TODAY ON SUNDAY - LAURIE OAKES AND NICOLA ROXON, MINISTER FOR HEALTH AND AGEING

Sunday, 07 March 2010 11:21

LO: Minister, welcome to the program.

NR: Good morning.

LO: Are you weeping this morning for Belinda Neal?

NR: Look, I think Belinda's done a good job as a local member, and obviously we have pre selection processes in the Labor Party.  She hasn't been preselected and there'll be a new candidate at the next election.  And of course, as a Government, we're focused on what we're delivering for the people of Robertson, and I'm very pleased that our education commitments, our health commitments, the plans we've announced this week, will deliver significant benefits.  I'm sure that's what the people of Robertson will be concentrating on at the next election.

LO: Do you see any lessons, though, in what's happened to Belinda Neal and her downfall?

NR: Well I think all of us, as politicians, are always acutely aware that we are answerable to the public, we are answerable to our party, we are answerable and to local pre selectors.  That's the rules that we live and die by.  And obviously that's what's happened to Belinda.  

LO: Also, before we get onto health, what's your attitude of the idea that kids should be banned from taking part in Anzac Day marches?

NR: Well, look, I think it is ultimately a matter for the RSL.  I can understand why people have very strong views about those who have served being the people that march.  But similarly, I understand that people want these traditions to continue and for family memories to be able to be acknowledged.  But ultimately, as a politician, I don't want to be making those decisions.  I think it is up to the veterans and the RSL to make those decisions themselves.  And that's appropriately where they should be made.  

LO: OK.  The big hospital shake-up that you're trying to bring about - can you get the states onside?

NR: Well look, I think that we can.  And I'm certainly going to be using all of my efforts to.  But we've given a very clear message - not just the states and territories, but to the community - that we are not prepared to leave the health system in a business-as-usual situation.  We know that's not going to be sustainable.  We know there are a range of problems.  But ultimately, if we don't change things for the future, we will not be able to deliver the top-quality health care across the country that Australians rightly expect.  And, you know, I think Labor's got a very good history on major health reforms.  I'm proud that we've announced such an important package.  It is about getting the Federal funding sustainable into the future to give our hospitals security and into future but it's also about giving power to local networks to be able to make decisions that are appropriate for their regions.  And I think that balance is very important, and going to be very persuasive, ultimately, for premiers when they consider the detail of this package.  

LO: West Australia and Victoria seem to be the strongest hold-outs.  What's going to get them onside, do you think?  More money?

NR: Well, I don't think it's a surprise that premiers are asking for more money.  But I think they will be required to reflect on the fact that we are in a healthcare agreement right now, today, as we speak, where billions of extra dollars are flowing to them and would have come if the previous government stayed in power.  $20 billion extra, in fact - more than $5 billion of that just in Victoria.  That's flowing, right now, as we're having this reform discussion.  So I think that premiers across the country will look at the extra money that's already coming.  Of course they will ask for more money - that's not an unusual position for premiers.  But we're determined to get the financing shares and governance right for the future.  So firstly we're confident we're not wasting a single dollar, and secondly so that additional investments we know will be able to be targeted to the pressure points in the system.  And I think the premiers will all want to look at it closely.  This is a detailed plan that took us a long time to work out properly, to make sure it has got the answers to the questions that the system and the public that need to be there.  And so of course that the premiers and the states will want some time to absorb that proposal as well.  

LO: John Brumby seems to be arguing that your plan is unnecessary because Victoria has the best hospitals in the country.  Is that a valid argument? Are they that good?

NR: Well goo, I think it's a valid argument that Victoria has got a lot of strengths in its system.  And you will see, in our national plan, some of the strengths adopted and echoed in some of the proposals.  

LO: You've pinched a Jeff Kennett hospital policy, haven't you?

