PM: Well today we have reached an historic agreement to deliver better health and better hospitals for the working families of Australia.
We have agreed to the biggest reforms to the health system since the introduction of Medicare.
This is a good day for working families. It's a good day for senior Australians, for pensioners and for carers. It's a good day for mums and dads and patients, and good day for doctors and nurses working hard in our health and hospital system across the country.
This agreement is a significant agreement - but now the real work begins.
From 1 July this year the National Health and Hospitals Network will start delivering the following:
* First - 1,300 new hospital beds;
* Two - an historic agreement to reshape mental health services and help 20,000 extra young people get access to mental health services;
* Three - over 6,000 new doctors;
* Four - an additional 2,500 aged care beds;
* Also, emergency department waiting times capped at four hours;
* Elective surgery delivered on time for 95 per cent of Australians;
* A Commonwealth takeover of primary care; and
* A Commonwealth takeover of aged care.
The Commonwealth and 7 states and territories covering about 90 per cent of the nation's population have agreed to the Commonwealth retaining one third of the GST and becoming the dominant funder of the nation's hospital system.
Premier Barnett and I have agreed that we will continue to discuss hospital funding arrangements with WA over the period ahead.
For the first time, the Australian Government will become the dominant funder of the entire system. We will retain a third of GST currently provided to States and Territories and direct it to Australia's health and hospital system. We will fund 60 per cent of building equipment, teaching, and training and services delivered across our 762 public hospitals; and we will be funding all GP and primary care services and all aged care services.
This, ladies and gentlemen, is a very, very big reform of the health and hospital system of Australia.
Today's agreement places the nation's finances on a more sustainable footing for the future - for our health and hospital system and for the Federation more broadly.
The Treasury has estimated that without change, state health spending would have consumed the entire revenue raised by state governments over the next three decades. This would place enormous pressure on the other areas of state responsibility like transport, schools, and law and order.
Our actions today mean that this is no longer the case. Our actions today help ensure the future of the Federation.
In order to fund more doctors, more nurses, more beds, and better emergency departments and elective surgery, it is crucial also that the Australian Government is able to undertake reforms to deliver savings. This includes the reforms to private health insurance that we proposed in the last Budget. These changes would for us save $2 billion over 4 years - and around $100 billion over the next 40 years. This is $100 billion which would be spent on doctors, more nurses, and more beds.
Currently, the Opposition are blocking those changes.
These reforms to private health insurance, and the funding they provide, will play a crucial role in funding these significant health reforms in the future.
I'd like to conclude by thanking my colleagues here - all the premiers and chief ministers. This has been a long negotiation and it's been a very tough negotiation, as we always said it would be, but we have worked well together and I would thank each and every one of them for the contribution they have made to this critical debate for the future of our health and hospital system.
The most important thing is that we have today reached an historic agreement to deliver better health and hospital services to working families, to pensioners and carers, right across the country - people who depend on us and our work here today.
I'd also like to thank the Federal Health Minister, Nicola Roxon, for the tireless work - the absolutely tireless work - that she has put in over the past few years, months, weeks and days with her state and territory counterparts to bring this agreement about. Without her this would not have been possible.
Most of all, though, I'd like to thank the hard-working doctors and nurses and allied health professionals right across the Australian health and hospital system. These, the good folk, the professional folk who have lent me their understanding, their time, their input, their ideas over the last nine months as I've sought to frame the Australian Government's response to the future reform of our health and hospital system.
This is a terrific group of Australians. They are out there working in the field in an area which means so much to the everyday lives of millions of Australians, and they are often doing so at present under huge pressure with inadequate resources, and I'd take this opportunity - and I'm sure my colleagues would endorse it - to salute their professions. They are fundamental to the wellbeing of Australians. Our job as governments is to make their job a little easier for the future.
Also, I would like to thank the patients - the people who actually depend on the health care system of Australia for spending time with me also over the last nine months or so. I have spoken, literally to hundreds and hundreds and hundreds from the smallest hospitals in rural communities to the largest hospitals in our biggest cities and so much of what they have said has been the same; so much of them crying out for two things: please, please, please fix our system for the future; please, please, please, get rid of the duplication, the waste in our system; and please, please, please fund our system for the long-term future to deliver us more hospital beds, more doctors, more nurses.
I would say to each of those folk, each of those very good folk, those suffering from cancer; those suffering from terrible diseases; those who have spent time with myself and my colleagues in recent months, that today we seek to respond to what you have been saying to us.
This is a very big reform.
I say to all those patients and their families who supported them in their time of need; those who are crying out for better hospitals - today your voices have been heard.
There is more work to be done - a whole lot more work to be done - but today, for the first time in a generation, the hard work of fundamental health and hospital reform has begun.
Now, if I could ask Kristina, the Premier of New South Wales, as chairman of CAF, to speak on behalf of the states and territories, and given the significance of today's agreement, to then turn to my colleagues each to contribute as well.
Kristina.
KENEALLY: Thank you Prime Minister.
