Healthy Change From Gillard

Prime Minister Julia Gillard has announced proposed changes to the Health Funding agreement to be discussed, and possibly agreed, at the COAG meeting on Sunday.

The proposed changes include:

• Dropping the proposed loss of 30% of GST to the Federal Government. Ms Gillard referred to it as a "merry-go-round of GST money". It was to be used to raise the Federal Government's funding from 40% to 60% of health funding.
• the proposal for the Federal Government to fund 100% of out of hospital health services.
• direct funding of hospitals has gone. This is a good thing, I think. Direct funding by bodies under the control of a Prime Minister, Premier, or Minister removes some transparency, and allows for politically-driven funding. Think WorkChoices, where the independent Industrial relations Commission was disbanded, and a federal pay authority established under the effective control of former Prime Minister John Howard.
• The Federal Government will commit to funding 50% of future increases in health funding, subject to "performance targets" being met. This is less than the 60% under the previous model, and indicates to the states, especially those led by Liberal Party Premiers, that the cost of retaining control over all their GST is that the Federal Government will commit less.
• Funding will be paid by Federal & state governments to a new Health authority, to be independent of Federal & state government interference, similar to the Reserve Bank. This is a much improved policy to the direct funding model previously proposed by Kevin Rudd.

The changes are largely politically driven to gain the approval of states which have a Liberal Party Premier, including Barry O'Farrell who is expected to be NSW Premier after the 24-March election. Politics is, after all, the art of compromise.

Liberal Opposition Leader Tony Abbott has, predictably criticised the changes, calling them "the biggest backdown since the surrender of Singapore" (in WW2). Abbott has a history of criticising absolutely everything from the Federal Government, so his comments are no surprise.

It was disappointing that no journalist, not one, asked Abbott the following questions:

• Mr Abbott is this new proposed policy 'bad policy'? [Abbott would have effectively answered 'Yes']
• If it is such bad policy, why will 2 Liberal Premiers, and one Premier-in-waiting, agree to it?

Also disappointing was that no journalist asked Ms Gillard:

• Ms Gillard wasn't the direct funding model, proposed by former PM Kevin Rudd just bad policy, because it opens the possibility of future governments funding hospitals for their own political ends, and isn't it better that state governments be given a pool of funds to allocate to hospitals through their Health Departments? [this would have been awkward, because it would require criticism of Kevin Rudd's proposals, something she was at pains to try to avoid]
• GST revenue to states will fall during some future economic downturn. How will health funding be affected by future economic downturns, given that the states use GST money to partly fund health?

  John