Prime Minister Tony Abbott has called for a mature debate on the future of health system funding after a federal government discussion paper flagged handing responsibility for public hospitals to the states.
The option contained in a leaked document on Federation reform, held by the prime minister’s office, has been slammed by state premiers.
It comes after other options to change school funding were leaked and then swiftly ruled out by the federal government on Monday.
Mr Abbott said officials in state and federal government departments had for months been discussing ideas for reform and many things would be considered and rejected during this process.
The discussion paper canvasses five options for health reform, which can be combined, including:
* making states and territories fully responsible for funding and running of public hospitals
* keeping current funding levels but using Commonwealth funds for Medicare-style bulk-billing in public hospitals
* Commonwealth, states and territories jointly funding individual care packages for chronically-ill patients
* Commonwealth, states and territories sharing responsibility through regional agencies purchasing health services for their catchment
* Commonwealth funding health services and states, territories and private sector competing for contracts
Queensland Premier Annastacia Palaszczuk said handing sole funding responsibility to the states was simply not on.
Victorian Premier Daniel Andrews said any move to strip more federal money out of the state health system would be fought hard at the meeting of leaders in July.
“Tony Abbott said no cuts to health before the election and now he wants patients, and it would seem state governments, to pay for his lie,” he said.
His South Australian counterpart Jay Weatherill said he was open to discussions about funding arrangements.
But while state and federal ties could be loosened when it comes to education, hospital funding required deep cooperation because of the way the health system was “intermeshed”.
“I’d be worried about any funding arrangement that meant the Commonwealth could essentially wipe its hands of what they regard as state responsibilities in the public health care system,” he said
“There is no model of us just keeping out of each other’s way and doing our own thing, it requires a co-operation.”
Health Minister Sussan Ley said the reports did not reflect government policy and she was committed to working with the states and territories.
Labor senator Doug Cameron said the proposal showed “extremists” were in control of the prime minister’s office.
Labor frontbencher Mark Butler said Mr Abbott was “shaping up for the biggest smash and grab on Australia’s schools and hospitals ever seen in this country”.