NR: No, I don't think that's right.  I think there's been a lot of work that has been introduced in Victoria to make sure there is a balance between local input and paying for particular services.  That's something that I would expect the Victorians to be very comfortable with.  But I don't think that Premier Brumby or, for that matter, any other premier, would argue that their health system is perfect.  And all of them argue that there are things that can be improved.  And what we're trying to do with this national plan where we step up to the lion's share of funding for our hospital and health services, but we allow local variation for local hospital networks, I actually think is very attractive for all of the country, and ultimately must happen - something must happen for us to be able to secure the future of hospitals for decades to come.  And that's why we're so committed to this.  And I think that Premier Brumby, Premier Barnett - all of the premiers - will want to take a close look at it.  I'm sure they'll put some requests they will want to put on the table.  And that's why we've released this plan so far ahead of COAG, something that I understand has never been done before so we can have this very debate, but make sure that we can get our national plan pursued and agreed to at COAG.  

LO: What about the claim from New South Wales that small and regional hospitals will be closed if your plan goes ahead, and now the nationals are saying the same thing will happen in Queensland?

NR: Well, look, it's not a surprise that the National Party are out saying this.  I think that it is absolutely wrong to say that anything in this plan will lead to the closure of hospitals.  It's a bit of a no-brainer when you put to the public that we want to pay a price for hospital services.  We don't want to just give a bucket of money or write a blank cheque to the states and territories and say "Here, you do what you thinks' best with it," not even necessarily sure if it's always spent on health.  So, moving to a fixed share of activity that is undertaken at hospitals is a good thing for the country, and we've made absolutely explicit that there will need to be loadings for local and regional hospitals.  Because we agree it's simply not  possible to provide health services for the same price in all parts of the country.  But we should have that national base, we should be able to pay directly, and we should make sure that we're paying for activity with proper loadings in place to protect our rural and regional communities.  

LO: The Federal Government's claim is that the states will be much better off financially if they accept the offer.  You seem to be saying, in fact, it's an offer that's too good for them to refuse.  I mean how much better off will they be?

NR: Well over the 10-year period, we'll be relieving around $15 billion of expenditure that otherwise would need to be met by the states and territories, or perhaps more risks for the community might not be met at all, which would mean our health services would decline in standards.  We simply can't afford to do that.  We believe that the community is right, and we share their expectation that we want higher-quality health services across the country.  And that's why we want there to be national standards in place, a national share of funding, make sure that we get what should be consistent across the country right, and allow for local variations - so local doctors and nurses can have more say in how their facilities are run.  I think that's a win-win.  And I'm sure, for the states and territories, the fact that it relieves some of the growth burden into the future is a good idea.  Remember what we've done in the past is have a 5-year agreement, pay the money, agree to that price at the start, and then leave the states and territories to meet any growing demand, or perhaps not meet that growing demand, and communities suffer.  So that's why the structural change and getting the funding right for the long-term is so important.  It's a way of actually securing services for patients, and for local doctors and nurses.

LO: Kevin Rudd says that hospital costs are going to go through the roof.  The Treasury says that, down the track, the health bill will be bigger than state budgets combined. You're about to take over responsibility for that blow-out, if you get your way.  Have you a got a plan to raise the money?

NR: Well, what is clear from the plan that we have released this week is that over the 4-year period - which is the budget period - we have accounted for the changes that re needed.

LO: But you've got to look at the long term, haven't you?

NR: Of course.  Over the 10-year period, we do take on a growing share of expenditure. And we will meet that growing share of expenditure within all of the fiscal constraints that we've already set.  That is, we made commitments before the election, we've kept those commitments, that we will not increase tax as a proportion to GDP from that that we inherited.  We're sticking with that position.  The Prime Minister, Deputy Prime Minister, Treasurer and I have all made those points.

LO: But if the Prime Minister is right - if these costs will go through the roof - if health will be more costly than entire state budgets combined - you can't keep that promise in the long term.  No Government can.

NR: Well we've made very clear the constraints within which we'll be operating.  And we've also made very clear that we don't shy away from stepping up to the mark to reforming the health system.  Remember, Laurie, this plan that's been –

LO: The money has to come from somewhere, though, Minister.

NR: Of course.  The point I was about to make - the plan that we've released this week is about getting secure funding arrangements and secure governance.  But it's also about reforming the system so that we actually control some of the demand levers and growth levers in a way that has not been possible when we divide responsibilities between the states and Commonwealth.  So the most simple point to make for that is we should be providing more services in community settings outside of hospitals in less costly settings, but also more appropriate, often, for patients.  There's never been that sort of discussion properly had in Australia, 'cause the Commonwealth has funded one and the states funded another.  This plan allows us to get rid of that silliness and actually to look at the fact that, in Australia, we're hospitalised at a much higher rate than other comparable countries.  That's an expensive way of doing health services and, it doesn't necessarily deliver better outcomes for patients.  So getting this base right actually allows us to do some of the reforms within the way we deliver healthcare.  Something that doctors and nurses have been calling for.