Well, as the chair of the Council of the Australian Federation, I'd like to begin by thanking all of my state and territory counterparts. We have worked hard, we have worked well and we have worked together to achieve this historic agreement, and in doing so, Prime Minister, I'd also like to thank you, the Health Minister, Nicola Roxon, and the team here at the COAG negotiations. From you we received a good and a fair hearing to our views and our concerns, and that has enabled us to achieve the historic agreement that we've reached today.
Now, it is historic, and it is important, but what is most important in what we've achieved today is better health outcomes for the people we represent: better access to elective surgery; to emergency department care; to aged care; to mental health - this is significant for the families who live in our respective states and territories, and that's why we worked so hard to achieve this agreement today.
It's also significant in terms of the funding that it delivers for each of our jurisdictions. It is significant because the Commonwealth has put its hand up for the future growth in our system, providing a sustainable way forward for our health system to continue to deliver the excellent care it does today, to improve upon that and to make it stronger into the future, and for that, Prime Minister, we do thank you.
Now, as a Council, we pushed strongly for many changes and some of those changes occurred along the way to COAG, including the inclusion of block funding, changes to local hospital networks, which I think all of us will agree have improved the outcomes that we achieved today.
But we also had our debates along the way, and those debates have been constructive. They have been respectful, and they have been able to help us achieve the right change for the Australian health system.
Now, as the chair of the CAF - and it is a role that I enjoyed greatly - but as the chair of the CAF I also enjoyed the support of this Council, and in particular to negotiate in good faith to achieve the best possible result for our national health reform here at the COAG meeting. In particular, the CAF has been identifying the desire to have state-based funds, to have guaranteed funding beyond 2014 and to see more money come into the system in the first four years. We also sought to ensure that we protected our GST from future clawback.
Can I say that it was the joint effort of the CAF that has enabled us to work so constructively with the Commonwealth. It was the Prime Minister's willingness to listen to our concerns and to respond constructively that has enabled us to reach this agreement, in particular to reach significant injection of money in the first four years.
If I can put on my hat as the Premier of New South Wales for one moment, I reflect for the State of New South Wales this represents $1.2 billion in the first four years, combined with the guarantee of funding after 2014 of $4.9 billion, a total of $6.1billion for the next 10 years for New South Wales. That is an injection of funds that simply would not have been possible for us had we not been able to reach this agreement, and I'm certain each other leader will speak to the benefits to their State.
As the chair of the CAF, my colleagues here have asked me to note this, and Prime Minister you might not be aware of this, what sealed the deal for us was your commitment this morning to an additional $800 million for additional beds. As a CAF we identified that as a crucial injection of money that was required for us and as you and I were able to seal that deal this morning, my colleagues around the table were incredibly pleased and we thank you for that. We thank you for the work that you have done with us over the last two days.
It is historic. This is real change. This will make a real difference to the people of Australia. It will take time to achieve this change, and we will all be working hard together.
For New South Wales, we came here and we got what we wanted for the people of New South Wales. We are able to say to the people of New South Wales that we met our commitment to them to deliver better health care now, to ensure that it continues into the future, and to work in partnership with the Commonwealth as we grow a sustainable health system.
Thank you, Prime Minister. Thank you to my colleagues around the table.
It has been a very fruitful few days and a very good few weeks as we negotiated the outcomes that we achieved.
PM: Thank you very much, Kristina. John, I might turn to you as Premier of Victoria.
BRUMBY: Thanks, Kevin.
Well, I think we achieved today, obviously, a great outcome, I think, for Australia. I am delighted with the outcome for Victoria. I think it's a great step forward, and there was a number of times this afternoon in the COAG meetings when the Prime Minister referred to this agreement today as one that puts patients first, and it is an agreement, I think, which puts patients first, and we all came to this meeting over the last two days with, I guess, a range of views and what had been publically a pretty vigorous debate, and I've said and I know the Prime Minister said that in relation to health this is the biggest debate we've had about health care since the establishment of Medicare in the 1970s, but I guess it's instructive to think back to that period, because if you think of the creation of Medicare, Medibank, in that period, it was a Commonwealth creation. What's been created today is a genuine partnership between the Commonwealth Government and the states, and it's a sign, I think, of the Prime Minister's commitment to the Federation, to cooperative federalism, that we've been able to reach agreement today on what is a series of landmark reforms that put patients first and provide real reform, systemic reform, to our health system.
In terms of the outcomes, I believe this is a package which guarantees real reform. So across Australia now you'll see a move to local health networks; you'll see a move to activity-based funding; and you're also going to see much more transparency across the system in terms of the information and the indicators that are available about the performance of the Victorian and Australian health systems.
Secondly, I think the big achievement of this arrangement today, this agreement today, is that there's more money now, and as Kristina has said, I think all of us, representing our own jurisdictions and through the Council of the Federation, have argued that what we needed across Australia, was more money now; not a commitment about more money in 2013, 14 or beyond but we needed more money now. And I think the commitments which the Prime Minister has given in that regard will provide significant and dramatic improvements to our health system across Victoria and across Australia, and in Victoria's case by the way over the next four years all of the initiatives which have been agreed today add something like $890 million dollars to our health budget over the next four years or to put it in percentage terms, it lifts the direct real Commonwealth contribution in our state from 41 per cent to just over 44 per cent in that three year period. And, as you know I've been campaigning hard for an increased Commonwealth commitment and a 1 per cent increase per annum is a very, very significant increase indeed.
