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Hospital deal a $5 billion "bandaid": Weatherill

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Prime Minister Malcolm Turnbull has confirmed he’s working to change unpopular cuts to hospital funding made by his predecessor Tony Abbott but South Australia warns it’s likely to be a bandaid solution.

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Turnbull says the proposal to maintain activity-based funding and a national efficient price will be put to state premiers and territory chief ministers when they meet in Canberra this week.

He wouldn’t confirm any dollar figure.

Abbott’s horror 2014/15 budget put an end to that model for hospital funding from July 2017, with public hospital funding to instead be based on the inflation rate and population growth – an arrangement states and health professionals argue is unsustainable.

States are confident they will be offered a four-year hospital funding agreement to 2020 based on the original formula agreed under the Gillard Labor government, The Australian reports on Tuesday.

That would be a $5 billion hit to Treasurer Scott Morrison’s first budget.

“(We’ll) ensure that Australians get the best care in hospitals and that hospitals are delivering that care to Australian patients as efficiently and effectively as we can,” Turnbull told reporters in Sydney on Tuesday.

South Australian Premier Jay Weatherill says he’s received a preliminary call from Turnbull and understands there may be an interim offer.

But it’s a $5 billion bandaid for a $57 billion problem.

“Any contribution would be welcome because the size of the problem is enormous,” Weatherill told ABC radio.

“It’s likely to be a bandaid on a much bigger wound.”

Former treasurer Joe Hockey’s first budget, delivered in May 2014 when Abbott was prime minister, included $57 billion in cuts to hospitals over the next decade.

The new deal will reportedly be tied to a tax reform proposal under which the states will be offered a share of income tax beyond 2020 to fund health and education.

Turnbull and Morrison on the weekend mapped out the health funding compromise to present to state premiers and treasurers at Friday’s Council of Australian Governments meeting in Canberra.

Weatherill has released figures showing tens of thousands of patients will be left untreated if the hospital funding black hole isn’t filled.

He says the Ernst & Young report found by 2024/25, more than 107,000 patients each year will be left untreated in the public system as a result of the $4 billion cut to the state’s hospitals.

That will push more people to the private health system, driving premiums up an extra 0.5 per cent each year.

“The states and territories simply cannot afford to bear the brunt of these cuts,” Weatherill said.

“It was a substantial reason for Mr Abbott’s demise and it remains the unfinished business of Mr Turnbull’s leadership.”

Weatherill is still pushing for the GST to be part of tax reform talks.

The reports today prompted state Liberal leader Steven Marshall to call on the State Government to reverse its increases to the Emergency Services Levy.

“Premier Weatherill promised South Australians that he would reverse his savage ESL hike if the Federal Government reversed its budget cuts,” Marshall said.

“There is no excuse for Premier Weatherill to keep slugging South Australians with massive ESL bills.”

– with AAP

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