DELANEY: The Prime Minister of Australia, Kevin Rudd. Good morning.
PM: Good morning, thank you for having me on your program.
DELANEY: How are you today?
PM: Really well, thank you.
DELANEY: Well, this is obviously a signature reform that you're hoping to take to the next election, but at the same time that's given rise to some criticism that it is nothing more than an election stunt. How serious are you about achieving meaningful reform ahead of the election?
PM: Well, the first thing I'd say is that in the two years that we've been in office so far, the Australian Government has increased its funding to the States and Territories for Australia's public hospital system by 50 per cent - five zero - up to something like $64 billion.
We've also increased the number of GP training places already by 35 per cent, and we're also investing some $3 billion-plus into the hospitals and medical research infrastructure of Australia, including a record investment of more than $1 billion in new integrated cancer care centres right across the country. So if people ask 'well, what have you been doing for the last two years', that's what we've been doing.
Now, for the future, the long-term future, what the Government did two weeks ago was launch its plan for a new National Health and Hospitals Network for the future, funded nationally, run locally, and for the first time the Australian Government becoming the dominant funder of the public hospital system of Australia. That wasn't the case before.
So, for the first two years we've been providing extra resources, significantly, into the system. Now, for the long-term future, we've put forward this plan because we cannot simply accept the hospital and health system as it is at present.
DELANEY: You've proposed a 60-40 funding split. How does that end the blame game? As long as the States have a financial stake in affairs they'll also demand some sort of input into decision making. Once again, there's the opportunity for finger pointing, isn't there?
PM: We think the fundamental change here is as follows: in the past, the Australian Government was only responsible for about 35 per cent of what's called the recurrent funding of our hospitals - effectively, what it costs to run them each year. For the first time, we increase that to 60 per cent and become the dominant funder for the first time in the country's history.
In the past, the Australian Government was responsible for none of the capital needs of our hospital system. That is, none of the building costs, none of the equipment costs, none of the costs, for example, you know, PET scanners and the modern, state-of-the-art equipment which we need right across the system, and now we increase that to 60 per cent to become the dominant funder.
And, finally, for the teaching and training costs of our public hospital system to train properly our nurses and to train properly our doctors within our major public hospitals, we take on that dominant funding responsibility as well. In the past, we did nothing.
So, when you put all those things together, this is a big, fundamental reform.
We become the dominant funders. But on top of that we become the exclusive funders of health care delivered outside of hospitals.
And so many of the problems in the past have arisen because of the brawls between what happens outside of hospitals, where the Federal Government has an historically strong role through Medicare, and what happens inside hospitals.
Now we become the exclusive funder of one and the dominant funder of the other. Therefore, the opportunity for cost shift, blame shift, is reduced hugely.
DELANEY: By re-directing 30 per cent of the GST from the States, aren't you robbing Peter to pay Paul?
PM: What we're doing is making sure that those funds, on average about one-third of the GST, are dedicated to a new National Hospitals Funds.
From that new National Hospitals Fund, we will provide funding and investment for the future expansion of Australia's public hospital system.
But secondly, when you look to the future, at present the health and hospitals budget of the States, on average, is growing by about 11 per cent a year. The GST is only growing by about six per cent a year. That gap is huge, and if you want to know one of the reasons why the system is under such stress at the moment, it's because of that gap.
Now, what we, the Australian Government, are doing is taking on responsibility for funding that growth gap in the future as well, something which the States and Territories would find impossible to do by themselves.
So when you talk about the future funding arrangements between the two levels of government, firstly, we're dedicating that to a new National Hospitals Fund, that one-third, on average, of the GST.
But secondly, we, the Australian Government, are taking on more than $15 billion of additional growth on the hospital system in the decade ahead because of that growth gap between the GST and current State outlays on health.
DELANEY: Are the States right to express concern about the possible interplay between this change to the GST and whatever might be contained in the Henry review of taxation?
PM: No, not at all, and the reason is I've said quite explicitly, on the record and to the Premiers who've asked me about it, that under no circumstances will they be in net terms worse off as a result of any changes to the taxation system which arise in response to the independent review of taxation. So that argument, frankly, is just not relevant, and we can't use that as a reason to delay action on our health and hospital system.
DELANEY: But as long as you're keeping the Henry report to yourself, you're asking people to take you on faith on that point, aren't you?
PM: As far as the States and Territories are concerned, the fundamental maths that I ran through before remain constant. That is, you look at how their hospital budgets are growing at present - 11 per cent per annum- you look at how much their GST is growing at present - six per cent per annum. Someone's got to shoulder that gap. We're putting up our hand to do that, and on top of that to grow the system further.
