GST debates continue & heath reforms come under threat

By Dr. Ananya Mandal, MDNov 17 2010

The federal opposition demands more transparency from the Australian government on how much GST the states will have to hand over under a new health plan. Early this year all states apart from WA, agreed to hand over a third of their GST payments for the federal government to take responsibility for 60 per cent of the cost of running, staffing and building public hospitals. This is estimated to deliver $7.4 billion in funding for extra hospital beds, support for GPs, boosted aged care services and training for more doctors and nurses.

However the opposition remains unconvinced forcing the government to rely on the cross-bench to get the bill passed. Opposition assistant treasury spokesman Mathias Cormann said that there was a “lack of transparency” around how much the states and territories were expected to hand over. He pointed out that ACT would have to provide between 48 and 50 per cent of its GST, while Queensland would provide 40 per cent. Senator Cormann added, “This is not about health reform - this is about yet another Labor Party dash for more federal cash.” Corman said without WA’s support, the deal cannot go ahead.

Prime Minister Julia Gillard defended the situation saying the figures were misleading, as it had always been agreed that the one-third was an average across all states. She said, “That was very clear in the COAG discussions and always understood by the states… What Tony Abbott is now saying he will do is he will wreck in the parliament a reform that is going to give 1300 additional hospital beds, 6000 more doctors, 2500 more aged-care beds.”

Health Minister Nicola Roxon says the details about how much GST each state will hand back have been obvious since April. “This is about the amount of money that is currently spent by states and the amount of GST that is paid by states…This is making sure that the transfer of responsibilities is matched by transfer of money and is the base upon which we at the Commonwealth level then invest more in the health system,” she said.