Brumby 11th-hour health deal

LABOR'S health and hospital reform now rests on removing the impasse over Western Australia's GST share, after Victoria signed up yesterday.

LABOR'S health and hospital reform agreement now rests on a "Treasury fix" to remove the impasse over Western Australia's share of the GST, after Victoria signed up yesterday in one of the Brumby government's final acts before entering caretaker mode.

Under the deal, the Gillard government will take responsibility for 60 per cent of state hospital funding in return for taking one-third of GST revenues.

Western Australia is refusing to sign on until the formula for carving up GST revenues is fixed, arguing the state receives only 68c in every dollar it creates, while NSW, Victoria and Queensland are each getting more than 90c.

Clearing the decks for the state election, Victorian Premier John Brumby quietly signed the National Partnership Agreement to improve public hospitals, six months after the original deal was struck by all the premiers except WA's Colin Barnett.

Senior government sources now believe it will take a "Treasury fix" to resolve the West Australian GST issue.

As a result, the fate of a truly national health reform agenda could now rest with Wayne Swan and the Commonwealth Grants Commission, which will meet later this month to consider GST revenue allocations for 2011-12.

Early yesterday, Health Minister Nicola Roxon said Victoria was yet to sign on but added: "We have every expectation that they will sign."

Just hours later, it did, delivering $900 million in extra health funding to the state over four years. Emma Tyner, the spokeswoman for Victorian Health Minister Daniel Andrews, refused to answer questions as to when exactly the deal was signed, why the signing was delayed to the last minute and whether the deal had been changed in order for the Brumby government to sign it.

It is understood the delays were a result of negotiations on both sides to "work through" the details of the implementation plan and follow concerns by Victorian health officials about the "absence of detail".

Internal correspondence leaked to the Victorian opposition in August revealed the anxiety of local health officials, who complained to federal first assistant health secretary Peter Broadhead.

Victorian opposition health spokesman David Davis said there were too many questions left unanswered by the deal.

"It is just extraordinary that John Brumby has signed the health agreement at the 11th hour before going into caretaker mode," Mr Davis said.

"He had already delivered the writs to the Governor, and had effectively called the election. He now has to come clean about the impact this deal has on the Victorian health system."

Mr Davis said there were still concerns about whether there would be forced mergers of small country hospitals, where the Medicare local boundaries would be drawn and what would happen to specialist hospitals.

Federal opposition health spokesman Peter Dutton said the last-minute deal "raised more questions than it answers".

"After refusing to sign for months this deal is rushed through hours before the caretaker period starts," Mr Dutton said. "NSW, Queensland and the other premiers should ask if any sweeteners or side deals have been struck between Brumby and Gillard."