O'Farrell win will add to Gillard's headaches
Sydney Morning Herald
Saturday March 26, 2011
A few weeks ago the Victorian Health Minister, David Davis, wrote to his federal counterpart, Nicola Roxon, and he wasn't happy.His specific gripe was the National Health Performance Authority bill - a piece of legislation that has not exactly been grabbing the headlines - but is actually quite important. It is the second bill implementing aspects of the $16.4 billion health care "deal" that was struck between the Prime Minister and the premiers at that Council of Australian Governments meeting last month that ran late into the night.The authority is supposed to be a watch-dog that will check hospital performance under the new national scheme but, says Davis, the bill was introduced without consultation and allows the federal government to unilaterally release information about state health systems.He says it completely contravenes the in-principle "heads of agreement" - which is what Julia Gillard and the premiers actually signed late that Monday night because the states were taking issue with so many of the details that an actual "deal" proved impossible to reach.He is "disappointed" the federal government appears to have "abandoned the co-operative approach promised at COAG".Davis claims the upshot will be that, far from ending the blame game, the new authority will add to it - a historical reference to Kevin07's long-trampled dream to make the federal government the dominant funder of hospitals and crash through with a referendum if the recalcitrant states resisted.(The fact that Gillard's compromise abandoned this part of the reform was one reason Rudd told cabinet he could not support it, before leaving quickly - and cabinet colleagues say loudly, although Rudd insists not stormily - to catch a plane.)The griping over the performance authority is just the warm-up act for the biggest disagreement over the COAG "deal", the administration of the proposed "joint funding pool", which is still hotly disputed by Victoria and the conservative government in the west.And from today, when the voters of NSW finally get the chance to wield their baseball bats, another conservative premier is almost certain to be added to this febrile mix.When Rudd sat down at his first COAG meeting in December 2007 every leader at the table was Labor. Morris Iemma was still at the helm in NSW.At Gillard's first meeting in February there were already two conservative premiers at the table - Colin Barnett of Western Australia and Ted Baillieu from Victoria. When she meets the premiers again there will be three.This is not automatically a precursor to disharmony. State and federal leaders of different political persuasions can work well together, and have in the past - particularly when the federal leaders have given the state leaders a lot of money.But on Monday morning O'Farrell is likely to bear a heavy weight of expectation that he could actually improve services in NSW. If voters become disillusioned about how quickly the probable new premier is able to deliver, the temptation to shift some of the blame could be great.He was even laying some groundwork in a radio interview yesterday, saying he was "happy to co-operate" with any federal government that delivers benefits to NSW. To which he added, "We have been short-changed, particularly over the last three years," giving as an example the fact that despite its size, NSW got less than 2 per cent of the first round of funding from Infrastructure Australia because of the inadequate plans put forward by the Labor government.On the health deal in particular, O'Farrell has said the new system of paying hospitals the "efficient price" for what they do (rather than just giving them what they got the previous year plus inflation, which is pretty much what has happened) could disadvantage NSW, where public hospitals are among the nation's most inefficient. His government will look very hard at how the federal government sets the "efficient price" before it agrees to anything.With federal Labor's primary vote still wallowing around 36 per cent and voters clearly not yet convinced about the new minority government arrangement, Gillard desperately needs to deliver, and to be seen to deliver, some concrete results.More messiness and uncertainty around the health and hospitals deal would have the opposite effect. After all, the headlines last month clearly implied that a deal had been done, that this, at least, was a box she could tick on her long and complicated "to do" list.It is not the only area where she is banking on co-operation from her conservative state counterparts to achieve a resolution.Another is her solution to the long-running stoush over the resource super profits tax - which she renamed the mining resource rent tax at the same time as conceding it would reap billions less than first anticipated.Newly installed as Prime Minister, and desperate to get the miners off her back, Gillard signed an agreement with the three biggest mining companies that promised to pay back to the companies any future rises in state royalties. After the election, faced with the obvious fact that this promise amounted to a blank cheque to state governments, the federal government said it had not meant "all" royalty increases at all, but rather just those that were in the pipeline as of last May.Now it has been forced to concede that it will pay back all royalty increases, but the Treasurer, Wayne Swan, is warning darkly that any state increasing its royalties, effectively on the federal government's chit, will have its funding docked in other places.Barnett's response was "bring it on", and he promptly flagged a small but clearly provocative rise in royalty rates on iron ore.There is also the threat to state revenue posed by the promise to the independent Andrew Wilkie to make gamblers commit beforehand what they intend to spend on pokies, a promise Wilkie says is critical to his continued support for Labor. And state co-operation is also necessary for Murray-Darling Basin water allocation reforms.Gillard's problems inside Parliament are already complicated. From Monday her dealings with the states will get trickier too.
© 2011 Sydney Morning Herald
