim steps and the development of long-term arrangements. Appropriate consultation with consumers and the industry will take place before any final decisions are taken by the Council.

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Treaties

The Council agreed to the establishment of a Treaties Council and related improvements to the provision of information about, and consultation procedures concerning, treaties and other international instruments of sensitivity or importance to the States and Territories. Premiers and Chief Ministers welcomed this initiative and saw it as a potentially important new Federal institution.

The Treaties Council will have an advisory role, and will comprise the Prime Minister and all Premiers and Chief Ministers. The inaugural meeting of the Treaties Council will be held in conjunction with the next meeting of COAG.

The agreed changes are incorporated in revised Principles and Procedures for Commonwealth-State Consultation on Treaties which the Council agreed should be adopted in order to achieve the best possible outcome for Australia in the negotiation and implementation of international treaties. They update those adopted in 1992. The revised document is at Attachment C to the communique. Amongst other changes, it sets out in detail the role and functions of the Treaties Council.

The Council also noted the reforms to the treaty making process announced by the Commonwealth on 2 May 1996 which implement, to a considerable extent, the initiatives proposed by the States and Territories in their April 1995 Joint Submission to COAG. In particular, the reforms include:

1. a new Parliamentary procedure for tabling treaties before they are ratified;

2. the establishment of a Joint Parliamentary Committee on Treaties; and

3. the enhanced provision of information on treaties, including National Interest Analyses.

The Commonwealth's intention is to review the initiatives taken to reform the treaty-making process after two years. The States and Territories recommend that the Treaties Council review the package of reforms (including the issue of parliamentary approval of treaties prior to their ratification) at that time, and the Commonwealth notes this recommendation.

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Gas

The Council noted a progress report on gas reform from Mr R M Charlton, the Chairman of the Gas Reform Task Force. Jurisdictions and the Gas Reform Task Force have made significant progress towards meeting the commitments for gas reform set at the Council's February 1994 meeting, although there are several outstanding issues. Full legislative implementation of the framework for free and fair trade in gas is unlikely to be completed before December 1996.

The report noted:

• substantial progress towards agreement of a uniform national access framework. The framework will apply Australia-wide and take the form of a Code extrinsic to legislation. It will be supported in legislation by each jurisdiction in line with an Inter-Governmental Agreement to deal with the implementation and maintenance of the Code;

• agreement had been reached on some of the main access principles to underpin the Code with further consideration being given to others such as asset valuation and other pricing principles, "ring fencing" requirements, information requirements, secondary trade arrangements and the role of franchise agreements; and

• the Task Force had agreed that the State regulator should be the regulatory institution for distribution systems.

The Council agreed that the national access framework would be finalised as follows:

• 20 June 1996 Finalisation of the principles in the draft Access Code.

• 30 June 1996 Release of the draft Access Code for a two month stakeholder consultation period.

• 30 September 1996 Access Code and associated draft Inter-Governmental Agreement to be finalised and submitted to Heads of Government for endorsement.

The Council also agreed that:

(a) the Access Code should apply to distribution systems as well as transmission pipelines; and
(b) the Commonwealth Minister for Resources and Energy would convene a meeting of State and Territory Energy Ministers to settle on a mode of regulation that would maximise competition and facilitate investment in the gas industry.

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Trans-Tasman Mutual Recognition Arrangement

At the meeting the Prime Minister, Premiers and Chief Ministers signed the TransTasman Mutual Recognition Arrangement.

The signing was attended by the New Zealand High Commissioner to Australia. The Arrangement will be despatched forthwith to New Zealand for signature by the Prime Minister of New Zealand, the Right Honourable James Bolger, MP.

The Arrangement provides for goods acceptable for sale in Australia to be sold in New Zealand (and vice versa), and for persons registered to practise an occupation in Australia to practise an equivalent occupation in New Zealand (and vice versa).

The Arrangement is intended to commence as early as possible in 1997 following the passage of Commonwealth, State, Territory and New Zealand legislation.

In entering into the Arrangement, the parties recognise the mutually beneficial economic and trade framework which has developed under the 1983 AustraliaNew Zealand Closer Economic Relations Trade Agreement and believe that trans-Tasman mutual recognition is a logical extension of this relationship. In particular, the parties believe that the Trans-Tasman Mutual Recognition Arrangement will enhance the international competitiveness of Australian and New Zealand enterprises.

Attachment D contains a description of the Arrangement.

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Northern Territory Statehood

The Council received a report from the Chief Minister of the Northern Territory (the Hon. Shane Stone MLA) on the progress made since its last meeting on the question of Statehood for the Northern Territory.

In this context, the Prime Minister indicated the Commonwealth's willingness to facilitate Statehood for the Northern Territory according to a negotiated timetable through a truly co-operative Federal partnership.

It was agreed that the issue would be taken forward primarily in bilateral discussions between the Commonwealth and the Northern Territory, with the States and the Australian Capital Territory consulted on issues affecting them or in which they express an interest.

It was noted that it is the Northern Territory's objective to achieve Statehood by the year 2001.

Last Updated: 24 October, 2008