Malcolm Turnbull ends big week of ideas boom with COAG fizzer

MALCOLM Turnbull had a big week, floating ‘once in a generation’ reforms. But by Friday his ‘ideas boom’ had busted.

Cabinet Room With Premiers

• Plan to allow states to collect income tax is dropped
• School funding is up in the air, PM says he’s not wedded to the “full Gonski”
• ‘Healthier Medicare’ plan will be trialled
• Extra hospital funding and new laws on terror suspects agreed on at COAG

WHAT just happened?

This week Malcolm Turnbull went from being a do-nothing Prime Minister to announcing “once in a generation” reforms to schools, health and taxes. But the ideas boom was short-lived and by Friday many of them had fizzled out.

Rival politicians said they’d had hangovers that lasted longer than the PM’s policies. One even compared Mal’s antics to those of Marty McFly

It has been a big week, and the cabinet is now busy attacking the people that shot down the PM’s plans.

So, here’s what you may have missed:

FIRSTLY, THE PROBLEM

The states say they don’t have enough money to cover growing health and school costs.

They are upset that the Abbott Government cut federal funding to the states by $80 billion over 10 years.

Their budgets are also under pressure because the ageing population is driving increased health costs and they are also struggling to pay for the Gonski school funding reforms, which the Federal Government has only committed to covering until the end of 2016-17.

You may remember NSW Premier Mike Baird pushing last year to increase the 10 per cent GST to 15 per cent but this was eventually knocked back by Malcolm Turnbull.

The Commonwealth is also struggling to reduce the country’s deficit, deliver essential services and keep the economy going.

TUESDAY: UNIVERSITY REFORMS

Aussies returned from the Easter long weekend to news the government is considering changes to the Higher Education Loans Program (HELP) and VET FEE-HELP scheme.

A Grattan Institute report published on Monday found the government could save $500 million a year if it lowered the threshold that students start repaying their loans, from $54,186 to $42,000.

Education and Training Minister Simon Birmingham said this week the government is willing to consider a proposal to get students to pay back loans sooner and to collect debts from those who have died.

WEDNESDAY: THE TAX PLAN

On Wednesday the Prime Minister announced what he described as a “once in a generation reform” to allow the states to collect their own income tax to pay for health and education costs.

Mr Turnbull was apparently forced to announce the plan after discussions were leaked.

He tried valiantly to put forward the case for the plan, dodging accusations that it was a “double tax” and that it would eventually lead to income tax increases for Australians.

But by the end of the week and after fevered debate, the idea was dead.

“There is simply not a consensus,” Mr Turnbull told reporters after the COAG meeting with state leaders on Friday. “It’s withdrawn. There will be no state or territory involvement in levying income tax. We are certainly not proposing to increase income tax ourselves.”

However, the government will look at providing states with a share of income tax in return for the cancellation of federal grants.

PM Malcolm Turnbull welcomes state and territory leaders for dinner at The Lodge ahead of the COAG meeting in Canberra. Picture: Ray Strange.

“It means they would have greater freedom,” Mr Turnbull said. “Greater freedom to determine how they spend that money. It would give them greater financial autonomy.”

Giving the states access to income tax is also beneficial because it will likely grow faster than inflation or the GST.

THURSDAY: SCHOOL FUNDING

On radio to sell his tax plan, Mr Turnbull casually mentioned the Commonwealth could stop funding public schools.

The Federal Government has only committed to paying for the Gonski school funding reforms until 2016-17 and Mr Turnbull said there was a “powerful case” for the states picking up the cost after that, if states were able to collect their own income tax.

By the end of the week, with the withdrawal of the income tax change, school funding was left up in the air.

Mr Turnbull said discussions on new school funding arrangements would be concluded in early 2017.

He also said he was not wedded to delivering the “full Gonski, whatever that means”.

Instead the government will focus on how to get outcomes by using its limited resources as effectively as possible.

“If there is not a readiness to raise taxes and we believe our taxes are already very high at the federal level ... then we have to work within our existing fiscal envelope,” he said.

THURSDAY: ‘HEALTHIER MEDICARE’

The one idea that did stay afloat was a plan to create tailored care packages for Australians with chronic diseases.

The plan would allow local GPs to become medical “homes” where patients with chronic diseases like diabetes could enrol and have all their healthcare needs — from psychology to aged care — co-ordinated by one doctor.