The third thing I'd say about this agreement is that it provides a great outcome for patients. In our state we are going to see something like 332 extra beds. Beds are expensive; they are always difficult for state governments to provide. The support provided today by the Prime Minister as part of this agreement as we discussed it this afternoon will make a huge difference to the numbers of patients that we can treat across our state, and in terms of elective surgery in our state of Victoria, the reforms that we've agreed today will ensure that there are 33,900 additional elective surgery treatments over the next four years. That's 33,900 Victorians whose lives will be immeasurably improved.
Could I say the fourth thing about the arrangements today; streamlined administration. Again - many of us were concerned that these reforms might produce a new bureaucracy in Canberra. We've all been concerned to ensure that that's not the case and I think if you look at the model that's been agreed today - the administration model, the use of the health fund into which the commonwealth money and the state money is paid and then paid through with the state as a system manager through to the local health networks - this is a clean streamlined administratively simple way to provide the funds and I would certainly say, a significant improvement on where we were a few weeks ago.
And finally can I just say from Victoria's point of view we are delighted too that the communiqué today looks forward to the development of a national cancer plan which the Commonwealth and Victoria will co-lead on, on the development of that plan and this is such an important area for Victorians and Australians. We are delighted to work with the Commonwealth to develop this plan nationally.
So I think it is a great step forward; it does put patients first; it does provide real reform; it will see more patients treated; it does get more money in the system now and it does this in a way which is a genuine partnership with the states - a real partnership of the Federation which significantly improves our national health system.
PM: Thanks very much John. Anna, over to you.
BLIGH: Thank you Prime Minister.
There's been a lot of hard work done in the last two days and our efforts have been directed at securing better health care now but I think even more significantly those efforts have been directed at better healthcare and better health system in ten years time and the decades beyond.
The significance of these arrangements I think cannot be underestimated.
The agreement that we will be signing up to today is a seismic shift in Commonwealth-State relations in the delivery of health care for Australians.
The Prime Minister started this process by announcing a reform package in which the Commonwealth Government, that is the level of Government that has the largest revenue raising power in the Federation, would for the first time in the history of the Federation take responsibility for growth. So this reform package for a growth state like Queensland was a no brainer. When the Commonwealth Government said they would accept responsibility for growth, we thought "these reforms are good for Queensland."
However, we wanted to see a lot more work done on the detail and there's been a lot of work done over the last six weeks to secure a set of arrangements that will work much better in a state like ours and in other parts of Australia.
I came to Canberra wanting to see more funds into the system sooner than originally proposed. For Queensland, what we will see now is a $4 billion dollar package over the next ten years that will deliver better emergency departments, faster elective surgery, more beds, new services in mental health and more aged care beds. That is a package that will make a real difference in the lives of Queenslanders and Queensland families.
I would like to thank the Prime Minister for his efforts. I'd like to particularly thank him for the very personal and hands-on approach he has taken to these reforms. I think there's no doubt that the many hours he has spent in the hospitals that are operated by the states of Australia has given him a much better sense of the real pressures on those services. The time he has spent talking to doctors and nurses and patients has given him a personal grasp of the issue that I'm not sure other senior representatives of federal governments have had in the past. So I too want to thank the doctors and nurses who made it their business to make sure the Prime Minister came to the table yesterday with a real idea of the pressures that states are under, because I think that did motivate some of his willingness to increase the package and understand the parts of the system that are under pressure.
And finally on behalf of Queensland, I'd like to thank Kristina Keneally for the work she's done as the Chair of CAF. Kristina started her premiership, I think on the third day of her premiership, she found herself chairing a Council of Australian Governments, her second COAG she's found herself leading some of the most difficult negotiations between state and commonwealth governments that we'd seen probably in a decade. She's done an outstanding job. The work she did in the very small hours of this morning to clinch the deal on extra beds was particularly outstanding, and Kristina, Queensland's very grateful - thank you.
PM: Thanks very much Anna, and Colin?
BARNETT: Well thank you Prime Minister.
Well not wishing to rain on the parade but Western Australia will not be signing the agreement as it stands.
Can I say the important part of what has been discussed - that is the health component - matters to do with elective surgery, emergency departments, extra beds and the like, I do support.
And I acknowledge - I readily acknowledge that the Commonwealth has been generous and has listened to the states over recent weeks over what is needed. So I support that part of it.
Second is the governance arrangements. While they are not ideal from a West Australian perspective, we could work within those.
The third aspect of the Commonwealth essentially taking one third of the total GST pool is not acceptable to me and it is not acceptable to Western Australia. The GST is just ten years old. When it was introduced, it was introduced as a substitute for other state taxes that had been either foregone or transferred to the Commonwealth over the years. It was, as it was presented then as the long term growth tax and solution to state finances. I am not about to compromise the integrity or the importance of the GST to my state of Western Australia.
