PRIME MINISTER:
Ladies and gentlemen, Senator Patterson and I have called this news conference to announce the details of the Commonwealth Government's funding proposal for public hospitals under Medicare, in effect a renewal of the Australian Health Care Agreements from the 1st of July this year for the ensuing period of five years. The Commonwealth proposal involves a real increase in funding of 17% over the lifetime of the agreement. It's an increase of $10 billion on the amount provided for under the existing agreement, and will take the total provision, subject to the conditions we're laying down being met by the States, to about $42 billion.
The evidence that has emerged under the existing agreements points to a pattern whereby speaking nationally the Commonwealth provision for financing of public hospitals, which of course are run by the States and therefore directly administered by the States, has increased during the lifetime of the current agreements, and that the rate of increase of Commonwealth contributions has not been matched by the States. The most recent figures available from the Australian Institute of Health and Welfare indicate that for the period 1997/98 to 2001, the State and Territory share in total funding of public hospitals fell from 47.2% to 43.4%, while the Commonwealth share during the same period rose from 45.2% to 48.1%.
What the Commonwealth is proposing in effect is that we should sign an agreement with the States where both of us are committed to the maintenance of the public hospital treatment element of Medicare. Under past arrangements, the Commonwealth contribution has been there in black and white and very transparent, whereas the State contribution has not. Our wish is to see increased public funding made available for public hospitals over the lifetime of the next agreement, from both the Commonwealth and the States. Medicare consists of three elements. I'm talking here of the element that involves the availability to every Australian, if he or she wants it, of free treatment in a public hospital. And what I'm announcing today is a willingness on the part of the Commonwealth to increase by 17% in real terms - that's over and above the rate of inflation - the money that we provide for those hospitals. And we expect the States to match our commitment.
The other point I'd make is that over the past few years there has been a significant shift in the relative contributions of public and private hospitals to the treatment of Australians. Indeed, in the four year period between 1997 and 2001 something like 82% of the overall increase in the number of patients treated in hospital was accounted for by the private sector. And in 2000/01 something like 37% of hospital admissions were accounted for by the private sector, compared with 32.5% accounted for by the private sector in the last year of the previous agreement. In 2000/01 for the first time since the introduction of Medicare in 1983, there was a small fall in the number of public hospital admissions. Private hospitals in the same period had increased their admissions by some 12%.
I make these points to emphasise the contribution that the surge in private health insurance participation has made to the load being taken off public hospitals, the reduced growth in relation to people seeking admission, and also of course the overall contribution it has made to the public health expenditure. It is a matter of elementary logic that if there were less private provision and less support for that private provision, there would be a greater strain on public hospitals, and in that sense one can think of a similar argument in relation to Government and independent schools. And so much of the criticism that is directed against the private health insurance rebate completely misses the point that to the extent that it, by the tax contribution, increases the incentive for people to take out private health insurance and thereby leads to a greater utilisation of private hospitals, the load on public hospitals is reduced. But I make the point that despite that reduced load and some demographic factors, we are proposing a real increase of 17% over and above the rate of inflation.
And I'll be releasing immediately after this news conference, a detailed statement that spells out the proposal. I'll write to each of the premiers and chief ministers today explaining in detail the basis of the Commonwealth's proposal. Obviously the figures will vary a little from state to state, and equalisation factors have to be borne in mind, but the figures I've used are national figures and they give a very strong generic description of what is involved. This is a very important funding announcement. I hope the states will agree to the conditions, as will be apparent from the correspondence with the states and the commitments that we will be making, even if the States don't sign an agreement. In other words even if they don't commit, we will nonetheless maintain our funding in real terms. We won't be, even in those circumstances, but the more they commit to match, the more our funding will increase. If they match what we're asking for, then there will be a 17% real increase in funding, which I think taking in to account all of the other responsibilities we have and also bearing in mind that Senator Patterson and I next week will be announcing details of the affordability package, it represents a very strong and clear and unambiguous commitment by this Government to the universal principles of Medicare.
What we're announcing today underpins very directly our commitment to free treatment in public hospitals and what we'll be announcing next week will underpin very strongly our commitment in relation to other elements of the overall Medicare package.
JOURNALIST:
Prime Minister, what penalties will the States face if they don't match the Commonwealth?
PRIME MINISTER:
Well, it's not so much a penalty. I mean, they can be guaranteed, even if they don't match, they can be guaranteed the maintenance of real funding even if they don't sign an agreement. And if they sign an agreement, well, they'll get a lot more than real terms and if they match what we provide, they'll get 17% in real terms. So it's a very good deal for the States, a very good deal.
