Tony Abbott says Julia Gillard's revamped health reform package is yet another backdown

TONY Abbott has lashed Julia Gillard over her revamped health package, describing it as the “biggest surrender since Singapore”.

Julia Gillard

TONY Abbott has lashed Julia Gillard over her revamped health package, describing it as the "biggest surrender since Singapore".

The federal government would provide 50 per cent of new health funding under the revised offer, to be presented to state premiers on Sunday, and not 60 per cent as originally agreed.

The new plan also scraps Kevin Rudd's guarantee of 60 per cent federal funding for new hospital capital costs.

The Prime Minister said the states would be no worse off than under the original deal, because they would not be required to hand over 33 per cent of their GST.

The new proposal was required after Liberal-held Western Australia and Victoria refused to sign over their GST.

Mr Abbott said the axing of the earlier proposal was the latest in a series of backdowns and broken promises from the Labor government.

“This is not the reform that Kevin Rudd promised in 2007, not the reform he promised in 2010, this is not what she went to the election promising,” he said.

“Really it's much ado about nothing.”

He predicted that state premiers would outmanoeuvre Ms Gillard at a special Council of Australian Governments meeting on Sunday, saying she had “little, if any, vision for the country”.

New South Wales Premier Kristina Keneally, who faces an election next month, told the National Press Club she would not sign any deal that cut money and extra beds her state secured at last April's COAG summit.

“I do go with that bottom line that the beds we secured, the money we've got, the growth funding we've secured, that that stays in NSW. That is my bottom line,” she said.

Under the new offer, the states would be expected to place their share of funding into a single national pool that would transparently record where the money went.

Ms Gillard said outcomes for patients were more important than whether the states gave up a portion of their GST.

“I do not want to let a political argument about financing arrangements stop me securing that better deal for patients,” the Prime Minister said.

“I do not want to let politics stand in the way of the cause of genuine health reform.”

In return, she wants the states to agree to new standards on the treatment of patients.

She has also offered to improve funding for GP and after-hours treatment via the government's Medicare Locals program.

The new deal would see an extra $16.4 billion in health funding for states by 2019-20, Ms Gillard said.

The funding would be delivered in stages, increasing to 45 per cent in 2014-15, and 50 per cent in 2017-18.

The revised federal proposal includes strict national standards, including a four-hour emergency treatment “target” and the deliver of 95 per cent of elective surgery procedures within recommended time.

The states would also have to submit to activity-based funding, where hospitals are funded on an agreed “efficient price” for delivering particular services.

The system, proposed under the original deal, helps identify under-performing hospitals.

Ms Gillard will take the proposal to Sunday's special COAG meeting in Canberra.

She warned there would be no extra money without reform.

“There are no blank cheques here,” she said.

Additional reporting: James Massola