NSW SAYS YES TO HEALTH REFORM

Keneally says 'I do' to Rudd's health deal

Emma Rodgers, ABC

April 20, 2010, 10:20 am

New South Wales Premier Kristina Keneally is willing sign up to the Commonwealth's plan to overhaul the nation's health system, after extracting a range of concessions from the Federal Government.

After a meeting with Prime Minister Kevin Rudd this morning, Ms Keneally announced that NSW is willing to hand over a third of its GST to the Commonwealth so it can fund a 60 per cent takeover of public hospitals.

NSW Government sources say Ms Keneally approved the plan after Mr Rudd agreed to hand over $686 million to pay for implementation costs of the proposal.

It is also understood Mr Rudd has guaranteed that the GST funds are only spent on hospitals and that New South Wales gets a say in how the money is spent.

It is believed the funds will be put into some kind of state pool for distribution.

Sources say Mr Rudd will also allow for block grant funding for small rural and regional hospitals.

Ms Keneally's decision moves Mr Rudd closer to clinching a deal as Council of Australian Governments (COAG) talks begin for a second time today.

But he still faces major resistance from Victoria and Western Australia who are ignoring pressure to capitulate and allow the deal through.

Speaking before she went into the COAG meeting, Ms Keneally said the states and Commonwealth are likely to get an agreement today.

"We are in a position to be able to have the Commonwealth retain a third of our GST for direct funding of hospitals for NSW," she said.

"We have also been able to progress discussions with the Prime Minister and with the Commonwealth of the governance arrangements of a fund, as well as appropriate safeguards around the GST.

"It is in my view these things enable us to be in a position to support that the Commonwealth will retain the GST, but with these important safeguards in place and with the right governance arrangements around the operation of a fund."

The states have been arguing for a pooled fund to distribute Commonwealth and state funds to hospitals and today Ms Keneally urged resistant states to reconsider their position.

"I would just encourage all of us as first ministers to consider what's in the best interest of our states... but also what's in the best interest of national health reform," she said.

But Victorian Premier John Brumby and Western Australian Premier Colin Barnett are holding out on surrendering their slice of GST.

And Mr Brumby also wants more money on the table for hospital beds.

Fronting the media together before the COAG meeting started, the two said they were willing to put a third of their GST revenue into a funding pool.

Mr Brumby says he has shifted in his negotiating position by dropping his demand that hospitals funding be spilt evenly between the states and Commonwealth.

"We've given a bit. I hope the Prime Minister can give a bit," he said.

"I always said today would be harder. I think it's hard to tell actually how today will turn out."

Mr Barnett says they are offering the Prime Minister exactly what he wants.

"It is within the Prime Minister's grasp to achieve his reform very quickly," he said.