States reach compromise on financial healthcare reforms

By Candy Lashkari

After all the posturing and grand standing the states have finally reached a compromise on the financial healthcare reforms suggested by the Federal Government. Prime Minister Kevin Rudd may be happy about the outcome, but he still has more to do. The work is only just beginning for the long haul.

“This is a deep reform, the biggest reform since the introduction of Medicare. The Australian Government will require the establishment of local hospital networks across the country. The Australian Government will in time also fund local hospital networks directly. Payments will therefore bypass state bureaucracies and empower local clinical leaders to flexibly tailor health services to local needs and local populations.” said Prime Minster Kevin Rudd.

The ongoing discussions on health reforms saw another twist with Western Australian Premier Colin Barnett asking for a different agreement compared to the rest of the states. While Victoria premier John Brumby who was the most outspoken critic of the health care reforms has accepted the compromise, Barnett is hoping for more.

“We wanted more money now; we got that. We wanted extra beds; we got that. We wanted a guarantee of funding beyond 2013-'14; we got that. We wanted the state as the assistant manager and we wanted pooled funding arrangements. None of those things - repeat, none of those things were on the table a month ago.” said Premier John Brumby.

The acceptance of the offer did see Brumby being criticized by former Victoria Premier Jeff Kennett who has thumbed down the government’s health reforms. "I can't see anything good out of the way in which this package has been developed or delivered or in part secured," he told ABC radio. "It is going to put the health of many Australians, probably from about 3-4 years time, very much at risk.”

The changes will see a $5.4 billion price tag for the Commonwealth over the next four years. It will rise to $20 over the next 10 years as it starts picking up the rising costs of health care in the future. However the financial implications do not bother the Prime Minister as he feels there will be a transparent flow of funds to help the local hospitals. Unfortunately Premier Barnett refuses to hand over his GST money to enable this to happen.

“As it stands now, WA will not hand over its GST. We are prepared to pay an equivalent amount into a combined fund, or we're prepared to come to some other arrangement with the Commonwealth, but we will simply not do what the other states did. We're not gonna hand away our GST. That is part of the future of WA” said Premier Colin Barnett.

A separate deal for Western Australia is what he is looking for. Legally there is a precedent for it, with it being the only state which is not a signatory to the intergovernmental agreement supporting the rollout of the Fair Work Act in 2009. WA is also not part of the Family Law Act agreement of the mid-1980s. It still has its own family law court system. So the decision on health reforms for WA is still pending.