Labor states want billions from a Shorten government

Bill Shorten is walking into a political firestorm of Labor’s own making.

Federal Leader of the Opposition Bill Shorten takes a ride on the light rail on the Gold Coast, yesterday. Picture: AAP

Bill Shorten is walking into a political firestorm of Labor’s own making, with Queensland and Victoria demanding a return to the 50-50 hospital funding deal promised by Julia Gillard and worth billions more to the states.

For five years, the federal Labor opposition has accused the Coalition government of ripping billions of dollars from public hospitals after it tore up the Gillard deal and kept the federal contribution at 45 per cent.

However, with an election ­approaching, Labor was planning to keep the same formula if it took government. It has offered the states various capital upgrades through a Better Hospitals Fund costing $2.8 billion — which it suggested was the short-term difference between 45 per cent and 50 per cent — but has not offered to contribute more to the ongoing cost of service delivery.

The Australian has learnt the Queensland and Victorian Labor governments want the commonwealth to honour Ms Gillard’s 50-50 deal in the 2020-25 funding agreement.

The NSW Labor Party appears undecided ahead of the state election, and the NSW Coalition would be content with 45 per cent.

Queensland and Victoria have been the only states not willing to negotiate the next funding agreement with the Morrison government on the terms proposed by Health Minister Greg Hunt. A pivotal dispute over public hospital funding reconciliations, which the states argue will leave them $609 million out of pocket, ­remained unresolved after a Council of Australian Governments Health Council meeting last week. “That means the work of resolving this dispute and negotiating a new health agreement will most likely be left to an incoming government,” Queensland Health Minister Steven Miles said yesterday.

“We would expect a new Labor government should move quickly to reverse the retrospective cut to hospital funding made by the Morrison government, increase the commonwealth share of ­activity growth funding — as long promised by Labor — from 45 to 50 per cent as quickly as possible, and reinstate funds cut from public dental and remote indigenous housing.”

Federal Labor health spokeswoman Catherine King was unavailable for comment yesterday.

In a heads of agreement, Mr Hunt has proposed the commonwealth maintain the 45 per cent contribution and negotiate various other matters.

But Victorian Health Minister Jenny Mikakos last week ­described it as a “dud funding proposal” exacerbated by the reconciliation dispute. “Scott Morrison has clearly learnt nothing from the Victorian Liberals’ electoral wipeout in Victoria — if you cut health and put patients last, families will make you pay the price,” Ms Mikakos said, reiterating Victoria wanted 50-50.

NSW and Western Australia will share a $50m bonus for being the first states to sign the heads of agreement put forward by Mr Hunt last year. Mr Hunt has pointed to record commonwealth funding for public hospitals under the Coalition, which is also promising a broader $1.25bn community health and hospitals program.