Australian Prime Minister Kevin Rudd said yesterday he had reached agreement with all but one of the nation’s states on major health funding reform which he hopes will spearhead his re-election campaign for this year.
Failure to clinch the deal, worth more than A$45 billion (US$41.8 billion) and which will see the national government become the nation’s major health funder, would have been a blow to Rudd’s authority and fueled perceptions he has been unable to deliver the reforms that propelled it to victory over conservatives in 2007.
Rudd remains on course to win a second term later this year, with a Newspoll in the Australian newspaper yesterday giving Labor an election-winning margin of 54 to 46 percent, four points narrower than three weeks ago.
“We have reached today an historic agreement to deliver better health and hospital service to working families, to pensioners and carers, right across the country,” Rudd told reporters in Canberra after two days of tense talks.
Rudd said he had convinced all state leaders except conservative-ruled Western Australia to accept his plan for the states to give up a large slice of their consumption tax revenue, or GST, and fund a central takeover of health funding.
To secure the health deal, Rudd agreed to give state leaders extra money for state-run hospitals and a say in how a pool of A$45 billion would be spent on health and hospital funding.
Australian Treasurer Wayne Swan said earlier yesterday that the changes were needed to fund rapidly rising health costs into the future and would not breach a promise to cap growth in government spending to 2 percent a year.
Current official forecasts show no return to surplus until 2015-2016, but some economists expect the budget could be back in surplus as early as 2011-2012, four years earlier than expected, as the economy escaped the worst of the global financial crisis.
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