JOURNALIST:
Have the states been greedy do you think so far?
PRIME MINISTER:
Look, I'm not going to use those pejorative terms. I want to get an agreement with the States and you don't start getting an agreement...you don't start down the road to getting an agreement by using pejorative terms. I have no interest in a political slanging match on this issue. We have sat down and we've looked at the trends and we've worked out a bona-fide position and this is our position and it's a very generous offer. It does involve a very big real increase. It quite fairly asks the states to make the same commitment to their own hospitals that we are prepared to make. I mean, this is the point - we don't run these hospitals, we have no control over their administration, we're simply asked to contribute and on the figures I've mentioned, more than half, more than the states in operating them and we have no control over them and we're not seeking control. But what we're saying to the states is we will increase your funding in real terms but we want you to come to the party as well and make the same sort of commitment.
JOURNALIST:
But would the Commonwealth maintain the bar on charging public hospital patients?
PRIME MINISTER:
We have no proposal to change that.
JOURNALIST:
Prime Minister, aren't you saying, though, in terms of this agreement that the states have been tardy in terms of providing data...
PRIME MINISTER:
Look, I've got a detailed statement. Once again I'm not going to lapse into pejorative language. We are quite fairly saying this is a partnership, a partnership and in a partnership you sign an agreement and each assumes obligations and if it's good enough for the Commonwealth to put on display its commitment, it's good enough for the states, particularly as the states run the hospitals.
JOURNALIST:
Prime Minister, could you outline then what the states will have to...what conditions and obligations the states will have to comply with to meet that new partnership?
PRIME MINISTER:
Well, we will ask them to sign an agreement - I'm reading from my statement which you'll get in a moment - where they recommit to the Medicare principles, including the provision of free public hospital services. So that really picks up Mark Metherell's question - publicly commit to a specified level of funding for the period of the agreement, report on progress against this funding commitment each year and commit to a new performance reporting framework. I mean, it's a departure from the past practise where we just...we make a commitment, it's the commitment that's out there in writing but there is no serious, transparent commitment from the States. Now, what I'm saying to the States is, we are willing to increase funding for public hospitals, we're willing to do that, we want you to make a similar commitment.
JOURNALIST:
Do you believe the states can afford it?
PRIME MINISTER:
Do I believe the states can afford it, of course they can afford to do it. I mean, one of the things I gently point out in the letter I intend to write to the states is that by the end of the period of this forthcoming agreement every state and territory will be better off than what they are now as a result of the introduction of the GST.
JOURNALIST:
Is this a model for other areas of shared Commonwealth-State funding like housing and education?
PRIME MINISTER:
Look, I'm not seeking to make this a model or a template. This is a very important area. There is no area that is more important and we are committed to maintaining the public hospital system and we are committed to maintaining it as an integral part of Medicare. We're also very strongly committed to supporting private health insurance because we think it makes - and it's the figures I've indicated - makes a very strong commitment to taking some of the load off public hospitals. And whether you can adapt this to other areas, I'm not going to say, I'm not making that claim.
JOURNALIST:
Do you hope it will end cost shifting which has been the big bugbear of this...
PRIME MINISTER:
Well, if you are more transparent and you are obliged to be more transparent then cost shifting is harder. I'm an idealist but I'm not so idealistic to think that you would ever totally eliminate cost shifting and that there won't still be wicked people at a state level who deviously try and shift expenses.
JOURNALIST:
Prime Minister, what's to stop the states from refusing to sign an agreement and then just blaming the Commonwealth for not providing any growth?
PRIME MINISTER:
Well, I think they will. I think what would stop them doing that would be the reaction of the Australian public. The Australian public is fed-up with this sort of blame shifting business. We're fed up with it, in every area. And they are very smart, Australians, very smart people and they work this out and if they think that it's just being...just the automatic game...now, I'm just saying to the states, here's our offer, it's 17% more in real terms, I'm explaining the basis of it, if you sign up you get all of it. Even if you don't sign an agreement we'll guarantee a real term but if you sign the agreement and then you agree to match the whole amount well you'll get the whole 17%. I mean, it's a good offer and I hope that when Senator Patterson, as she will be doing, convenes a meeting of state and territory ministers in a short while that we'll be able to deal with the agreement.
JOURNALIST:
Prime Minister, to change the topic slightly, or actually incredibly, can you rule out going to an early election, calling an early election?