However, as I made clear at the conclusion of the COAG meeting and on several occasions to the Prime Minister and Treasurer and the Minister for Health, Western Australia is prepared to pay an equivalent amount of money into a fund.
So in other words, the outcome would be exactly the same but we would not agree to the Commonwealth taking in a pre-empt way one third of the GST. So the outcome can be the same. And if over the coming weeks the Commonwealth agrees that Western Australia continues to receive its GST and that we will then pay an equivalent amount as agreed between our respective treasuries into the joint fund, then we will prepared to sign the agreement.
PM: Thanks very much Colin.
As I said in my remarks before, we look forward to continuing those discussions with WA in the weeks and months ahead, given that these payments that we've outlined begin to flow from 1 July.
Mike Rann, the Premier of South Australia.
RANN: Thanks very much, Prime Minister.
Well, first of all just want to say that for many years, including the eight years I've been going to COAG meetings, Premiers and Chief Ministers have been calling for a greater commitment to health funding from the Commonwealth Government, not only for now, but also funding for growth in the future, because we know, everyone here knows, that our budgets will be consumed totally by health funding unless we get a real partnership with the Commonwealth, so I want to congratulate the Prime Minister, I want to congratulate Kristina Keneally, the Chair of CAF, for the agreement that has been reached.
South Australia and most importantly Australian patients, South Australian patients are much better off in terms of the outcomes of this conference and obviously what we've got is not only a commitment for the future, but we've got extra funding now, not later; we've got a commitment to fund growth for the future; we've got extra money for emergency departments; for elective surgery; for aged care; for primary health care and very importantly, extra money now for mental health. I'm really pleased that mental health is now on the agenda nationally.
I think that Kristina's work in securing a doubling of the amount of money, $800 million, for sub-acute beds was extremely helpful to all of us in getting a breakthrough, so I want to congratulate everyone for the constructive nature in which this conference and this COAG has been conducted, but the most important thing is we're getting money now, not just later, and I think that means that we can move forward with confidence.
PM: Thanks Mike. Jon.
STANHOPE: Thanks Prime Minister.
Prime Minister, I concur in the comments of my colleagues and I most particularly extend to you too my congratulations on achieving this historic outcome today.
It is an historic agreement, it's a sea change most particularly in the form and declared level of Commonwealth commitment; a genuine partnership to the delivery of health services for people of Australia and I think that is its most significant aspect and goes to the heart of why it is quite truly and genuinely an historic agreement.
It's the first time ever that the Commonwealth has set and committed to a realistic growth factor in relation to the cost of health care and a determination to work with the states to meet the growth in demand that all health services around Australia meet and as Mike Rann has just said a growth in demand and expensive investment which really is causing each of the states and territories to groan in the context of their capacity to meet all of their other responsibilities.
I'll just say without labouring the point too far, we've made the point, acknowledged the historic nature of the agreement, how significant it is, my colleagues have given some details of the various elements and sous-elements of the significance of the fund, but for my constituents here in the ACT, this agreement represents for us an additional $81 million in the next 4 years, very significant, and over the term of the agreement by 2020 represents an annual increase in funding for the ACT of $150 million a year - a level of investment or boost or guaranteed funding for the ACT, that in the terms of just the dollars is historic in itself.
So congratulations Prime Minister for your leadership, for your sensitivity to the particular issues of all jurisdictions and each of us has issues that are peculiar to our circumstance and I'm particularly grateful for the way you've responded to those issues that are specific to us.
I thank you and each of my colleagues and Kristina Keneally for her leadership of the states and territories through the negotiations.
PM: Thanks very much Jon, and lastly Paul from our friends in the Territory.
HENDERSON: Thank you Prime Minister and again, this agreement that we've reached today really does put patients ahead of politics and certainly in the Northern Territory, I came to this COAG meeting saying. And after a number of discussions with the Prime Minister, a 'one size fits all' approach is not going to suit the Northern Territory given the unique nature of our indigenous health disadvantage in the Northern Territory.
Indigenous people make up 33 percent of our population, but 70 percent of our hospital admissions and I'm really pleased that the Prime Minister has taken into account that disadvantage through the National Pricing Authority that will be setting the efficient price for procedures in our hospitals and certainly that's a guarantee that I sought and a guarantee that the Prime Minister has been able to give.
Importantly for the Territory, another massive reform is a significant increase in the number of GP training places for the Northern Territory. We have the lowest per capita ratio of GPs in the country and this reform and commitment achieved in this agreement along with Prime Minister, your commitment for the clinical training school between Charles Darwin University and Flinders University, will see 40 GPs a year trained in the Northern Territory for the first time in our history. A very significant reform, long overdue reform and reform supported and created by the Prime Minister and his government.
350 additional Territorians a year will receive elective surgery and again, that is very much putting patients before politics. So I'm pleased with the agreement today and it really does build on the transformation of our health system in the Northern Territory and improving hospital and patient care for Territorians.
