PM: I'm joined by the Treasurer Wayne Swan and by the Minister for Health and Ageing Nicola Roxon, and first and foremost can I just start by marking that it is Pink Ribbon Day for breast cancer. As people are probably aware, around one in nine Australian women will get breast cancer some time during the course of her life, so today is the day we wear the Pink Ribbon to remind Australian women to have the health checks that they need and of course to remind all of us to look after those in our community who are suffering with breast cancer and the family and friends that love and care for them to make sure we're providing our support to those family and friends.
And today we are actually talking about health and I'm here to announce that this week the Government will introduce landmark legislation to reform the structure of the nation's health system.
Now, this is going to be the first time that a level of Government, the Commonwealth Government, will take majority funding responsibility for public hospitals and full responsibility for the funding of primary care.
Now, this change is the foundation stone for our health reform agenda, and of course our health sector is now the nation's biggest employer. Australia's hospitals are getting busier and busier every year, our population is ageing and so that puts pressure on demand. There are more chronic diseases that ever before, and that puts pressure of demand.
And yet, when we look at the Australian Government funding of hospitals prior to this Government, it was in freefall.
Now, this legislation will reverse that. It will ensure that the Australian Government, the Commonwealth, permanently pays 60 per cent of the efficient cost of each and every hospital service.
It will mean that funding for hospitals, services, will keep up with demand. That will help ease pressure on waiting lists, in emergency departments and for elective surgery.
It will mean that the Commonwealth, as the dominant funder, will be able to set new standards for hospitals which will apply right across the country, and because the Commonwealth will be responsible for most hospital costs, we will be able to invest in services outside of hospital as well - primary care and prevention - so we will obviously have that responsibility and the right incentives to invest in prevention and primary care to keep people out of hospital because it is the Commonwealth Government that is paying the majority share.
Now, for many years Mr Abbott, as Health Minister, actually mused about two reforms for the hospital system. He never got either of them done but he used to muse about the Commonwealth taking over funding for hospitals and he used to muse about imposing strict transparent standards on the States as a condition of receiving increased national funding. Well, this legislation actually delivers both, so the test for Mr Abbott now is whether he will support this legislation as it goes before the Parliament and it will be introduced this week.
I'll turn now to Nicola Roxon for some comments.
MINISTER ROXON: Thank you very much for that Prime Minister.
Obviously, as a Government we're very pleased that we are introducing this legislation this week. The Treasurer has, I'm sure, some comments to make, having gone through the negotiations with the States and Territories.
Remember that this legislation means, for the first time, the Commonwealth will be taking on a 60 per cent share of funding and in the past decade - of course, the time when Mr Abbott was the Health Minister, as well as the time when he was in Cabinet - the Commonwealth's share of funding for hospital services dropped from 45 per cent down to 38 per cent. So, this legislation is the first time that we will be guaranteeing a fixed share of hospital funding into the future.
And, of course, we're taking this step based upon the evidence. Many of you will remember, many of you having travelled with us while we got expert advice, while we went through community consultations and while we negotiated with the States and Territories to get agreement to this change.
But, of course, this also is an important part that builds upon significant investments that are going into the health system - a 50 per cent increase in hospital funding negotiated at the end of 2008 when we first came into government, but also, of course, our $7.4 billion health reform package which sits on top of that record investment in hospital services, including the delivery of 1,300 more hospital beds; training of more than 5,500 GPs over the next decade; and, of course, more nurses, more practice nurses and hundreds and hundreds of extra specialists going to rural and regional areas; expanding primary care facilities with small infrastructure grants for more than 400 GP clinics, but an additional 28 new GP clinics across the country; and, of course, our world-leading preventative health measures such as our introduction of plain packaging for tobacco which is aimed to reduce smoking levels and take pressure off our hospitals long-term.
So, the legislation is really focused on us making sure that we will improve the sustainability and the efficiency of our hospital system, and it means, as the Prime Minister mentioned, that we can leverage our investments in hospitals using strong national standards, improved transparencies, new levels of accountability, and I'm sure that the Deputy Prime Minister will want to make a few comments about how this also means we can hold our State colleagues to account, ensuring that every dollar that we invest is going to health and every dollar that they allocate for health is also spent on health - a vital change, which has been achieved through our negotiations of this agreement earlier this year.