PRIME MINISTER:
Fran, I have no desire to have an early election. No Prime Minister ever absolutely rules something out of that character, that's foolish. But look at my record in relation to previous elections, I don't want an early election, I think the Australian public is legitimately cynical of governments that call early elections for evident reasons of partisan political advantage. I would expect the Australian public to react adversely if any government in this country called an early election for no good public policy reason. I want to leave it at that.
JOURNALIST:
Would a good public policy reason be to get your programme through the Senate?
PRIME MINISTER:
Well that doesn't alter what I've previously said, I think Jim you are aware of the provisions of the Constitution, you are aware of the fact that the first sitting day of the current parliament was on a certain date in February of 2002.
JOURNALIST:
Is it true that as one columnist opined earlier this week that you'd prefer to see Kim Beazley leading the Labor Party?
PRIME MINISTER:
Look I'm not going to make any comment about the leadership of the Labor Party. Whatever I say about that is understandably seen, however I phrase it, as being self-serving. And I'm just not going to get into that game. The leadership of the Labor Party is a matter for the Labor Party.
JOURNALIST:
... make an announcement on your future in July?
PRIME MINISTER:
Look I don't have anything to add...
JOURNALIST:
In July or earlier, maybe in June?
PRIME MINISTER:
I'm not adding anything to what I've said on that.
JOURNALIST:
... Hans Blix seems to be suggesting the United States may not have been completely truthful about its knowledge of Saddam's weapons of mass destruction. What's your take on his recent comments?
PRIME MINISTER:
I thought when you looked at the totality of what Blix had said he'd been verballed a bit by that piece being pulled out. The American position and the British position and our position was based on intelligence and that intelligence pointed very strongly, very strongly indeed, published intelligence and some classified intelligence that could not be published pointed very strongly to what we said. And it remains my belief that what was said was correct.
JOURNALIST:
Where's the evidence though Prime Minister?
PRIME MINISTER:
Well I think you have to be a little more patient than most, with great respect, commentators have been. I mean does anybody, I think I've said this before in this very place, do people really imagine there were going to be signposts on the road to Baghdad or Basra saying "second turn left, WMD in large storehouse?" I mean it just doesn't work that way. And indeed there's some evidence emerging that some weapons were destroyed shortly before the war commenced. Now, I mean I'm reacting there to particular reports.
JOURNALIST:
No doubt that the intelligence was credible, you don't have any...
PRIME MINISTER:
I thought the, well I wouldn't have relied on it otherwise?
JOURNALIST:
(inaudible)?
PRIME MINISTER:
Well I remain of the view that it was very credible intelligence, very. And that was the view that Mr Blair had and it's shared intelligence, I mean we're operating essentially, because of our close intelligence relationship, we're operating essentially off the same intelligence.
JOURNALIST:
Prime Minister are you concerned at all about the big rise in inflation revealed this morning?
PRIME MINISTER:
If I thought it was due to other than one-off factors I would be. But because it is plainly due to the increase in oil prices preceding the commencement of the war in Iraq and also the drought induced increase in food prices, I don't believe that it's anything other than a one-off series of factors at work.
JOURNALIST:
...paradoxically if you take those other factors out, are you concerned that underlying it is a faster slowing in the economy than you would prefer?
PRIME MINISTER:
No, I'm not concerned about that either. I don't think the economy is, for reasons of the drought and the uncertainty overseas, I don't think the economy is obviously as performing quite as strongly as it was a year ago, but it still is performing very strongly and all the signs are, and all our advice is, that we're still going to have very strong growth.
JOURNALIST:
... there are no signs to the weapons of mass destruction on the road to Baghdad, doesn't it make sense to bring in all the inspectors you can? Hans Blix's team is standing by. As a member of the transitional authority is Australia pushing for the UN inspectors to be brought back in virtually now?
PRIME MINISTER:
Look I think there is, at some point, a role and Alexander Downer has made this point but I think it's appropriate now that the inspection arrangements that the Americans in particular have put in place continue.
JOURNALIST:
Why not have the inspectors that already have the experience?
PRIME MINISTER:
Well because of what has gone before in relation to the conduct of the war and the fact that the United Nations was unable to address this issue.
JOURNALIST:
Mr Downer has said though that he'd like to see the UN inspectors back.
PRIME MINISTER:
Well that of itself is not a reason to do it.
JOURNALIST:
... reaction to the report of specific threats against Australians and Australian Government officials in Turkey as we approach Anzac Day?