PM: Thanks very much, and ladies and gentlemen of the press, over to you, Phil.
JOURNALIST: With the unresolved issue with Western Australia, Mr Barnett you might like to respond, does Western Australia get the add-ons that were contingent on the GST component that the other states have got, and Mr Barnett said something about a guarantee about keeping his GST. Is there potential for you to appropriate that yourself and put it into the pool like you're doing with the other states? What has to be resolved?
PM: Firstly, we're pretty confident we can work something through with our friends in the West. It might take a bit of time, a bit of an arm wrestle, a few things over there in Perth. We'll see how we go. We're very committed to making sure that we can deliver better health and better hospital services in the West as well.
On the second point you raised in terms of Commonwealth powers, we've preferred to do these things on a cooperative basis and that remains my preference and that is the attitude I'd bring to bear in continued discussions with the WA government.
Matthew.
JOURNALIST: Mr Rudd, you stressed all along the importance of getting changes in the arrangements to avoid wastage that you believe is in the current bureaucracies. But in making money available now in response to the requests of the Premiers, how are you going to make sure that the money that starts flowing from July 1 doesn't go into the big black hole that you were worried about? What are the arrangements that prevent waste?
PM: Two answers to that question. The first is this - payments which will flow from the 1st of July this year through until, let's call it the transition period leading up to the commencement of the long term funding arrangements between the Commonwealth and the States, will be underpinned by agreements between us which will have clear targets for delivery. This is very clear, these have been negotiated with officials. A mention was made before, for example, of something in the vicinity of 1,300 new hospital beds - they'll be distributed by jurisdiction, they'll be measured according to their delivery. That applies to each of the specific areas of, let's call it additional investment over the coming three to four year period.
Second answer to your question is this - what is the underlying reform for the future? What we tried to do is to provide additional growth now to prepare the system for a sustainable funding base long term. The gaps in accident and emergency, the gaps in elective surgery, the gaps in acute care beds and frankly the gaps in our current workforce, doctors in particular, but also nurses, they need to be dealt with in the here and now otherwise what you're planning by way of reform starting in '14-15 will frankly just start too far behind the 8 ball.
But once those reforms kick in, and some of my colleagues have mentioned this before, the introduction of activity based funding, the use of the Independent Pricing Authority, the funding relationship with local hospital networks - these are deep structural reforms in the health care system, the hospital system of Australia, which will drive long term efficiencies.
So in summary, what are we trying to do? Frankly, enhance the capacity of the system now to deal with these huge demand pressures which people fronting up to A&Es right now and not being able to get in on time and secondly, allowing enough time also to prepare for these long-term structural reforms which will drive efficiency in the long term. Andrew.
JOURNALIST: (inaudible) as to the status of this agreement, my understanding was that you needed unanimity, now if Mr, the WA Premier Mr Barnett does not go with this agreement and sign up by July 1, does the agreement die and does it also mean that WA will not get any of the benefits from the agreement and can you please quantify those benefits.
PM: Well firstly I'm confident that we'll get there by one means or another because I'm dead determined that the good folk in Western Australia benefit from these investments in their health and hospital system and the reforms which will flow from then on as well.
Secondly, as far as the agreement is concerned this morning, you've heard me speak in the past about what we would do if we achieved no agreement here. Well, as of this morning we had about 33 percent of the country on board for this agreement, as of now, we've got 90 percent of the country on board for this agreement. That's not a bad agreement, and therefore we propose to get on with it.
As far as the remaining 10 percent of the country's population is concerned, which is Western Australia, we'll work our way through those challenges. And as I've said, we'll be having discussions in the month or two ahead. I was not prepared, I don't believe my colleagues were either however, to place the rest of the rollout of this into abeyance while we simply resolve the outstanding concerns of one state and I think that's the best way to go.
You talk about 1 July - I would say that our approach is one of confidence that we'll get there and under those circumstances we do not see the need for a referendum. We have 90 percent of the country on board for this, we have the largest states in the country on board for this, we have some of the smallest states in the country on board for this - it's time to get cracking. I respect the positions put forward by my friend Colin Barnett and I think we can work our way through them, it's time to get going.
Michelle.
JOURNALIST: Mr Brumby, you've been saying for weeks now, day in, day out, that the Victorian system needed another billion-plus a year. You're now happy and talking in very positive terms about $900 million over four years. Can you explain that discrepancy, and also why did you concede on the GST?
BRUMBY: Thanks, Michelle. Two things, firstly on the funding - it's correct if you look at our document, 'Putting Patients First', my objective was always to move the Commonwealth back to a position where it was an equal funding partner with the states. And in our state at the moment the Commonwealth's on about 41, we're on about 59. My objective was to get that to 50-50. The cost of doing that would be $1.2 billion in one year if you did it all at once.
What we achieved today and over the last two days, I think, was a significant shift and move in that direction, as I indicated before. You go back three weeks ago, there was basically nothing on the table in terms of significant new funding up to 2013-14. What the Prime Minister has put on the table in the last week for Victoria totals $890 million of additional funding which, as I said before, if you want to put it in percentage terms, would lift the Commonwealth's contribution, their net, real contribution, from around 41 to a bit over 44 percent. So I think that is a significant move, and if you look at the history of these things in Commonwealth contributions, it's a very sharp increase indeed.