You know, if we didn't act on this, health and hospitals alone, it has been estimated, will totally swamp the State budgets of the States and Territories over the next 20 to 30 years. That is, they would be incapable of using their own source revenue for funding anything else - that is, schools, law and order, transport, the other things that State Governments are responsible for doing.
In fact, what we're doing through this reform is assisting them in freeing up some of their resources for these other priority areas while we take on the lion's share of the burden for the health and hospital system.
DELANEY: It's a big challenge, isn't it, to get all the States to sign on, to agree to all of the details of your proposal, especially when we don't even know what all of the details are as yet?
PM: Well, we have released something like a 75-page blueprint called the National Health and Hospitals Network, funded nationally, run locally, for the first time the Australian Government being the dominant funder of the system. That was released nearly two weeks ago and there is a lot of information within it.
What I did yesterday was also make a further announcement with the Health Minister, Nicola Roxon, on our new investment in the doctors we'll need as the life blood of this new system over the decade ahead.
This is a most significant announcement - that is, that we would deliver over 6,000 additional doctors over the coming decade through a $632 million investment: 5,500 new or training general practitioners, 680 medical specialists and more than 5,500 positions for junior doctors within hospitals as well.
But one of the key things is this: with these medical specialist positions, there'll be a large concentration of those in rural and regional areas. Similarly, with the GP training places, because in rural and regional Australia there are simply not enough doctors, there are not enough specialists, and we have to fundamentally change the system to make sure it's turned around.
DELANEY: But if you don't get the agreement of all the States, everything falls down, doesn't it. What's your plan B?
PM: Well, what I've said consistently is as follows: if we can't get agreement from the States and Territories on the proposal that we've put forward, then I have said we would go to the people and seek a further mandate for the Australian Government to obtain all the power necessary to bring about these reforms, including moving to 100 per cent funding responsibility over time.
That's what I've said from the beginning. That's what I said prior to the last election, that's what I've said consistently since then. So if the States and Territories do not agree with what we're putting forward, then that is what we would do, and that I believe is the most sensible course of action.
DELANEY: You've been criticised for having failed to meet the timetable, the original promise to arrive at this point by the middle of 2009. Was it more difficult than you anticipated?
PM: Well, there was something called the global financial crisis last year, and while that's not an excuse for being about seven or eight months late in producing our plan, I've got to say it did put a lot into our in-tray.
You see, our job as the Australian Government was to keep the economy strong, to protect the jobs of hundreds of thousands of Australians during the worst global recession since the Great Depression, and to keep Australia out of recession, which we did, when practically every other advanced economy in the world went into recession.
That was our main task last year. At the same time, we were developing our plan for long-term reform of the health and hospital system. We released that about two weeks ago. We've got a Council of Australian Governments meeting coming up in April. As I said, if we reach agreement on that, then that's our blueprint for the future. If not, then we'd be seeking a further mandate from the Australian people in order to implement that blueprint because we believe that's the right way for the future.
DELANEY: In reference to the global financial crisis and the Government's response to that, in big picture terms certainly most observers agree that that has been successful, but in the detail it's been quite an embarrassment for the Government in terms of the insulation debacle and various other allegations of wasted money and no long-term benefit to show for the money spent.
PM: Well, let me just go to the economic impact first of all. The Australian economy has been the only one of the major advanced economies to actually grow in the 08-09 period. That's just a fact.
Secondly, we've generated the second-lowest unemployment.
Thirdly, we've done so with the lowest debt and the lowest deficit, and finally, we've done so without falling into recession, which occurred practically in every other advanced economy in the world.
What's the practical consequence of that for your listeners? Hundreds of thousands of jobs for working families protected, which would otherwise have been lost through people being forced onto the unemployment queues, with huge consequences for families, for kids, and for the general economy as well.
That's what we did, and that's why we're proud of our national economic stimulus strategy.
Secondly, you talk about the impact of that strategy over time. If your listeners were to go and talk to their local schools and their local P&Cs, their local P&Fs, right across the country and ask the question: 'What is being built at my local school at present? Are we getting a new library, are we getting new classrooms, are we getting a new language centre, a new science centre, are we getting a new multipurpose hall for the first time in this school's history?'
Some 10,000 schools across the country are benefitting from these sorts of programs - government and non-government, rural, regional, metropolitan.
And so when we look back in a decade's time with kids now having built in their schools, for example, state-of-the-art, 21st century libraries, I believe this is a good legacy for the future.
