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Rudd sweetens final health incentives -

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LEIGH SALES, PRESENTER: Kevin Rudd has put his final offer on health reform to the premiers.

He's promised another $650 million to tackle elective surgery waiting times.

It tops off a big day for Federal spending, joining a multi-million dollar funding boost for aged
care services.

But the money comes with a blunt rider: the states and territories will only get it if they sign on
to the Federal Government's plan.

From Canberra, political reporter Emma Griffiths.

EMMA GRIFFITHS, POLITICAL REPORTER: There was tea for two and a chat with the Prime Minister...

KEVIN RUDD, AUSTRALIAN PRIME MINISTER: What are you in for? Tell me about why you're here.

EMMA GRIFFITHS: Kevin Rudd's hospital tour took in some of Brisbane's facilities.

He has one more week to strike a deal with the states and territories and he's laid out a final
offer he hopes they can't refuse.

Late today the Federal Government promised $650 million over four years to fund an extra 90,000
elective surgery procedures and there'll be a guarantee of Medicare-funded access to a public or
private hospital - if the wait stretches beyond what doctors recommend.

But the cash comes with a catch.

KEVIN RUDD: You can't just get a blank cheque on the basis of a system which currently does not
work, and which wastes taxpayer's money.

EMMA GRIFFITHS: The money will only flow if the premiers and chief ministers agree to the total

Late tonight they held a phone hook-up for more than an hour to discuss the latest funding

The elective surgery announcement came just hours after the Prime Minister had promised more than
$700 million to tackle aged care.

JUSTIN ELLIOT, MINISTER FOR AGEING: We're providing more aged care beds right across the country,
and we're also at the same time taking that pressure off our hospitals.

EMMA GRIFFITHS: The Commonwealth would provide cheap loans to build more facilities and fund more
GP visits to aged care homes, shifting elderly patients out of hospitals.

KRISTINA KENEALLY, NEW SOUTH WALES PREMIER: We see this as a package we can wholeheartedly welcome.

ANNA BLIGH, QUEENSLAND PREMIER: I think that there's many parts of this package that are a good
deal for Queensland, and if we iron out some of the wrinkles, we'll be signing up.

EMMA GRIFFITHS: Others aren't convinced.

TROY BUSWELL, WEST AUSTRALIAN TREASURER: I don't think that's reform - that's just moving money

EMMA GRIFFITHS: The loudest opponent to the health takeover - the Victorian Premier John Brumby -
was quiet today.

He's so far resisted the more than $2 billion worth of extra funding the Prime Minister has offered
but that defiance has earned him a warning from around the leaders' table.

MIKE RANN, SOUTH AUSTRALIAN PREMIER: Sometimes it's important to go under the radar and win than go
loud and lose.

ANNA BLIGH: Other states of course will make up their own mind, but look, I've made it clear to
other premiers, and a number of other premiers have as well, that we think that reform is
necessary, we want to be part of it and we don't want to see it derailed.

EMMA GRIFFITHS: A view the Prime Minister must be hoping will prevail.

Emma Griffiths, Lateline.