Senate Community Affairs Legislation Committee, , 8:07:21 to 8:10:33
Examination of the IHACPA pricing methodology, the frozen hoteling supplement, and a joint review with the department to tier pricing for rural and remote facilities.
Topics: Government spending, Cost recovery
Speakers: Prof Michael Pervan, Senator The Hon Anne Ruston
Okay. Um so given we've got seem to have a bit of a disconnect here in terms of the data that you're having to rely on being so old, the methodology and and directive that you've been given about how you can handle it, the lack of um ability to undertake or to um factor in um viability um into uh the sector. Um do you think will I hack the review and update its methodology or does it require the government's direction?
Oh so um every year we put our methodology out in great detail in what's the document called the pricing framework, and we open it up for um criticism for suggestions, review uh alternatives, um, and even between then and when we start the work to cast the price uh or the pricing advice, which is about a six-month effort, um, any additional stuff like the the letter that was drafted by Bolton Clark around administration. Um we take all of that very seriously and test it against our own model, and if we think it's an improvement, then it it gets co-opted in. But it still has to be within the policy framework that we're locked into around actual costs.
Yeah, sounds like the policy framework may need to look instead of what you're in. Um in IHACPA's um 2627 pricing advice, um there is an assumption apparent in there that the hoteling supplement will remain frozen at $2215 per resident per day. Um why have you kept that frozen? Oh, sorry, have you? And if so, why?
That was a recommendation, and that was based on the data that we had.
So your data said there had been no increase in the cost of the services that are delivered under the hoteling supplement from one year to the next?
I think once again, Senator, it wasn't a case of the costs hadn't increased, but the labour costs had come down, and they're part of those costs. So it it's very hard to keep track of, but you know, it it results in um the uh hoteling costs being kept at that level. What we are undertaking with the department is a review of um how hoteling is allocated with a view to tiering it so that it it's um uh a more equitable. Assignment of the price relating to hotelling as it comes out between rural and remote and large and small and so on. Because there are differentials in there, and the current approach doesn't adequately cover the diversity of the sector.
So the government didn't direct you to wait until that review had been finalised before you made any further recommendations in relation to hotelling?
No, the government did not.
Okay, thank you. Okay.