PRIME MINISTER:
No, I don't have any specific reaction other than to draw people's attention to the travel advice that's been issued in relation to Turkey and specifically in that travel advice references to Gallipoli.
JOURNALIST:
Do you feel it's safe for the Treasurer to be there on Anzac Day?
PRIME MINISTER:
Yes. I mean he wouldn't be going otherwise.
JOURNALIST:
Prime Minister, you said prior to the outbreak of the conflict in Iraq, you told the Australian people that you would see the issue through. Does that include the period that Australia is part of the transitional authority?
PRIME MINISTER:
Look I have indicated I don't have anything to add, and I don't.
JOURNALIST:
Prime Minister, as chair of the Commonwealth are you concerned about reports from Commonwealth monitors and EU monitors in Nigeria that that election has been defrauded? And how would you feel about handing over the chairmanship to President Obasanjo if the election is under a cloud?
PRIME MINISTER:
Well it's not mine to hand over, it is a product of the historical fact that I chaired the last meeting, so we shouldn't elevate the importance of it, although it is important, but we have to keep it in perspective. I saw the Secretary General of the Commonwealth a short while ago, he's in Canberra and we actually talked about this very issue. There is a report coming through from the Commonwealth observer group. I will withhold comment on the conduct of the elections in Nigeria until I have seen that report. But except to say that the preliminary indications are that drawing comparisons between what happened in Nigeria and what happened in Zimbabwe would be not accurate and would be unfair to the process that has been carried out in Nigeria.
JOURNALIST:
Will you be sending President Obasanjo your congratulations?
PRIME MINISTER:
I always where appropriate congratulate fellow leaders, and can I say he has undertaken the remarkable transition from military rule to democracy and it's only the third election in Nigeria's history as an independent nation, so it's a pretty significant event.
JOURNALIST:
Did you discuss Zimbabwe with the Commonwealth Secretary-General?
PRIME MINISTER:
Yes, I did.
JOURNALIST:
Are there fresh moves on that issue?
PRIME MINISTER:
Well I think there's always a need to have a dialogue between the Secretary-General and other members of the Commonwealth, but I have made it very clear that there can't be any fudging in relation to Zimbabwe. I'm not suggesting there will be an attempt by the Secretary-General to fudge, but I just wanted to make it very clear that our position in relation to Zimbabwe remains completely the same. There has to be a genuine change there or Zimbabwe should remain outside the councils of the Commonwealth.
JOURNALIST:
If I could just ask this question. If Saddam Hussein had weapons of mass destruction, why didn't he use them to save his bacon, to save his regime?
PRIME MINISTER:
Well I can't answer that question. I mean, I don't think even the Iraqi Information Minister...
JOURNALIST:
Most of us feared that he would.
PRIME MINISTER:
... would have been able to successfully... I don't know, I can't... I mean Paul it is a very hypothetical question. The last person I would try and speak for is Saddam Hussein.
JOURNALIST:
Prime Minister, back on Gallipoli, would you advise the young Australians who go there on Anzac Day every year in droves, to go there this year for Anzac Day in the current circumstances?
PRIME MINISTER:
Look I'm not asking people not to go to Gallipoli. I'm trying to react responsibly in not doing that, but I am drawing their attention to the travel advice. I think that is the fair thing for me to do. You can't create a situation where the Prime Minister or somebody in a position of authority has got to make that kind of personal judgement on each and every excursion that people might make. I know this is an atypical matter, but clearly there has been a travel advice issued. I draw people's attention to that. I encourage people to read it. And that represents our view on the matter.
JOURNALIST:
Is that travel advice based on the sort of information we read in the papers today that Turkey is concerned that 35 more terrorists, Al Qaeda terrorists, have made their way into the area?
PRIME MINISTER:
Well it's based upon the best available information that has come to our security authorities.
JOURNALIST:
News to you?
PRIME MINISTER:
Well, there are a lot of things that are in the papers that come as news to me and some of them are right and some of them are wrong. That's the nature of life. But if there is any change coming to our security authorities, well obviously we'll say something more. And I keep in regular touch with ASIO and others, as does Mr Downer, and we are following this thing very closely. One more question, then we might go.
JOURNALIST:
Have you got any more information or any information about when there might be a declaration, when the war in Iraq is finished?
PRIME MINISTER:
No, I don't. But you mean in Iraq?
JOURNALIST:
Yes.
PRIME MINISTER:
No, I don't. Thank you.
[ends]