PM: So we'll turn to Wayne. Too early in the morning for you Mark Riley? You right?
JOURNALIST: (inaudible)
PM: Good. Thank you. No problem.
TREASURER: Thanks very much, Prime Minister. Thanks very much, Nicola.
Look, this is a very significant reform of Federal-State relations, one of the most significant reforms of Federal-State relations in decades, but it's also a very significant reform in economic terms. It's about getting value for money. It's about getting value for every health dollar that we spend, so the legislation that is introduced this week will particularly go to the core of Federal-State relations and we have to go back to what we're doing here.
What we're going to do is fund 100 per cent of primary care and aged care services, and 60 per cent of the efficient price of every public hospital service provided to public patients, as well as 60 per cent of the recurrent expenditure on research and training in public hospitals and capital expenditure.
Now, the efficient pricing mechanism is very important here, that's the way we get value for money, and to do all this around one third of GST revenue will be retained by the Commonwealth and invested in the national health and hospital funds in each State, and this means we can start reversing that decline that has taken place in Commonwealth funding of public hospitals over a long period of time.
What we are now going to do is really significantly invest in our public hospitals with our State partners, but make sure we can get value for money and, of course it means that we will relieve the states of $15.6 billion in growth of health costs from 2014-2015 to 2019-2020, so it is a significant reform of Federal-State relations but a significant economic reform as well.
PM: Thank you. Questions? Yes, Laura.
JOURNALIST: Prime Minister, in the Treasury's incoming brief to the Government there seemed to some question marks about the technicalities of how you go about this, and in particular about whether you could get Western Australia to sign up to the intergovernmental agreement which will be fundamental to this going through. Even if the intergovernmental agreement conceded that Western Australia wasn't in agreement, what's the current status of those talks and when do think that will all be resolved?
PM: I'll turn to Wayne as well, but on the substance of health reform, if I can start there, I did have a brief conversation with Premier Barnett late last week in order to advise him that this legislation would be before the Parliament this week.
We obviously have to keep having some more conversations. We've provided more than $300 million in extra health funding to Western Australia. We'd like to provide around $350 million more, but in order to do that we are obviously continuing the conversation with Western Australia about getting on board with these health reforms.
I'll turn briefly to Nicola just for a comment on Western Australia and its health system, and then to Wayne on the IGA matter.
MINISTER ROXON: Yeah, thank you.
You probably will have seen, and I know our colleagues from the West Australian have been covering some of the issues in Western Australia about the delivery of health services, and there have been some significant problems, and many of the commentators and, in fact, many of the health professionals have, for example, looked at the four-hour emergency department targets that were funded partly through investments made by the Commonwealth earlier in negotiations. We have extra money ready and able to be invested in Western Australia to help assist them meet targets which they currently do not believe, or no longer believe they are going to be able to meet.
So, it is a time for Western Australia to reconsider whether their extra investment that the Commonwealth is prepared to make might be worthwhile, might assist in the delivery of health services, particularly when they're having a debate about an inability to achieve some of those targets without extra investments.
TREASURER: The talks are continuing with the States on the Intergovernmental Agreement, but they understand that we do have a legislative imperative to commence this legislation.
JOURNALIST: (inaudible)
PM: Sorry, was that a follow up question on that, and then we'll go to the back.
JOURNALIST: There's no way Western Australia will get that extra $350 million without signing up to the Intergovernmental Agreement?
PM: We have been clear with Western Australia. We want them to sign up to the health reforms. We're prepared to continue a conversation in good faith, but the Minister for Health, obviously, does point out that there are some reasons emerging in the WA health system why it's a good time to have that conversation again in good faith.
Chris?
JOURNALIST: Prime Minister, one of the arguments for doing this, of course, was that by 2050 the health costs will consume all State budgets because they are rising ahead of inflation at such a rate. What is in this agreement that will stop that from happening to the Commonwealth over time? What in this agreement constrains health costs?
