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(generated from captions) next year. Can you say that

has had no effect? I think

we've had a very negative

debate in Australia led by the Liberal Party which has

talked our economy down day

in day out. Let's be frank

about this. The carbon price doesn't start for another

year. What I'm dealing with

is what is happening right

now. You've had the Liberal

Party talking our economy

down out there with their wrecking ball smashing

confidence going round making

all sorts of extraordinary

untrue statements about the

impact of a carbon price.

You've also had all of those

other factors I spoke about

before, the impact of the

natural disasters, the high

er dollar. There are a lot of people doing it tough because

of the higher dollar, a lot

of tourism operators I spoke

to in Cairns, we dove a

paxwork economy and that's

why when we brought down the

budget in May this year we talked about the need to spread opportunity right

around our economy, that our

budget had to deal with not

only the fact that we've got

a big investment pipeline and a resources boom but had to

make sure we spread the opportunities from that to

every corner of our patchwork economy because not everybody

in our economy is in the fast

lane of the resources boom.

On the hospital reform, as

treasurer how concern ed are

you that $16 billion had to

be spent to bring the states

on board on... I accept

accept that characterisation

at all. It is entirely affordable. It recognises the

fact that we have to have in place long term agreements

but also we've got to get

value for money. What is put

in place in this agreement is

a way to ensure we do have

get value for money. I think

this is a ground breaking

agreement for Australia. The

issue of intergovernmental

relationships in held is one

that has bedevilled our

social policy for a long

time. This will inject

certainty, value for money outcomes, I think that's

something we can all be

pretty proud of, it is a very

substantial reform for Australia. Treasurer Wayne

Swan there earlier responding

to the RBA's decision to keep

the official cash rate on

hold at 4.75%. He said he saw

the assessment of Australia'

economy. He also said the

economic fundamentals of

Australia's economy is

strong. There's also a shift

in strength from the west to

the east which will serve our

economy. Here's David

Speers. Thanks, we'll take a

look at the interest rates

decision. It is a relief for

Wayne Swan, no doubt about

that. Also be looking at the

health deal struck today.

Talking to the health Minister Nicola Roxon about

how it does stack up compared

to the original Kevin Rudd

health reform proposal. Stay

with us after the break.

Welcome to the program.

I'm David Speers. 16 months

since Kevin Rudd announced an

historic agreement with most

of the states and Territories

to reform the nation's health

system, the deal has finally

been done by Julia Gillard.

It is a different deal to the

one Kevin Rudd originally

proposed. The Commonwealth

will not become the dominant

funder of the health system,

nor will it take control of

the hospital system. And the

guarantees that were offered

by Kevin Rudd to ensure that

emergency and elective

surgery patients were treated

on time have now become

targets. But Julia Gillard

denies this is a watered-down

second best deal. She

bringsled at such suggestions

today. She insisted that

patients will still see major

improvements in what she is calling a significant reform

significant since the of the health system, most

introduction of Medicare. What this new agreement means

put simply is more money,

more beds, more services,

more local control, greater

accountant, less waste and

less waiting times around the

nation. And she says it will

end the blame game. She's

called this her year of

decision and delivery. This

health deal certainly does

mark one leftover reform from

the Rudd era that Julia

Gillard has been able to

land. But just how

significant is this reform?

There's no doubt Julia

Gillard faced a tougher

climate in reaching this deal

with three Liberal premiers to deal with in Western

Australia Victoria and NSW.

While there is more money on

the table, $16 billion to

help improve the health and

hospital system according to

the Victorian premierer

patients may not notice much

in the way of change to the

system. I'm pleased to have

reached a conclusion on the

national health agreement. I

am positive about the

outcomes but I'm realistic as

well. For Victorians this

will mean some additional

money. It will mean that we

retain the strengths of the

Victorian health system, but

I am realistic to the point

that this will, for

Victorians, not make a great

deal of material change.

Labor premiers however were

more up-beat and on message.

Before this states had to

Federal Government's table. take the crumbs of the

For the first time we now

have in the Labor Government federally a Government

accepting that growth in

hospitals with when we get

more sick people needing more

traements that are more

expensive, that they have to

put money on the table and

that's what this agreement

does. Legislation will be

required to introduce this

reform for significant parts

of it anyway. While it's

still unclear which way the

Liberals and the Nationals

will vote in parle for now the Opposition is calling

this deal announced today a

Dave-in from Julia Gillard.

