PRIME MINISTER Rudd is to be applauded for shaking the logjam of federal–state health relations, which for some time has been identified as a stumbling block to improving the health system. But that is all. His proposals as we currently know them have superficial appeal, but from a longer-term perspective they are a poisoned chalice.
The alleged advantages of the Commonwealth assumption of power are, at best, overstated. Although the Commonwealth has greater fiscal power and can ensure stable, long-term funding, it would be better to reform the tax system to meet the needs of the health system than compromise health care delivery to match an antiquated tax system. As noted in two articles in the Journal (recently published online), these reforms will not end blame-shifting. With a political incentive, some argument will be found. For example, the states will be accused of inadequate capital expenditure on infrastructure, and the Commonwealth of case payments that are too low...
Jeff Richardson is director of the Centre for Health Economics, Monash University and chaired the 2003 inquiry into the Tasmanian hospital system.