The aim is to keep patients healthier and avoid expensive visits to the hospital.

Doctors and health groups have cautiously welcomed the plan but they want to see more detail.

A draft document circulated to states and territories shows from 2017/18, $70 million each year will come out of public hospital funding to pay for the package.

A trial of the “Healthier Medicare” package will be rolled out from July 2017, involving about 65,000 patients at 200 medical practices.

Health Minister Sussan Ley said the Federal Government would pump $22 million into setting it up, while incentive payments already paid to GPs will be diverted to the new package.

“It is one of the most significant reforms in the history of our healthcare system,” Mr Turnbull told reporters in Canberra.

Prime Minister Malcolm Turnbull, Health Minister Sussan Ley and Dr Steve Hambleton met patient Michael Hartmann and his GP Dr Antionio Di Dio in Canberra on Thursday. Picture: Andrew Meares

FRIDAY: HOSPITAL FUNDING, TERROR SUSPECTS

After days of heated debate, the PM met with state premiers and chief ministers in Canberra for the Council of Australian Governments (COAG) meeting.

Following discussions, the leaders announced that the income tax reform was not supported and schools funding was left up in the air, but an agreement on hospital funding was reached.

Mr Turnbull agreed to provide the states with an extra $2.9 billion in funding for public hospitals. He said the hospital agreement would run from July 1, 2017, to June 30, 2020 after which longer-term arrangements would be put in place.

In return the states would make a number of improvements to the way hospitals are run.

The funding represents about 6.5 per cent more funding each year.

NSW Mike Baird said: “I think we can say we have the funding for hospitals” but added “beyond 2020, to 2030, we have challenges”.

The governments also reached agreement on keeping high-risk terrorist offenders in jail once their sentences end.

The PM said draft legislation would be drawn up as soon as possible.

“It is an unfortunate reality that some convicted terrorists may not be rehabilitated at the end of their sentence and will continue to pose a risk to the community,” Mr Turnbull told reporters.

COAG also agreed in principle to adopt the NSW model for a strengthened nationally consistent system for detaining terror suspects before they are charged.

“It’s something that our police and security agencies have been asking for in light of current events,” Mr Baird said.

“It provides an opportunity for an increased detention, up to 14 days. It also provides a capacity to question those suspects.”

NSW will introduce its legislation and consult with other states and territories.

CABINET — SET LASERS FOR ATTACK

It’s clear Mr Turnbull’s inner circle, and outer circle and even his periphery ring road, are not happy about the way things have turned out.

Federal Health Minister Sussan Ley scolded state premiers for rejecting the plan and said she was disappointed they were not stepping up, insisting the federation was out of date.

“They’re quick to ask the Commonwealth to do their dirty work,” she told reporters in Melbourne today.

Ms Ley denied the quick defeat of the proposal was an embarrassment.

“We should never make an apology for having big ideas and the courage to make a difference.” She took aim at Victorian Premier Daniel Andrews, insisting it was time he put his money where his mouth was.

“There’s a long list of requests he’s had for the Commonwealth about things he wants to be funded.” The closer a health dollar fell to the patient, the more effective that money would be, Ms Ley said.

Foreign Minister Julie Bishop said the Prime Minister would have expected sensible dialogue, but some states just wanted to pass the buck to Canberra.

“I think that, in time, the states will see some of these opportunities more positively and I hope that there will be a dialogue that will lead to an assumption by the states of greater responsibility for their actions,” she told reporters in Washington.

Mr Turnbull on Saturday said the states had repeatedly asked him to raise more money for them via federal government taxes but rejected the opportunity to step up and raise their own money. “What that means is we must now live within our means.

“It is a wake-up call for the state governments.

“They cannot any longer credibly ask the federal government to raise taxes for them to spend if they were not prepared to raise those taxes themselves.”

Labor frontbencher Jason Clare wasn’t impressed by the week’s events, however, and said Mr Turnbull announced his policy on Wednesday and was forced to withdraw by Friday.

“I’ve had hangovers that have lasted longer than that,” he told the Seven Network.

Independent senator Nick Xenophon said it was a thought bubble that was always going to burst. Referring to a character from the Back to the Future films, Senator Xenophon told the Seven Network, “I thought Marty McFly was the policy adviser,”

— with AAP.