GST revenue cut to states a problem: WA

The federal government's plan to seize 30 per cent of the states' GST revenue to
fund its hospitals shake-up is a major stumbling block, according to Western
Australia's Liberal Premier Colin Barnett.
Prime Minister Kevin Rudd and Treasurer Wayne Swan met with Mr Barnett in Perth on
Wednesday to discuss federal Labor's reform plan, which would see the commonwealth
become the dominant funder of public hospitals.
After two hours of talks, Mr Barnett told reporters he was less likely to fall into
line than the country's Labor premiers.
"The stumbling block, the show stopper, is the GST issue," Mr Barnett said.
The WA premier believes there could be agreement on the introduction of
activity-based funding and pooling funds at the national level.
But signing away a third of GST receipts to fund Mr Rudd's national health and
hospitals network was another story altogether.
Mr Rudd wants the premiers and chief ministers to agree to his plan at a meeting in
Canberra next month.
But Mr Barnett says "the best the prime minister could hope for would be an
agreement in principle".
Mr Rudd is aware there is still a lot of work to do.
He told reporters there'd likely be another meeting with the WA premier - who he
called "Col" - before COAG meets on April 19.
"There's still a lot of work to be done," Mr Rudd said.
"We've still got a number of things to iron out. There are still areas of
disagreement."
But it wasn't all bad news for the prime minister on Wednesday.
Victoria - which along with WA has been most opposed to Mr Rudd's plan - welcomed
news that smaller country hospitals could still receive block grants.
During Tuesday's health debate the prime minister announced not every hospital would
necessarily be paid according to the number of services they deliver.
Victoria currently funds 44 rural and regional hospitals through unconditional block
grants.
"One of the reasons why smaller rural health services are able to respond so
effectively to the health needs of their communities is because they have flexible
funding from our government," Victorian Health Minister Daniel Andrews told state
parliament on Wednesday.
"The national health reform plan as (originally) advocated by the commonwealth would
have put that at risk."
That's a sentiment shared by Opposition Leader Tony Abbott.
He says Mr Rudd's "flip flop" on funding for country hospitals was an example of
policy-making on the run.
"It's a sign that this whole thing wasn't properly thought through," he said.
AAP understands an independent umpire will determine whether country hospitals
receive activity-based funding, block grants or a combination of both.
But Health Minister Nicola Roxon was being coy on Wednesday.
"We are keen to be able to keep discussing some of the technical details," she told
ABC Radio.
"Our officials have been meeting very regularly to work through this and other issues."
The PM's office said: "Country hospitals will be given loadings to account for the
fact that it is often more expensive to deliver services in rural and regional
Australia.
"If block funding is required to ensure the viability of a hospital then the Rudd
government is prepared to take that step."
The Victorian health minister says now the future of country hospitals is secure
he'll work "in other ways" to ensure the commonwealth's plan "actually benefits
patients".
That means Mr Andrews still wants extra cash on the table.
As he put it on Wednesday, "more money will mean more patients get treated faster".