PM: I'll make a comment then turn to Nicola.
You are right, of course, that a foundation stone of this reform is that the Federal Government, with its greater capacity, is stepping up to be the dominant funder for hospitals, 100% of primary care, but of course there are mechanisms built into this package of reforms to get efficiency into the system, and absolutely pivotal to that is the fact that Commonwealth funding will no longer just go as a big block to States, but we will be paying on the basis of the efficient price of services in order to drive efficiency and best practice through the systems. So, there's a reform at the centre of this which is about efficiency as well as the Federal Government stepping up to do more, because the Federal Government has the greater capacity over the long term to meet that cost.
MINISTER ROXON: As the Prime Minister said, there's two parts to this. In her introductory comments she made this very clear as well - It's the efficient use of money that is being allocated, but it's also giving one level of government, for the first time, proper financial incentives to invest outside our hospital system and earlier in somebody's healthcare needs.
We know that it's cheaper to provide support in a primary care setting or to invest in prevention, and it also has the benefit of providing better care for the individual, improving health outcomes, delaying or deferring entry into hospital, where it is more expensive to fix the problem by the time someone has got that unwell.
This is why the 60 per cent funding of hospital services, at an efficient price, and 100 per cent funding of primary care and aged care is so important, because for the first time Treasury officials, finance officials at one level of government can say it makes sense for us to invest in the front end because we won't have to pick up as much of the tab at the back end. In the past, the Commonwealth's been looking at the front end expenditure, the States have been looking at the back end and we've really never been able to put that proper incentive in place.
JOURNALIST: How will you proceed if you don't get an agreement with Western Australia?
PM: Well, look, we're going to keep having the discussions with Western Australia, so at this stage I think the best thing is to say we're going to press ahead with this legislation. We obviously have agreement with the other States and Territories and we want to proceed with this health reform. We'll keep talking to Western Australia and working through it.
We can certainly work through the questions of the legislation. There is a technical issue that Laura raised about the Intergovernmental Agreement, which can be resolved without Western Australia fully signing on to health reform, but obviously the aim we have is to have Western Australia sign on to health reform.
Yes, Andrew?
JOURNALIST: Prime Minister, there was one idea floated a few months ago and the Health Minister might know about this, about directing money directly to hospitals. I mean that one has since gone. You must have a plan B, and secondly, when it comes to WA, too, if they don't sign on and they want to increase the royalties to make up the $352 million shortfall, royalties under minerals, they could bring the mining tax down as well, with Solicitor General advice saying that it's got some constitutional problems.
Can I ask you on the second of those as well, what advice do you have that your mining tax is constitutional?
PM: Right, well we may get you to be a special adviser to the Treasurer at the next meeting of Treasurers, or perhaps we could send you with Ken Henry when the heads of Treasuries meet and we could, you know, get all of this, but this is about health reform and the heath reform track will be dealt with as the health reform track, and, obviously we've got a conversation to continue with Western Australia about health reform.
We should remind ourselves, when you talked about direct funding for hospitals, of course a great thing about this set of reforms is we will have the efficiency driven by the efficient price and for the first time ever we will have absolute line of sight about what the Commonwealth is putting in and what the State is putting in, so instead of the fears of the past, where if the Federal Government increased resources, was putting money in the top of the bucket, people used to fear that money was being dragged out the bottom of the bucket.
With these reforms there will be absolute transparency. There will be the money - known, knowable, transparent - so people know that it's going to where they want it to go, which is for better health care.
JOURNALIST: On the constitutionality of the mining tax, the Solicitor General has raised issues regarding that.
TREASURER: But not as categorically as you've said at all. I mean, naturally we'll work our way through these issues in a way which is in accord with our constitutional arrangements.
JOURNALIST: How have they raised it? if his characterisation is wrong, what has been raised?
TREASURER: Well, we've received some advice on it and we've taken that advice on board, and we are working our way through the issues.
JOURNALIST: But you got that advice many months ago. (Inaudible)
TREASURER: (inaudible) Yeah, well, that's right.
