Not yet registered?Sign upLogin

PM’s $90bn health gamble

News Clippings David Crowe with John Breusch and AAP , Australian Financial Review, March 04 2010

» Download clipping

Prime Minister Kevin Rudd has released a blueprint on a $90 billion offer to overhaul the health system by drawing on some annual GST revenue to transfer power to a network of local hospital authorities.

But states including Western Australia and Victoria objected to the plan late yesterday saying there would be no net increase in total funding for at least four years.

Opposition Leader Tony Abbott also rejected the new plan.

Such restructuring of the health system poses as a gamble for the Rudd government as any one state can veto amendments to GST arrangements and other federal-state partnership agreements.

If no agreement is reached on the reform at a Council of Australian Governments meeting in Canberra after Easter, Mr Rudd could be forced to take it to a referendum.

Reaction from the business and health-care sector was mixed, with chief executive Christopher Rex at Ramsay Health Care commenting the plan as benign for the private hospital sector.

Mr Rudd believes the restructuring amounts to the largest single healthcare reform since the introduction of Medicare.

Yesterday, Mr Rudd communicated with premiers on the reform and they indicated their concerns about redirecting GST revenue, but “the premiers said other things as well”, he quipped after a speech delivered to the National Press Club.

Ernst & Young believes states should be attracted to the plan because “the real incentive for the states is they’ve got an unsustainable financial position going forward”.

However, Family First’s Steve Fielding said in a statement “The PM said he would take over the ailing health system at the last election, yet when it comes time for action he’s shirked away from his responsibility, coming up with some half-baked hybrid idea”.

The Doctors Reform Society pointed out the changes could cut waiting lists, while Aged Care Association Australia said the reform agenda does not address the issues of aged care.

Chairman of the Australian Health Care Reform Alliance commented that the Prime Minister’s reform proposal is a “solid down-payment on a more consistent and sustainable health system for Australia”.