Much debate over Brumby health plan

By Dr. Ananya Mandal, MDApr 9 2010

Victorian Premier John Brumby on Thursday proposed an alternative plan to the Prime Minister’s idea of gaining 30% of the GST revenues and give funding control to local hospital networks. According to the alternative 31-page health manifesto put forth by Brumby States should retain control of their hospitals. The Commonwealth proposed to cover the entire bill for primary health care and pick up 60 per cent of the tab for public hospitals. It will retain one-third of GST revenue to help pay for the reforms. Mr Brumby is holding out for extra money from the Commonwealth and a 50-50 funding model for public hospitals.

The Prime Minister earlier expressed hope to bring the opposing Premier around before the Council of Australian Governments (COAG) meeting on the 19^th of this month. He said he was elected with a mandate to deliver better health and hospital services. ''Secondly, working families, pensioners, carers have all reached a conclusion that the current system doesn't work because State Governments can't afford to fund it in the future…And therefore thirdly, that's why the Australian Government is stepping in to become the dominant funder of the public hospital system for the future,'' he said.

Mr. Brumby firmly opposes the move and plans to place his proposal before other Premiers and Chief Ministers at the COAG meeting. He believes that the States would not agree to forfeit GST revenue under the Commonwealth's takeover model. ''I just don't think it is going to work,'' Mr Brumby said. He has the support of the Victorian AMA (Australian Medical Association) already.

Now NSW Premier Kristina Keneally has also said that States would reach an agreement on the hospital reform plans soon. "Having spoken to a number of premiers across Australia I'm confident of getting agreement here for the health system," Ms Keneally told reporters in Sydney on Friday. She said, "We're all committed to working constructively, but it is appropriate for each state to put forward the needs of its state… What we do say to the Prime Minister is that options should be on the table, options for more funding now, options to consider more funding arrangements, if they are demonstrably a better outcome for the people of Australia."

Under this scheme the Government wants to become the dominant funder of the system by diverting 30 per cent of GST receipts away from the states, a move it wants endorsed at a meeting of the nation's leaders on April 19. Unless there is an agreement Prime Minister Kevin Rudd has threatened to take the issue to the people by holding a referendum at the next general election. The opposition has also come up with the statement that if the Government fails to convince all states and territories the reforms would be difficult to implement and a referendum would not be needed. According to them the referendum threat was a "political play".

Health Minister Nicola Roxon also said the Government is prepared to hold a referendum if further negotiations towards agreement did not succeed. She said, "That's not our preferred course of action and we will do everything we can to ensure that we get a good deal for the community that can be implemented by the States and the Commonwealth…But we're not prepared to compromise on delivering better outcomes for the community, and if that's what it comes to, then this is a matter that will be going to a referendum." She says the 50/50 split proposed by Victoria will cost the commonwealth about $40 billion. She said, "That is more than two-thirds of what the commonwealth pays for all states and territories for all public hospitals… It's nearly as much as the Victorian Government's entire annual budget, so I think you've got to take this pitch for more money with a bit of a grain of salt." She said Victoria will also benefit from this plan adding, “But we can't pretend that the Victorian system is perfect. There are many changes that the Commonwealth is proposing that would be of benefit to Victoria...”

She however did not rule out putting more money on the table before the COAG meeting. "I think you'll see a lot of requests, some of them realistic and some not, from the State Premiers between now and then," she said.

According to Federal opposition leader Tony Abbott, "John Brumby has been running hospitals and doing a pretty good job and understandably he doesn't want the Victorian system put at risk to try to address problems in NSW and Queensland… He's going to lose one third of his GST to have Canberra do possibly quite badly what Victoria has been doing for years."

Deputy Prime Minister Julia Gillard said the government is looking at the larger picture determined to to secure health reform across the states. She says, "But the time to act is now and I don't believe that the prime minister and the premiers will go to COAG looking to fail… I think they understand that the Australian people want action and the prime minister's determined to deliver it."