In terms of the GST, my position on that was well known, but again I came to the meeting today determined to try and get an outcome for our state and for the people of Australia, and I think there were probably four significant concessions, if I can put it that way, that the Prime Minister has made that led me to the decision that I made.
The first is that under the new arrangements today, the state will be the system manager. That was really important to us in terms of the health system. It's a very big health system in Victoria, its $10 billion a year. You need a single manager and the state is the system manager and that's part of the agreement today.
The second is the new funding arrangements as part of the new Health and Hospitals Fund, into which there's now transparent payment from the Commonwealth, from the State and through that, the payments to the health networks are made, rather than directly as was proposed previously, to those health networks.
Thirdly as I've said, there's more money now and for I think all of the premiers that was a significant and particularly for me. And I think, finally, Michelle, there was the guarantee that the PM put on the table yesterday which was in relation to the post'13-'14, the issue of the $15.6 billion, we wanted a guarantee that that $15.6 would be on the table and paid to the states in whatever circumstances occurred, whatever health cost inflation was, whatever the GST was, in that period, and yesterday the Prime Minister provided that guarantee, which for our state is worth $3.8 billion.
So, if you put all of that together I think this was a very significant movement indeed by the Federal Government. I think we all came to this looking to get an agreement. It is true that I have moved my position a significant way, but I think it is fair to say that the Federal Government, the Prime Minister, has also shifted and I think that's the art of good leadership. Strong leadership is to be able to lead those discussions, lead those negotiations and get the right outcome for Australia. So we all gave a bit of ground and we've all got a great outcome.
JOURNALIST: Prime Minister, you've been saying all along it's been necessary to cut out the duplication, the extra bureaucracy. From what Mr Brumby is saying, it seems that the Federal Government is going to be, the money will go to the states, then to the local area boards. How is this not the same old system of state-governed bureaucracy in the health system?
PM: This actually is a fundamental change, and let me explain how. These monies from the GST which we will retain will go to a National Hospitals Fund. This is a Commonwealth entity. Then at that point, we the Commonwealth will allocate those funds to the instrumentality to be established by conjoint Commonwealth and state legislation at the state level in each state. That is a payment authority.
What is new, and I would actually commend your attention to this once the document is circulated and people have had an opportunity to read it, is in fact the states are also, for the first time, committing to deliver their funds through that same funding authority. In other words, as many reformers have been calling upon for some time, you therefore have a common fund being delivered through to the local hospital networks. This is a significant and fundamental reform. I would draw it to your attention.
These funding authorities are simply that - payment authorities, but it's important that in response to the discipline set in the system by the independent pricing authority and the operation of activity-based funding, that the money flows in that sequence. We think the structure is in fact better, Dennis, because as the Premier of Victoria just said before, it is delivered through a common fund at the end of the day through to the LHNs.
The key here is to ensure that local hospital networks are empowered and paid direct in order to ensure that they are remunerated for the physical services they deliver. That is the organising principle, if you like, of activity-based funding - but that's what's new here and I think it's a really good change.
JOURNALIST: Are you sure that you can make the changes you're describing to the GST agreement if you don't get the agreement of all of the states, including Premier Barnett?
PM: We're confident, based on our advice, that there is no particular difficulty on that score, but we'll work our way through the detail. As I said, I'm confident we'll find some landing place with our friends in the West. I go back to the overarching point - this is a big country. There are vast differences across it. We've got agreement here from seven of the eight governments of Australia, five states, two territories, representing 90 percent of the country's population. It's time to get on with it, and while being respectful of our colleagues in the West, we'll work out those challenges in the period ahead.
Over in the front.
JOURNALIST: Prime Minister, as the dominant funder, are now to blame if people wait longer than four hours for an emergency department or can't get on a waiting list for surgery or have an ambulance turned away from hospital?
PM: First responsibility is this, and I've been asked this many times and it's entirely the right question - my responsibility is to ensure now, as the dominant funder of the public hospital system, the exclusive funder of the primary care system, the exclusive funder of the aged care system, is the buck stops with me.
On the delivery of the health care system, that will lie in the hands, very much, of the local hospital networks. That is as it needs to be. That's why we've set up the system this way. We regard that as the right balance for the future.
JOURNALIST: (inaudible) or mismanage it as happens from time to time?
PM: Well we need to, if you look at the millions and millions and millions of services provided each year through out health and hospital system, overwhelmingly first-class services, then the overall challenge that I've been presented with as the Prime Minister is, we have a problem both of structure and of investment. What we have dealt with in these reforms is a combination of structural reform and further investment. We believe we've got that, in balance, right as well.
You've got to make sure that your structure, for example, you mentioned the example of accident and emergency before - got to make sure you've got enough primary care services in the area to take some of the pressure off accident and emergency. You've got to make sure you've got enough sub-acute beds in the system so that there's enough room for people to come into the hospital if they have to be admitted. You've got to make sure that those beds are not being clogged by people in aged care.