DELANEY: Yes, but in practical terms the delivery of the home insulation program was a disaster and an embarrassment for the Government, and people are saying things like if they can't deliver insulation, how can they deliver on health reform?
PM: Well can I just answer that - that is, we have said quite upfront that there've been real problems in the implementation of the insulation program. And what we're doing now through Minister Combet is seeking to deal with each of those problems as they arise. Remember, also, in implementing a massive national economic stimulus strategy to prevent the Australian economy from falling into recession, we had to work and work very hard.
The second thing I'd say, though, is this, and you made a reference to the reforms for the health and hospital system - this health and hospital system we propose is to be funded nationally and run locally.
As I've said consistently, the big problem in the system at present is there are not enough funds dedicated to it in order to provide enough doctors, enough nurses and enough hospital beds. That's why for the first time in the country's history you've got the Australian Government stepping up to the plate.
But secondly, a system that will be run locally through local hospital networks right across the country. We don't want state bureaucrats or federal bureaucrats running local hospitals. What we want are local clinicians, local doctors, local nurses, local finance experts, local management experts through local hospital networks actually running the delivery of local hospital services.
So we believe we've got this balance right - funded nationally but run locally, and this is the reform we believe the nation needs, given that too many governments in the past, federal governments and State, have simply brushed this problem to one side because it was all too hard.
DELANEY: Prime Minister, finally, the front page of The Daily Telegraph today describes the current situation with asylum seekers as the Prime Minister's Tampa crisis - refugees moving to Darwin as more boats arrive. Are your policies to blame for attracting more asylum seekers to try their luck crossing the ocean?
PM: Can I just say that we have sought to just respond to each problem as it's arisen as far asylum seekers is concerned. These problems confronted the Howard government in the past, when you had large numbers, very large numbers, of asylum seekers seeking to come to Australia, and these figures change from year to year.
The second thing is this - that when you come to look at what causes the numbers, so much of it arises because you've got changing patterns of instability across the world. Most recently, the big factor affecting not just Australia but countries right across the world was the civil war in Sri Lanka in the middle part of last year.
These factors are being slowly stabilised within Sri Lanka. There's still a problem out there for not just us but many, many countries around the world as a number of Sri Lankans seek to leave their country. We'll simply deal with each of these practical problems as they arise, and we are doing so.
DELANEY: The editorial in the Telegraph suggests, from their point of view, that it's time for you and the Government to harden up on the refugee issue. Obviously, nothing the Australian Government does can influence the so-called push factors, but what we can do, of course, is determine how we respond to that influx, isn't it?
PM: Well, we believe we've got the response about right at present. I also note that some of the earlier changes that were made to the system in terms of the Pacific solution et cetera were then backed by the Opposition. Can I simply say that we have to deal with each practical problem as it arises. We will do so.
And can I say, this is not unique to this government. We've had boats arriving in this country for the last 30 years or so, and there have been more in some years than there have been in others. You just deal with these things in a practical way as each problem presents itself. We'll do so with these as well.
And remember, also, that on this one we're not alone. Every other country around the world is receiving large numbers of arrivals of asylum seekers - or most are, depending on their geographical location - and therefore it's a problem not just nationally, it's a problem regionally, it's a problem right across the world.
That's why we need to deal with it at countries of origin, you need to deal with it internationally through the right bodies, deal with it regionally in partnership with countries like Indonesia and Malaysia.
You know, there are so many interruptions now occurring in partnership with Indonesia and Malaysia of people-smuggling ventures, most of which never reach the newspapers for the simple reason that they are conducted quietly and done effectively on the ground, dealing with people smuggling networks.
However, these are practical problems which the Government has to deal with, and we'll continue to do so.
DELANEY: If we are to believe what we read in the papers, though, there seems to be a rising tide of opinion that our approach needs to change because our approach isn't making a difference.
PM: Well, can I say, in times past, when Mr Howard was Prime Minister, there were larger numbers of arrivals to Australia. Can I say that this in fact is being driven by so many changes in the global political situation.
Back then, you had instabilities arising from various conflicts around the world, then those conflicts tailed off, now we have new conflicts arising. The one I've mentioned most recently is Sri Lanka.
The important thing is to have a balanced approach to dealing with this and enhancing our cooperation with our regional partners to deal with the real challenge of people smuggling on the ground. As I said, many, many interruptions occurring almost on a weekly basis as our partners in Indonesia and Malaysia crack down with us on people smuggling.
However, these are practical problems which we'll continue to deal with, as are all governments around the region and the world.
DELANEY: Prime Minister, thank you for your time today.
PM: Thanks for having me on the program.