LO: Let’s look at the long term cost though, which is the whole reason, the whole justification for this - you said on Thursday that taxes may rise - you couldn't guarantee they wouldn't.  Now you're saying they won't.  I mean, what's happened?  Have you been given a kick by the Prime Minister?

NR: No.  What I stand absolutely by what I've said and it's been consistent with what the other members of the Government have said - the point is, of course, some of the mix may change.  Our overall commitment to making sure that taxes are proportioned to GDP remains at the levels we've committed is there.  But we've got the capacity at the Commonwealth to be able to absorb more of those costs than you see our State governments having.  

LO: But the way you're absorbing the costs in this plan is to take over a third of the GST - the GST was once described by the prime minister, when it was introduced, he said it would be known as fundamental injustice.  Now you say it's the answer to the health problem.  Is Labor now accepting the GST as not evil, that it’s good?

NR: Well look it's part of the structure of the tax system that we now have.  What we've released in the plan is to say that it's an inefficient use of it for us to collect, give this component of it back to the states, not have the sorts of clear controls in the way it's spent in health that we think is appropriate for the future, and we think that - I mean, look at the health reform commission's recommendations - they estimate that up to $1.3 billion every year could be saved by going to the system that we've proposed - the activity-based system - because it improves efficiency.  Look at the money that could be saved if the Liberal Party would get out of the way in the Senate and allow us to make some very modest changes to the private health insurance rebate that mostly just affects Australians on very high incomes.

LO: What escalation you're expecting in health is massive.  Now you've decided the GST is the way to finance your health reforms.  You can't then guarantee the GST won't rise, can you?  

NR: Well we have made absolutely clear that the GST will not rise.  That is …

LO: How can you give that guarantee?

NR: Well, you know, everybody from the Price down is giving that guarantee, Laurie.  I think there are a range of issues that we know we have to face up to as a country.  Growing costs, looking at the way we provide healthcare services, making sure every dollar is not wasted that's currently in the system.  We can't be confident of that at the moment.  There are some significant savings to be made which well will help reduce the pressure and financial pressure.  But you have to get those decisions at the level of government that can make those changes.  That's why we've put forward this very important plan - to make sure that we can sustain a fixed share of Federal funding and we can make sure that services are locally run.  And I actually think that's a real strength.  Of course the Government needs to go on with the other business of governing, and I'm confident that we can do it within the constraints that have been set.  And you've seen the Prime Minister and the Treasurer and the Deputy Prime Minister all make those points as well.

LO: Well, if the states won't go along with this plan, the Senate jacks up, you're forced to go to a referendum, can you hold a referendum without the Senate approving the referendum bill?  Do you need both houses to authorize a referendum?

NR: Well, if we get to that point - and of course we hope we'll be able to reach an agreement with the states and territories - we think that it's in their interest as well as ours because they need to deliver to communities also better healthcare.  So that's the first point.  If we aren't able to reach an agreement, we have made clear that we will take this to the public via referendum.  The constitution allows us to put that question to the Parliament.  If the Senate rejects it, there are requirement to wait for a period of time and put it back to the Senate.  But if the Senate still rejects a referendum question, the constitution allows a Government to put a question even if it is rejected by the Senate.  So yes, there are some timing constraints about how we do that, but it is possible for it to be done.  And I think you and your viewers should be reminded - healthcare reform is never easy.  It has never been easy.  It's been the subject of referendums before.  And it's only Labor governments in our history who have delivered the important changes like establishing Medicare, like establishing the PBS that pays for millions of drugs that provide relief to people every day of the week.  We're determined - we think this is of the same scale.  We'd like to be able to do it by agreement.  But if not, we're very confident there is a strong public argument for getting our health system onto a sustainable footing into the future, for Federal funding, for local running of our hospital networks and delivering better hospitals and better healthcare for patients.

LO: Minister, we thank you.

NR: Thank you.