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Taxpayers may have to dig deep for reform

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Australian Broadcasting Corporation

Broadcast: 28/07/2009

Reporter: Susan Mcdonald

It will be the biggest shake-up of the health system since Medicare and the Prime Minister is
already warning it will not come cheap. The Government's own health reform commission says, to fix
the system, people on the average wage will pay up to $1,000 a year more in the Medicare levy.

Transcript

TONY JONES, PRESENTER: It will be the biggest shake-up of the health system since Medicare and the
Prime Minister is already warning it won't come cheap.

The Government's own health reform commission has done the sums, and it says to fix the system,
people on the average wage will pay up to $1,000 a year more in the Medicare levy. And the
Government isn't ruling that out, but right now, Kevin Rudd is focusing on his national listening
tour - "taking the public's pulse", as he calls it, on a broad range of health issues.

From Canberra, Susan McDonald reports.

SUSAN MCDONALD, REPORTER: Let the conversation begin. Kevin Rudd has kicked off a national debate
on the health system and which of the Health and Hospital Reform Commission's recommendations to
adopt. Day one ended at a packed school gym in Adelaide.

The Prime Minister's also doing the rounds at hospitals; at Sydney's Royal North Shore burns unit
today there was no shortage of advice.

DOCTOR: We need more access to theatre time, staff in there, resourcing there.

SUSAN MCDONALD: Doctors and patients alike are being pumped for their first-hand experience.

KEVIN RUDD, PRIME MINISTER: You will have insights which either confirm or confound the logic with
which we have been presented, and that's the purpose of being here. So we are here in serious
listening mode.

SUSAN MCDONALD: Kevin Rudd's given himself six months to decide whether to take from the states the
responsibility for primary health, dental and aged care and outpatient services.

NICOLA ROXON, HEALTH MINISTER: Business as usual is not going to be a sustainable option for us
into the future.

SUSAN MCDONALD: And sweeping changes don't come cheaply.

KEVIN RUDD: The system's reached a tipping point, we need some fundamental long term reforms and
it's going to cost.

SUSAN MCDONALD: The Health Commission says its reforms will save $4 billion a year and cost a whole
lot more. It says the universal dental scheme would cost $3.6 billion a year and be paid for by a
hike in the Medicare levy. For someone earning $60,000, that would add $450 a year.

The rest of the changes would cost up to an extra $5.7 billion a year. If that was all put on the
taxpayers' Medicare tab, then it would add another $700 a year to the health bill of someone on an
average wage. And that's not counting the up to $7.3 billion needed to improve the health systems'
buildings and equipment.

But the Government has other options.

CHRIS RICHARDSON, ACCESS ECONOMICS: It may make more sense, however, to look at means testing in
various ways instead of universal access, universal taxing.

SUSAN MCDONALD: As the nation debates health, the Opposition is struggling to add its voice. The
latest opinion poll has renewed attention on Malcolm Turnbull's plight as leader and re-opened
Coalition hostilities.

Outspoken backbencher Wilson Tuckey has sent another email to his colleagues, blaming his leader's
policy shift on emissions trading for a slide in his fortunes. Others say it to his face.

AUDIENCE MEMBER: The second part was what I'd call BS. I have never heard such drivel in all my
life.

MALCOLM TURNBULL, OPPOSITION LEADER: I'm very confident that we will fight the next election and
win it.

TONY ABBOTT, OPPOSITION FRONTBENCHER: Polls come and go, but Malcolm is our leader for keeps. I
think Malcolm is doing a good job.

SUSAN MCDONALD: The Government isn't without internal conflict either. It's moved to diffuse a
union uprising over protecting Australian manufacturing jobs.

KIM CARR, INDUSTRY MINISTER: A $19.1 million package of new measures designed to get more people
buying Australian at home and abroad.

SUSAN MCDONALD: Unions had been threatening to push 'Buy Australian' rules at this week's Labor
Party conference. It wanted preferential treatment for local firms bidding for government
contracts.

But their demands threatened to break world trade rules.

KEVIN RUDD: We need to avoid protectionist measure which invites retaliatory protectionist measures
from economies around the world.

SUSAN MCDONALD: The Government instead is offering more help for Australian companies to secure
work, and any business tendering for a Government contract will need to submit plans for Australian
industry participation.

PAUL HOWES, AUSTRALIAN WORKERS UNION: It's a win for Australian business, it's a win for Australian
workers and it's a win for the Australian people.

LINDSAY TANNER, FINANCE MINISTER: Well I don't think there is a contradiction, Kerry. We've had a
very constructive engagement with the trade union movement and we share a broad objective, which is
to maximise employment in the Australian economy.

SUSAN MCDONALD: So a united front they'll present at the Labor conference. Susan McDonald,
Lateline.