JOURNALIST: But that was many months ago, Mr Swan, so what's the Government's response to it?
TREASURER: What we are doing is working our way through the final implementation details of the tax. When we do that we will move to a legislative phase, and naturally we will do it in a way which is in accord with our constitutional responsibilities
JOURNALIST: Can the GST split go ahead in the rest of the nation though, without WA being on board? The Treasurer doesn't seem to suggest that would be possible.
PM: This is the question that Laura first raised. There's, I guess, two consent issues from WA: there is it giving its consent to the necessary changes to allow it to happen to everyone else, and then there is the question of WA wholly agreeing to sign up for health reform.
Now, obviously, our understanding of Western Australia's position is they don't seek to stand in the way of the delivery of health reform for everyone else because they know everyone else has agreed to it, but they've got their own position about health reform for themselves.
JOURNALIST: Prime Minister, you've always been quite respectful in you public commentary around John Howard. In his book he criticises the decision to change the leadership from Kevin Rudd to yourself and says that going to an early election was a blunder.
Do you think he's just, to borrow a phrase from your predecessor, messing with your head, or have you ever given thought to whether perhaps it would have been better to wait to go to an election so you could discuss more important reforms like this and benefited from that?
PM: I simply think no more or no less than this - I am respectful of what Prime Minister Howard did as Prime Minister, but I have always made the point, guided by his stars, he sees the world very differently to me, he's got a different value system to me. That's why he's devoted all of his adult life to the Liberal Party and why obviously I took a very different decision and joined the Labor Party and have devoted all of my adult life to that. So, it's no surprise really that whether it's contemporary politics or the politics of 5, 10, 15, 20 years ago, Mr Howard and I would look at things very differently.
Latika?
JOURNALIST: Prime Minister, the case of Tegan Leach in Queensland, I think it's led for some women to really ask that abortion be decriminalised in those States where it's illegal once and for all. Anna Bligh has said she won't take the fight on, I think disappointing many. Do you plan to take or show any leadership for those women who are seeking change, or will you let them down, too?
PM: These are decisions at State Government level.
Phil Coorey?
JOURNALIST: Ms Gillard, Doug Cameron on the pledge, wants to have that looked at again so that Labor and Greens aren't strictly bound by caucus solidarity. Have you got any sympathy for that view and do you have any observation on the Greens and their continuing high vote? Is it a worry to you?
PM: Well, firstly, I don't comment on the polls. We obviously get on with the job of making decisions in the nation's interests on the economy, education, broadband, climate change and obviously today on health.
On the question of public debate issues, I mean, I think it's important we've got a rich, deep, public debate about the big issues that face Australian society. For my Labor Party colleagues, I've been very clear with them - I want our caucus to be a place of debate, of ideas generation. I want that to happen in caucus committees and in caucus itself, but we come from a political Party that believes we are strengthened by being members of a team and the way the team works is we have those discussions internally and work things through through our own processes.
We'll go the back and then come forward.
JOURNALIST: Prime Minister, the legislation being introduced this week, what does that mean for surgeons, say at a hospital like Hornsby Hospital in Sydney, where they're still operating in operating theatres built in the 1960s; where the hospital is falling apart and doctors and surgeons have been saying we need to rebuild this thing badly - what does it mean in practical terms for those people?
PM: Well, I'll get Nicola to answer that first and then I'll make a comment myself.
MINISTER ROXON: Well, the most practical thing that it means immediately for those surgeons and doctors is it won't always be thus. This, as you rightly point out, is an issue that's been running for more than 30 years and that is because we have never had the balance of funding responsibilities, the transparency, the payment for efficient price - never had any of that running properly to enable hospitals to be funded properly and sustainably into the future, so what we offer to those surgeons and doctors is that there will be able to be a long-term cure for the problems of the hospital system that they've been working in.
But much more immediately than that, and I know that many advocates in New South Wales, and particularly clinicians have been arguing for this, the new local hospital networks are abolishing the current area health services in New South Wales. They have long been regarded as too big and too bureaucratic and replacing them with smaller local hospital networks, where the doctors and the nurses and other clinicians in each local hospital will have more say about the problems that need to be fixed, the investments that need to be made.
