Review of Australian Government Health Workforce Programs

2.3 Health workforce levers

Page last updated: 24 May 2013

As noted by the Productivity Commission in 2005, and reflected in the HWA modelling work described elsewhere in this report, Australia’s health workforce arrangements are complex and interdependent. Along with the Commonwealth and state and territory governments, other players, including employers, universities, VET providers, professional registration boards and specialist colleges all have some capacity to influence the education, registration and employment pathways of the health workforce.

The Commonwealth

The nature of the federated system of government has resulted in divided responsibility for health care between the Commonwealth and states. Section 51(xxiiiA) of the Constitution is the primary source of the Commonwealth’s legislative powers for health, and allows for the Commonwealth to make laws with respect to ‘pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription)’. The Constitution also allows for the Commonwealth to make grants to the states that are subject to terms and conditions (Section 96); this is the basis upon which the Commonwealth funds states and territories for a range of activities, including public hospital services. Constitutional provisions are a fundamental consideration in the Commonwealth’s policy responses to health workforce issues.

In 2010, the Commonwealth funded around 43% of health services, making it the largest funder of health services in Australia. Recent additional Commonwealth funding commitments through National Health Reform measures are likely to have increased this percentage.

The Commonwealth’s capacity to influence the supply and distribution of the health workforce is exercised through a number of avenues. Adding to the complexity of the situation is that many of these are outside the health portfolio. For example, tertiary education and immigration policies and practices are also crucially important.

Tertiary Education portfolio

The Commonwealth funds university-delivered health education through Commonwealth supported places. Through its funding agreements with universities, the Commonwealth has the capacity to set targets for particular areas of study. However, from 1 January 2012, the Commonwealth moved to a demand-driven system, allowing universities (and students) to determine how many undergraduate students to enrol, and in what courses of study. Medical places are the exception – the Commonwealth continues to set a cap on the number of domestic medical places available (determined by the Minister for Tertiary Education on advice from the Minister for Health). This provides some control over the number of medical practitioners entering the Australian health training system, due to the extensive postgraduate training requirements for doctors and the current pressures on the clinical training system for all health professionals.

The Commonwealth also contributes funding to the VET sector, although state and territory governments are the primary funders.

Health portfolio

The Commonwealth can place restrictions on access to Medicare provider numbers through the Health Insurance Act 1973 (the Act) to achieve certain workforce aims, such as improving the distribution of medical practitioners in undersupplied areas. The Act includes provisions to limit Medicare benefits for services provided by medical practitioners who are not vocationally recognised (with a number of exceptions), and overseas trained doctors for a period of ten years which may be scaled if working in a district of workforce shortage.

The Commonwealth funds a large number of programs aimed at improving the supply and distribution of the health workforce, particularly in rural and remote Australia. These include infrastructure funding, rural education programs, programs placing individual obligations on funds recipients (for example, bonded medical places), and scaled incentive schemes providing greater incentives for health professionals willing to work in more rural areas. The Commonwealth delivers the vast majority of GP vocational training through General Practice Education and Training Limited (GPET), a Commonwealth-owned company, and can set the number of places available.

The Commonwealth’s control over the parameters of the MBS and the PBS can also influence the structure and make-up of the health workforce. The Commonwealth controls which health professions are eligible for a provider number (for example, nurse practitioners), and which services are included on the MBS Schedule and thereby attract a rebate and which professions may prescribe drugs for which PBS benefits are available.

Immigration portfolio

The Department of Immigration and Citizenship is responsible for determining the criteria for temporary and permanent entry of skilled professionals, allowing for the migration of overseas trained health professionals.

Free trade agreements entered into by the Australian Government restrict the capacity to limit or reduce the movement of nationals from some countries into Australia to work. This means that it is not possible to set overall caps on numbers or migration of health professionals. The World Health Organization’s Code of Practice on the International Recruitment of Health Personnel (May 2010), to which Australia is a signatory, requires ethical international recruitment practices including that migrant health personnel be hired, promoted and remunerated on objective criteria, such as levels of qualification, years of experience and degrees of professional responsibility.

Top of page

Commonwealth–state interface – COAG framework

Given the Commonwealth’s Constitutional limitations, a significant amount of Commonwealth influence with respect to health is exercised using its funding power in agreements with states and territories, negotiated through COAG. Through the Intergovernmental Agreement on Federal Financial Relations and a number of subsidiary agreements, the Commonwealth provides funding to states and territories for a range of functions, including public hospitals and VET. This has been a significant area of activity for health workforce reform over recent years, including the introduction of the NRAS, efforts to improve clinical training capacity, and the establishment of HWA.

State and territory governments

As outlined above, responsibility for health care is shared between the Commonwealth and the states and territories. The key roles of the states and territories with respect to the health workforce are listed below.

  • As the co-funders and providers of public hospital and community-based health services, states and territories:
    • Determine the distribution of publicly funded services;
    • Are major employers of the health workforce, including medical, nursing, dental and allied health professionals; and
    • Provide the majority of clinical training placements.
  • State and territory governments are responsible for primarily allocating funding to the VET, and own and operate a large number of registered training organisations (RTOs). These provide the training for health workers such as enrolled nurses, Aboriginal and Torres Strait Islander health practitioners, allied health assistants and personal care workers.
  • State and territory governments are responsible for the regulation of health professionals within their jurisdiction. On 1 July 2010, a nationally consistent regulation scheme was introduced with the passage of parallel legislation in each state and territory: the Health Practitioner Regulation National Law 2009 (the National Law) (see below).
  • States and territories also fund and deliver a range of programs to address supply and distribution issues in particular areas and professions.

