Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I would like to make a special mention of an issue which I raised earlier here today, in the consideration in detail, with the Parliamentary Secretary to the Treasurer: the House of Representatives Standing Committee on Health and Ageing and its report The blame game: report on the inquiry into health funding. Submissions to this inquiry are concerned with the problems experienced by certain health service providers and aged-care facilities in attracting and retaining staff as a direct result of being labelled by the ATO as non-public benevolent institutions. The experience of South Australia’s Institute of Medical and Veterinary Science is highly worthy of consideration. The petition from 1,021 citizens, which I presented to this parliament on 21 May this year, directly concerns the issue. It will come as no surprise that by far the majority of petitioners are employees of South Australia’s IMVS.

The ATO’s ruling concerning public benevolent institution status, or the lack thereof, gives or denies organisations the ability to offer fringe benefits tax-exempt salary packages. The cost of these sweeteners or packages is effectively picked up by the taxpayer. Potential health service employees are offered substantial dissimilar incentives to work for PBI versus non-PBI organisations in order to aid certain service providers, and providers of recruitment of staff. You would ordinarily expect health organisations with delivery centres in regional South Australia, for instance, to be a targeted beneficiary of the public benevolent institution tax regime so as to better attract suitably qualified personnel in sufficient numbers. One such organisation, the IMVS, is actively penalised by the ATO’s ruling on PBI status. I will quote the IMVS directly and give you a sense of their frustration. They said:

The IMVS operates laboratories in all major regional centres in South Australia. Attraction and retention of qualified and experienced staff in rural areas is problematic across a number of professions. It is exacerbated in pathology by the fact that a qualified scientist can receive a higher rate of pay for essentially the same level of work by working for another metropolitan employer and this has exacerbated the drain of staff from rural and regional laboratories for the metropolitan area.

The impact on staff replacement in regional areas from the loss of its PBI status is that the IMVS has severely damaged its ability to attract staff to rural areas as the hospitals in both rural and metropolitan settings offer a higher salary package for undertaking identical duties and classifications. This has a significant potential to reduce services to those rural services and it has impacted on the ability to provide the services to the Indigenous communities, which the IMVS serves through its northern laboratory network.

Another consequence of the current PBI tax regime is the current situation where one health service provider located within a hospital setting and responsible for many of the same functions as hospital units, including diagnostic laboratories, pathology and in-patient and outpatient clinical services, is treated differently by the ATO and whose staff are consequently unable to offer salaries comparable with staff doing identical duties within the same hospital setting.

The Royal Adelaide Hospital utilises medical registrars to undertake their training program incorporating treating inpatients, undertaking outpatient clinics and laboratory work. Some of these staff are employed directly by the RAH and some are employed by the IMVS. The Royal Adelaide Hospital enjoys classification as a public benevolent institution while the IMVS does not. So we have health professionals with the same credentials working side by side on the same patients in the same wards but receiving substantially different packages. You can imagine what this does for the recruitment and retention of IMVS staff—hence the petition from approximately 1,000 employees of the IMVS which asked the House to:

Amend the Fringe Benefits Tax Assessment Act 1986 so that:

• local governments operating aged care facilities are able to qualify for fringe benefits tax exemptions granted to public benevolent institutions for employees involved in the aged care facility; and
• fringe benefits exemptions applying to public employers delivering health services in hospital-based settings also apply to public employers providing health services in other settings.

I ask that this petition be taken into consideration by the parliament and that the objective of both the petition and the recommendation of the report on the inquiry into health funding be made a matter of urgent government business.