Australian Prime Minister Kevin Rudd’s fight with states over ambitious health reforms spearheading his re-election strategy will stretch to a second day with talks still deadlocked, a senior state leader said.
Rudd met with state premiers yesterday to convince them to accept his controversial proposal for the central government to take control of funding for state-run health by seizing a third of consumption tax revenue usually reserved for states.
“Today we have an historic opportunity to act. No ifs, no buts, no maybes,” Rudd said in a video message ahead of the meeting, piling pressure on states to accept a plan that is a centerpiece of his campaign.
Rudd remains on course for an election victory later this year, but his popularity has been shaken by his inability to deliver key first-term promises, including difficult health, climate change and education reforms.
At least three states oppose his health plan because they fear it could set a precedent for national government to raid their share of consumption tax (GST), revenue to fund reforms in other areas, eroding their constitutional power.
Failure to win over state leaders could erode Rudd’s ability to find allies in an upper house Senate dominated by opponents and force him to seek support from voters in a risky referendum in a country where direct votes usually go against the government in Canberra.
A Nielsen survey of voters, published in Fairfax newspapers ahead of the talks, showed overwhelming support for Rudd’s proposed changes to A$45 billion (US$41.2 billion) in health funding, with 62 percent of respondents wanting the states to support the reforms.
However, the poll also showed a 2 percent drop in overall support for the ruling Labor party, though it still leads the conservative opposition by an election-winning margin of 51 percent to 49 percent.
Rudd offered the states an extra A$1.1 billion on top of A$13.9 billion already promised to help states match rising health costs and fill the gap between consumption tax revenue growing by about 6 percent a year, against 8 percent a year for healthcare costs.
“These are very tough and difficult negotiations. We will continue working as long as is necessary but it’s important we get it all done. putting patients above politics,” Rudd told reporters.
In a bid to counter critics and win back jaded voters, Rudd last month proposed the biggest health shake-up for 30 years, promising to cut waiting lists for state-run public hospital surgery and take control of other health services.
South Australian Premier Mike Rann, who supports Rudd’s changes, said talks were yet to reach the most difficult area of GST control and would continue into today.
All states want hospital funding to be pooled for distribution and have been reluctant to hand control to the central government.
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