Standing Council on Health

The Standing Council on Health (SCoH) is the Ministerial forum for intergovernmental negotiation on health issues. Ensuring a high quality and sustainable health workforce is listed as one of SCoH’s priorities of national significance. Whilst sitting as the Australian Health Workforce Ministerial Council (AHWMC), it also has legislative responsibilities with respect to oversight of the NRAS and the Australian Health Practitioner Regulation Agency (AHPRA) (discussed below). SCoH is supported by the Australian Health Ministers’ Advisory Council (AHMAC), which in turn is supported by the Health Workforce Principal Committee (HWPC), providing advice on workforce issues. Membership of the HWPC is comprised of representatives from each state and territory health department as well as a representative from DoHA and HWA.

Top of page

Other key stakeholders


Employers of health practitioners across the public, private and not-for-profit sectors have significant impacts on the composition and size of the health workforce. The large number and variety of employers across the sector have resulted in complex wage and industrial conditions, all of which impact on workforce development. In particular, as state and territory governments are the major employer of health professionals within their hospital systems, there are often significant variations in industrial conditions between these jurisdictions, adding a layer of complexity to national workforce planning processes.

Further, the intersection between state and territory employment arrangements and the private health care system has impacts on particular workforce groups (e.g. nurses and midwives, medical specialists) and labor market conditions both nationally and within jurisdictions.

The not-for-profit sector (third sector) refers to organisations that are funded through a mix of government grants and contracts, fees for service, fundraising and philanthropy.22 The role of the third sector in the provision of health services and employment of health practitioners is expected to increase with the greater focus on community based health care and launch of the National Compact: Working Together,23 an agreement between the Australian Government and the not-for-profit sector to collaborate to deliver better policy and programs while strengthening the sector’s viability.24 This “third sector” is likely to become increasingly critical in meeting community health care needs, given the increasing need for aged care and disability services, much of which is delivered by a mix of not-for-profit organisations and private providers.

National Boards and the Australian Health Practitioner Regulation Agency

For those health professions included in the National Registration and Accreditation Scheme (NRAS), responsibility for professional registration, accreditation of courses of study, determining professional standards, and scopes of practice lies with the National Boards. The boards are established under the National Law, and members are appointed by AHWMC with a mix of practitioner and community members. The National Boards are supported by AHPRA, which was established to administer NRAS. Further discussion of the role of the National Boards can be found in Chapter 3.

Universities and VET providers

In general, universities are responsible for maintaining accredited courses and awarding degrees, powers that are granted through their establishment legislation (noting that courses leading to eligibility for professional registration under NRAS must be externally accredited, for example, medical courses must be accredited by the Australian Medical Council). This allows universities to determine the content and make-up of degree courses where professions are not under NRAS. Recent experience with several universities developing ‘physician assistant’ degrees, a health role not currently used in Australia except in a number of time-limited trials, demonstrates the autonomy of universities in determining what courses they offer.

As outlined above, from 1 January 2012, universities have the capacity to determine how many undergraduate students are enrolled in whichever courses of study, with the exception of medicine.

In contrast to the university sector, RTOs deliver vocational education and training and cannot accredit their own courses. Most VET sector programs are based on National Training Packages, which are a nationally endorsed set of standards, guidelines and qualifications for training, assessing and recognising a person’s competencies. RTOs can also develop their own courses for skill needs not covered in the National Training Package; these must be accredited by the Australian Skills Quality Authority to be eligible for public funding. Part of the accreditation process includes an assessment of the viability and need for the course within the vocational area, requiring consultation with industry.

Top of page

Medical specialist colleges

Medical specialist colleges are responsible for delivering medical specialist education, and control entry into specialist training programs. Colleges also have legislative responsibilities under the Health Insurance Act 1973 with respect to recognising an individual as a specialist (s. 3D) or a participant in an approved training program (s. 3GA) for the purposes of Medicare billing. They are also involved in the accreditation of new training settings and maintaining standards at existing training sites. The colleges therefore play a role in determining the supply of particular specialist practitioners.

Clearly the roles and responsibilities in training, regulating and employing the health workforce to support the health care needs of Australians are split across a range of players, and differ according to profession.

The Commonwealth’s capacity to influence the supply and distribution of the health workforce (with some exceptions) resides primarily in its funding power and ability to influence workforce outcomes through legislative means. The Commonwealth also plays a key role in negotiating national outcomes through Commonwealth–state forums in areas where regulatory responsibility rests with the states.

22 I Sheppard, R Fitzgerald and D Gonski, Inquiry into the Definition of Charities and Related Organisations, Australian Government, Canberra, 2001

23 Department of the Prime Minister and Cabinet, National Compact: Working Together, Australian Government, Canberra, 2011

24 Productivity Commission, Contribution of the Not-for-Profit Sector, Research Report, Canberra, 2010