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FOR MEDIA 3 February 1984
The attached letter was telexed today to the Queensland
Premier, Mr. Bjelke-Petersen.
* The lion. J. Bjelke-Petersen MLA,
Premier oZ Queensland,
BRISBAN~ E * QLD 4000.
My dear Premier,
I refer to the Prime Minister's telex of 29 January,
suggesting an additional item in the terms of reference
for the general review by the Commonwealth Grants
Commission, and to my conversation with you and Mr. Leo
Hielscher. I confirm my view that the offer of $ 35 million per annum
will be a bonus for Queensland, because it is over an~ d
above the compensation that will be paid for the revenue
lost by Queensland and any additional costs. In my view,
this offer is extremely generous.
I am pleased that you have indicated your prepa-cedness to
accept the Commonwealth's suggestion of a special term of
reference being included in the forthcoming general review
by the Commonwealth Grants Commission.
I am, however, disappointed to note that your latest telex
does not reflect the conversation that I had with Mr. Leo
Hielscher relating to the offer referred to in paragraph 2
above. In the course of that conversation Mr. Hielscher
disputed the facts as outlined in paragraph 2 hereof and
assured me that this would be specifically referred to in
your foreshadowed reply. I am disappointed to note that tChe
lengthy reply does not refer to this specific matter and
purports to raise a number of other issues which were never
discussed. In an effort to speedily assist you I have had your
proposals further examined by my colleagues the Treasurer
and the Minister for Health. The Commonwealth is prepared
to accept the thrust of your proposal for this clause, with
one amendment. We suggest that the term of reference be as
follows: . The Commission should also indicate whether
Commonwealth payments under Medicare in respect
of the Queensland Public Hospital System disturb
the financial relativities that existed between
Queensland and the other States immediately prior
to the introduction of Medicare. Should the
Commission conclude that CommonwAealth payments
under Medicare will result in a disturbance to
Queensland's relativity, the Commission should / 2
2.
indicate the extent if the financial ad justment
t'-hat is necessary to restore Qaersland to its
previous position."
I appreciate Queensland's concern that any necessary
adjustments arising out of the special term of reference
should not take five or six years to implement. The
Commonwealth will consider the Grants Commission's report
on this matter, and reach a decision on it at the June 1985
Premiers' Conference.
With respect to the othe r proposals in your telex, the
Commonwealth cannot agree to these in the context of the signing
of the Agreement. These are matters that ought to be the
subject of consideration and negotiation in the light of the
Grants Commission report.
In the meantime, I do not believe that Queensland will be
adversely affected by the proposed arrangements. The
Queensland Government will suffer no net revenue loss or
additional cost under the Medicare arrangements, and will
receive as a bonus an addition to State revenue of $ 35 million.
This payment will ensure that Queensland receives slightly
more than Queenslanders will be paying through the Medicare
levy and associated measures.
I hope that we are now in a position q~ uickly to sign the
Agreement, which will allow the Medicare grants to apply
from 1 February 1984.
Yours sincerely,
( Lionel Bowen)