This is an integrated reform, structural reform, pricing reform through the independent pricing authority and comprehensive national activity-based funding for the first time in the country's history, as well as additional investment.
JOURNALIST: (inaudible) cost is to the Commonwealth over the forward estimates, and how will you pay for it, and are we to understand that the structure now will be a Commonwealth health bureaucracy, that there'll be a National Hospital Fund, there'll be a payment authority, there'll be a state bureaucracy and that there'll be a local hospital network - that's five layers of bureaucracy, isn't it?
PM: That's quite incorrect, and you've characterised it in your own manner. You know as well as I do what those instrumentalities are intended to do, one of which you've just already referred to already exists.
Secondly, can I say that in terms of the reconciliation of the investment and the means by which we will fund that investment you will see all that detailed, of course, in the upcoming budget, and it will be very clear. We've reached very good agreements with the states and territories today.
I go again to the fundamental point - here we have, for the first time, the Australian Government as the exclusive funder of the aged care system, the exclusive funder of the primary health care system of Australia, and for the first time in our country's history, the dominant funder of the acute hospital system. That's what drives reform here.
Remember, I first entered this debate by saying there was excessive cost shift, blame shift, between the various arms of the health care system. Who suffers from that? Long-suffering patients, as well as the Australian taxpayer, by paying too much for services being given.
That's the reform. Given life by the operation of activity based funding, given life also by the operation of Independent Pricing Authority - these are technical bodies to a technical function, the delivery line is actually first class and for the reasons I explained before, to Dennis in response to his question, and the person up the back.
JOURNALIST: Mr Barnett, are you as confident as the Prime Minister is that you can come up with an agreement despite those outstanding issues and come up with something even though today the Prime Minister hasn't budged on that GST issues.
BARNETT: I'm sure if the Prime Minister agrees with what I propose we'll reach agreement. Simple as that.
JOURNALIST: (inaudible) discussion on the funding aspects of it at the COAG meeting this afternoon?
BARNETT: Well I always thought the two major issues, certainly to Western Australia were the structure of the arrangement in terms of funding and responsibility and the GST issue. Now the reality is we had very little discussion on that. I guess there had been agreement reached with the other states. The Prime Minister from the outset knew my position, I explained that to him several weeks ago, so I guess that was a point we were not going to agree on today.
JOURNALIST: Would you have preferred more discussion at the joint meeting this afternoon? How much discussion did you have?
BARNETT: I would have preferred more discussion on the way in which the administration of these monies will work, but as I said before, we believe we could work within that structure.
JOURNALIST: Mr Rudd, can you tell us how much money was put on the table?
PM: The aggregate across the forward estimates is around about $5 billion and that is to fund the services that we've just described. That aggregates all the investments by the way, that we've announced in recent weeks which go to categories of elective surgery, which go to the categories of accident and emergency, also sub-acute services, as well as a range of others which go to the states bottom line. That also includes Commonwealth (inaudible) purpose outlays which go to other arms of the health care system. I include for example, the funding that we announced, probably about three weeks ago now, for an additional six and a half thousand medical training places for the future as well.
So can I say for us, unless you are investing in the health workforce for the future, you're actually not being serious about this. How many places have I been around the country, and how many stories have I heard from my colleagues in the states and territories about health services which are there, they have equipment and they don't have staff. And particularly in rural and regional Australia, they can't find the staff, and this is a huge problem. That is why we had to make such a significant upfront investment in terms of the health workforce. Can I just call someone who's not asked a question please. Yeah, in the front.
JOURNALIST: If Mr Barnett doesn't agree by July 1 can you clarify exactly what happens then
PM: I'm confident we'll get there, we'll work our way through it. I'm confident we'll get there. Thanks very much.
JOURNALIST: Mr Barnett, could you answer the question. What happens if you don't sign on July 1?
BARNETT: Well, Western Australia currently funds 63 percent of our public hospital system. We would continue to operate it and I don't believe in any scenario that you would see the Commonwealth discriminate against sick people or elderly people in Western Australia - I don't think that's the nature of the Prime Minister or the Commonwealth.
JOURNALIST: Premier Keneally, you've got tens of thousands of health workers out there who are now waiting to be redeployed into the local hospital networks. How many will there be and when will they see this change?
KENEALLY: Well, as I've indicated, this is a change that will take some time to achieve and we will be working with the Commonwealth to do that. When it comes to local hospital networks, the states and territories will establish for themselves the boundaries and the appropriate sizes for what meets each of their jurisdictions' needs. We will do that through a process of consultation with the clinicians, with those who use our hospital system. That's how we shaped our response to the Commonwealth's proposal through consultation with those who work in our system and we would propose to do the same in establishing the LHNs.
JOURNALIST: Premier Keneally, now, how many extra beds will New South Wales get?