It doesn't provide an answer tomorrow for each and every hospital across the country, but it does provide a long-term answer which we, as a Government, have put up our hands and said 'we want to fix this for now and into the future'.
PM: And we do have to recognise, I mean, we came to Government in circumstances where the amount of funding as a percentage being put in by the Federal Government was going like that. We are now guaranteeing for the future 60 per cent of the costs of hospitals; giving them security of funding; having this transparency to make a difference for our healthcare system for the years to come.
And I understand there would be frustration and there are stresses and strains today. We've put a lot more money into health as a Government to help address immediate pressures and this reform agenda is the right way of doing things for the long term as the pressures on our healthcare system become even greater.
JOURNALIST: Prime Minister-
PM: Sorry, we're ignoring people over here. I'm sorry.
JOURNALIST: What initial talks have you had with the independents and Greens and what do you think you might have to offer them to get them on board?
PM: Well, obviously, in line with my agreements with the independents and with the Australian Greens I'll be speaking to them about this legislation today, but let's be frank - the position of the independents and the Greens comes into focus if Mr Abbott declines to support these reforms, so first and foremost we need an answer from Mr Abbott about whether or not he will support these reforms.
Now, when he was Health Minister, very long-serving Health Minister, as health funding from the Commonwealth went down as a percentage, we saw a lot of damage done to our health system. Even as that damage was being done, Mr Abbott would muse about reform directions - didn't get anything done, but he'd spent a lot of time talking about them.
This legislation delivers on the Commonwealth taking a greater role. This legislation delivers on national standards. These are things Mr Abbott has said in the past that he supports, so the challenge for him is: is he going to be screaming from the sidelines trying to wreck this reform the way he's been screaming from the sidelines on water, on children in detention, on interest rates, without any solutions?
It's time for him to stop screaming from the sidelines when he's got no solutions, get on board and support this legislation going through the Parliament.
JOURNALIST: Minister Roxon-
PM: -We'll just go over to Michelle and then come back.
JOURNALIST: Ms Gillard, one of the issues that seem to be concerning the Left at their meeting on the weekend was the Party's attitude on gay marriage. Is there any circumstances in which you would allow a conscience vote on that issue, and if not, why is not more of a conscience issue than a normal sort of policy issue?
PM: Well, Michelle our Party considered these questions at our last National Conference. We came up with the answer. It's in the Party's platform and policies, and so obviously the Party's polices and platform are that the Marriage Act should stay in its current form with marriage being between a man and a woman.
JOURNALIST: So what's the point on encouraging debate, then, if you don't want to be prepared to accept any of the proposals coming forward?
PM: Proper processes, proper ways of working through - that's what I've said about our Caucus. I'm pointing to the outcome of a proper process and a proper debate, which was our Party's platform and policy.
JOURNALIST: One of the things about your new paradigm is that there's more time for private member's business, Minister Roxon, and last week there was, there's a motion, I think, still before the Parliament, put by Bruce Scott, which raises alarm bells about continued problems getting doctors to regional areas because of his claim that the specialist colleges are preventing, conspiring to prevent people, particularly overseas trained doctors, from getting into the country. Are you satisfied that that is not happening, and if it is happening, what are you going to do about it?
MINISTER ROXON: I'm not satisfied that we have the answer right yet about the way to encourage more specialists and more GPs into rural and regional Australia. I am satisfied that the incentives that we are introducing and the extra training places and the work we're doing with the colleges is improving what has been a problem for a very long time.
I saw the debate. In fact, the motion was debated last sitting week and Mr Scott and a number of MPs from both sides of the parliament spoke.
We are interested in any solutions that people have, because I think this is a long-term problem where we have part of the solution which is making a difference, but we don't pretend we have the whole solution, but there is one thing I can absolutely guarantee - and I have said this directly to Mr Scott as well - we will not support the lowering of standards for health professionals coming into Australia, and say that it is OK to allow second-class or second-rate doctors or specialists to operate in rural and regional Australia.
