The Feds Take Hospitals

The Federal Government has published A National Health and Hospitals Network for Australia’s Future, which sets out how it proposes to improve health services provided to Australians.

Others are better placed to discuss whether the plan as a whole will work.

I will concentrate on a few matters.

It is proposed that the Commonwealth will take full policy and funding policy for general practice and primary health care in Australia.

This appears to be a sweeping grab of responsibilities.

However, page 41 of the federal document says:

The detail of what is “in scope” for transfer to the Commonwealth in particular states will be negotiated with the states over the coming months.

If I were a state government I would be disappointed if I were told to ‘get with the program’ without knowing the magnitude of the change.

Take this example. The ACT Government is running a programme to reduce the number of falls amongst the elderly, and thus the level of injuries (and most importantly) hospital admissions.

Does responsibility for ‘primary health care’ mean that all programmes like reducing falls amongst the elderly (or for that matter, stop smoking programmes) will be run exclusively out of Canberra?

One would have thought the ambit of responsibilities to be assumed would have been thought out before expecting others to ‘get with the programme’.

Secondly, it is noted that the general practice sector is hoping to receive more money now the Commonwealth proposes being the sole funder of general practice.

There is a touching view held by some that the Commonwealth will invariably pump in more money than the states simply because they have more access to revenue.

Like any government, the Feds have ‘horror budgets’; the competing priorities that must be managed in any budgetary cycle means that (in this case) general practice won’t receive the money it would like all the time.

In that case, they may regret a political covenant investing in one tier of government all funding and policy responsibility.

Finally, it is noted The Australian has reported:

Kevin Rudd has put the Henry tax review firmly on the backburner, confirming today that his $50 billion public health takeover plan is his top priority.

The Prime Minister said this morning he had not decided on a specific timetable for the release of the review, which was delivered to the Rudd government by Treasury secretary Ken Henry in December.

``I believe what Australian people wanted me to do is to get on with the business of delivering health and hospitals reform. Number one priority,'' he told ABC radio.

``Each thing in its season, we've got to do one thing at a time.

``But in terms of specific timetables for doing it, no, I don't have anything particular in mind.''

The Henry Tax review has as one of its terms of reference:

3.5. Simplifying the tax system, including consideration of appropriate administrative arrangements across the Australian Federation

And as we have observed Ken Henry has said in a 2009 speech that one of the things that the Henry Tax Review was going to do was to consider each tax (except the GST) on its merit and:

only then are we considering the level of government to which different taxes and transfers should be assigned, taking into account the long-term financial needs of each level of government.

He also said:

I mentioned earlier that the revenue assignment of each level of government is dependent on how we view respective long-term financial needs. And this, in turn, depends on what we think is the appropriate role of each level of government in improving the well-being of Australians. Which government is best placed to be the financier of government services? Should a particular government be the sole provider of the service, or one provider amongst many?

I do not anticipate that the Panel will be recommending that the Commonwealth take over the delivery of any particular services currently provided by the States, nor vice versa. However, we shouldn’t assume that the present allocation of roles and responsibilities is optimal. Much of the fiscal federalism architecture reflects past thinking about the appropriate role of government and the available means of addressing disadvantage.

The Health Minister has not ruled out tax increases to pay for health reforms.

It would be a pity if a systematic review of public administration (including a review of tax and responsibilities) was lapped by a rushed release of something as important as health reform.

There is a sneaking suspicion that the rush is in part to cover for the pink batts fiasco.

That taught us the lesson of what happens when I’s aren’t dotted and T’s are not crossed.

For the sake of the health of both the federation and the individual taxpayer they have been in this important structural reform proposal.