KENEALLY: Well, thank you - are you happy for me to interrupt? Ok - I defer to the Prime Minister in his press conference. Thank you for the question. When it comes to beds, New South Wales will be receiving a significant amount of funding and if you give me a moment I'll be able to give you the exact figure. But what I can say is this - the funding that's been provided for beds, we received an additional $266 million today, previously the Prime Minister had put on the table $268 million over the 4 year period. I won't at this point put a number on the number of beds because we have the flexibility within the agreement that was reached today to design the outcome that best suits our jurisdictions' needs so it is quite likely there will be a mixture of acute beds, sub-acute beds, possibly some mental health beds within that, possibly some beds for our medical assessment units in emergency departments.
What this represents though from the Prime Minister is a significant investment in the first four years in our health system that will make a significant difference to those patients whether they need to be seen within our emergency departments, within the new four hour target or whether they are seeking elective surgery - this is a significant investment from the Prime Minister and it's one that we in New South Wales welcome.
JOURNALIST: Isn't your understanding -
PM: Malcolm, just to add to Premier Keneally's answer, what we've funded is 1,300 additional beds which have been funded at the sub-acute bed level. These have very specific funding formulas attached to them. There is flexibility in terms of the application of those beds to different categories of beds like those for mental health and those for psychiatric services, so there may be some variation to some extent against a precise split across that 1,300 by the normal state distributional formula.
So that's the aggregate figure, that's how it's been priced. The reason we've done it on the sub-acute basis is that we the Commonwealth would like to see a huge enhancement of sub-acute beds, why? Because they are currently not sufficiently available in the hospital system, therefore acute beds are being occupied by folk who frankly don't need them, but there's nowhere for them to go, that's why these are needed. That's why we're doing that investment. Up behind there.
JOURNALIST: Premier Barnett, are you seeking a separate deal with the Prime Minister on this, and Prime Minister, if that's the case, is that really fair to the other states, specifically to Victoria which also wanted to protect its GST?
BARNETT: Well we are, I guess seeking a separate arrangement on the GST part of this overall package and as I said before, we could accept and support the rest of the package, that is one matter that we can't. And if I can just add to that, one of the reasons, not the sole reason, but one of the reasons, is that following the recent Commonwealth grants commission allocation of money, Western Australia only 68 cents back in the dollar. The big states of New South Wales, Victoria and Queensland all get in excess of 90 cents. If you take away one third of the total GST pool and Western Australia's share of that, Western Australians would be getting back about 32 cents in the dollar. That would simply be unacceptable to me and to the Western Australian public.
JOURNALIST: Can you follow up there?
PM: Just on what Colin had to say about the Commonwealth Grants Commission. This operates in different ways for different states in different years. I've been around this business for about 20 years at some stages representing the great state of Queensland, other times looking at it from Canberra and it is always a complex and controversial formula. I note, I don't wish to inject any partisan reflection here at all, but Treasurer Buswell of Western Australia just prior to the CGC producing its report, said that it should be adopted lock, stock and barrel across the country.
Now obviously WA has copped a significant hit as a result of the CGC determination, some other jurisdictions have been affected as well. This is something the Treasurer continues to work through with those individual states, as you would expect.
JOURNALIST: Is it your understanding, sir, that if you don't reach agreement with the Prime Minister, is it just West Australia that stands to be isolated, or is the deal off for the rest of the states as well?
BARNETT: I would think you need every state and territory sign up to have a complete deal.
JOURNALIST: Prime Minister, when you unpack the GST a bit over half of it came from the- when you unpack the GST a bit over half of it came from the abolition of the wholesale sales tax, so by my back of the envelope you've got about 20 percent you might want to play with. Are you going to hypothecate that for other areas of Commonwealth priority?
PM: Nice try George. Can I say on this auspicious occasion: no. If you like at the driver of what is sending a torpedo amid ships to the budgets of the states and territories, it's health costs. If you don't touch this, you don't reform it or do anything about it, you are consigning the states to their financial death warrant over the next 20 to 30 years. It is as clear as night follows day. Absent reform, the states as far as their own revenue sources are concerned will only be able to fund health, and health alone by about 25 years' time.
That is why we are acting now, for two reasons: one to deal with the reform and the proper long-term funding of the health and hospital system which Commissioner Bennett described recently as at a tipping point. The second reason is to deal with this fundamental structural flaw in the federation, and if you don't deal with that then frankly you are kissing the states goodbye, long term. I am actually committed to the Federation, I believe in a Federation and this is part and parcel of making sure the Federation works.
But to conclude where we began, this is about long suffering patients, families, trying to get a better health and hospital system for the future. We have, as governments, worked long and hard on this. This may be regarded by some as a plan to be criticised, that's fine, it should be the subject of all sorts of debate, and that's going to happen. But you know something? This is a huge reform for the nation and we, as the governments of Australia - Commonwealth, State and Territory - have put in a huge effort to try and deliver this reform for working families, pensioners and carers, and deliver a better health and hospital service for them.
They have been waiting long and hard for this - nearly 30 years since the last fundamental reform in our health and hospital system. This one's been a long time coming. No further time for delay, it's time to get on with it.
And thanks very much for your attention.