I make no apologies for having very tight standards. We've seen the risks of failing to do that, and that is a very important balance when you ask this question.
We have to make sure that we have proper controls in place, and I can tell you the colleges are the experts about what are the proper quality standards. I, as the Health Minister, should not make those clinical decisions. I don't believe any politician should.
So, we must be careful that we keep pressure always on the colleges to apply their expertise in assessing quality standards and that we don't let that slip into what might be restricting competition in some way, but the answer is not for the government to replace itself and suddenly be the assessor of clinical standards and give the approval to individual obstetricians, or surgeons, or pathologists, or others who do need to meet Australia's stringent standards so that we can ensure we're providing quality services to the community.
PM: We'll just help Malcolm Farr out.
JOURNALIST: Thank you much.
PM: Looking unhappy. Are you alright, Malcolm?
JOURNALIST: Look, I've never been happier.
PM: Good.
JOURNALIST: Never. I'd be even happier if I could ask the Treasurer a question.
PM: Right.
JOURNALIST: Mr Swan, there are going to be some bank profits released over the next week or so, and they're going to be beauties. Isn't this a further case for the banks cutting back the premiums they put on mortgage rates and business lending rates? Isn't it a further example that they've chopped off too much for themselves?
TREASURER: Well, we haven't seen the announcements that are coming this week, but I've made it very clear, and the Reserve Bank has made it very clear, that when you look at their net interest margins - which is the way in which you judge their overall profitability - they are now back to pre-crisis levels.
So, any argument from the banks, particularly in the context of their profit announcements that may come later this week, that somehow a rise outside the Reserve Bank cycle is justified is simply wrong and I believe any rise outside the cycle would be very cynical from the major banks. I just don't think it can be justified in any way, and the evidence which has been supplied by the Reserve Bank discounts the arguments that they're putting forward.
JOURNALIST: Do you think you'd think about giving ACCC more powers if needed, and the ACCC has said that they don't have the power to price signalling? Have you got any more thoughts about that?
TREASURER: Well, there is no doubt that as one of the consequences and one of the unfortunate consequences of the Global Financial Crisis has been a further concentration in our banking sector. I mean, one of the great benefits we had during the Global Financial Crisis, however, was that our banks remained strong, but unfortunately the Global Financial Crisis weakened the non-bank lenders. One of the things that we've been doing is building up support for the non-bank lenders via our investment in residential mortgage backed securities and that is starting to pay dividends, but it will impact in the long-term. It's no magic bullet, if you like.
Now, in this context I think it is always worthwhile examining what more could be done to promote competition in the banking system. The Government has always got a weather eye open for that, and we will evaluate that as we go forward.
JOURNALIST: Prime Minister just to clarify your earlier answer to Latika's question, obviously abortion laws are a matter for the States, but for the record do you take the view that even though it's not decriminalised in some States, women have no great difficulty finding abortion, therefore let's not have the debate, let's let matters lie, or do you believe that the passage of time that it should be decriminalised?
PM: I believe that this is a matter for State governments and State parliaments to work their way through without me offering running commentary on it.
JOURNALIST: Prime Minister, what are you plan on saying to Indonesia about Schapelle Corby and will you also be raising the Bali Nine?
PM: Well, can I say later this week I will be travelling to Vietnam for the East Asia Summit. I will be coming back home via Malaysia and Indonesia. I'll have something further to say about the objectives of those visits a bit later in the week.
JOURNALIST: Minister Swan, what more can be done to increase rate competitiveness?
TREASURER: Well, what we must do is make sure that all of our arrangements are as competitive as possible. The Government has always got an eye to make sure that we can take action in that area.
JOURNALIST: But do you have any levers, any actual ideas, what you can actually do?
PM: One's always got to be very careful talking about levers, Lenore. We found that out last week.
TREASUER: Or speculating.
PM: Or speculating on them.
I think someone needs to buy Malcolm a cup of coffee, and perhaps Phil Coorey as well.
Thank you.