The Prime Minister's reform

credentials are in tatters

today after she has put up

the white flag on health and

hospital reform. After

promising sweeting national reforms the Prime Minister

has capitulate ed to the

states and handed them a

blank cheque. The only way to

end the blame game is to

provide long-term sustainable improvements in health care and Julia Gillard has failed

to provide that today. So

how does this deal stack up

in comparison to Kevin Rudd's

original proposal? Health

Minister Nicola Roxon was at

the centre of framing and

then trying to reach agreement on both proposals. I spoke to her a little

earlier. Nicola Roxon,

thanks for your time. You of

course spent many months trying to convince the states

to sign up to Kevin Rudd's

original reform deal. Where do you think that went

wrong? I think ultimately

the public is well aware that

the GST arrangements that

were part of the held deal

were not accepted by every

state and territory and with

the change of government in

states were going to be a

problem for that deal. Most

of them have been retained. The big change is, of course

not obtaining the GST and not

taking on 60% of funding. But

all of the sore

deliverablies, getting better

access times for patients,

more transparency in the way

the money is spent m health,

better reporting of

performance of different

health and hospital services,

that's all there and the Prime Minister has been able

to negotiate that deal with

every state and territory. So

we have a truly national

reform with some really big

changes in it, paying an

efficient price across the

whole country for activities

in our hospitals is a real

building block. Most people

would be amazed that we don't

curm do that. That's taken a

huge amount of goshs to get

all of the states and territory in the tent and I

think put us in very good

stead in the future. On the

funding basis of this, the central argument of course

that you and Kevin Rudd made

was that the states couldn't

afford a shoulder to burden

into the future the growing

cost that hospitals would

face, that they didn't have

the revenue source to do

that. Now they will have to

shoulder that cost. That's

not right. The $16.4 billion

that was new money in the

Kevin Rudd 2010 deal is still

$16.4 billion of new money in

this arrangement that's been

struck with the Prime

Minister and premierers. But

there's no commitment from

the Commonwealth to pick up

60% of the future cost. What

there is, I was just about to add, is that there is a

commitment for us to pick up 50% of the growth costs in

the hospital system. Don't

forget, the 60% was attached

to a GST arrangement. You

didn't get to 60% just by the Commonwealth putting in new

money. Once the GST

arrangement was removed from

the deal which was required

we've still put in place a

50% share of all of the

growing costs. Of the

growing costs. Shoulder the

burden into the fulet. When

will the future actually pay

the 50% of hospital costs?

This is only 50% of the growth costs thaw're

committing to here. When will

the Commonwealth be picking

up half the bill? The Commonwealth will fund an increased share of the

hospital costs into the

future as those services grow

the population grows and the

demand grows, but the 50% of

growth into the future means

that what was going to be

unsustainable for the States

and Territory is now a shared

burden, 50 cents matched by

us and them for every bit of

that growing expenditure. It

will put us over time, it

gradually increases to 42%

and 43%. It doesn't take us

to 50% of the overall costs.

So the States will still be

the dominant funder for many

years to come The states

will. The states do run our

hospital system, we are if

you like not only the

significant funders in this

arrangement with them but the

standard setters and we

require not just the

efficient pricing but

reporting Labor promised at

two elections that it will

become the dominant fupder,

that it will take control.

We can keep going back in

history as long as you like

but the truth is... The two

elections that you've gone

to We've made very publicly

clear, this deal has been announced since February that with the change in

Governments in a number of

states and with the

negotiation process that we

have got a new deal. That

deal was announced in

February, all of the details

have now been agreed to with

every state and et Territory

leader and that's what we've

announced today. This is a

big change but it isn't the

same deal that was talked

about in 2007 or that was

struck with Prime Minister

Rudd in 2010. We've not made

any secret of that. The real

strength is that we've been

able to get all of the reform

components actually with a

national support across all

jurisdictions and therefore

the ability for us to actually be able to deliver

the change for patients. Because that's ultimately

what it's all about. On a

couple of specifics, the Rudd

plan about guarantee that elective surgery patient

would be treated within the

clinically recommended time

or in a private hospital

within five days. That's now

gone. P why? What was wrong

with that? We asked for an

expert panel to have another

look at the targets that had

been set. We were strong

believers that setting

targets is a way of being

able to improve performance,

so get people more quickly through emergency departments, more quickly

seen to for their elective surgery. The particular proposal that Prime Minister

Rudd and I put forward in

2010 actually required a

particular mechanism to

deliver that outcome, using a

private hospital within a set

period of time. When we got

clinical advice from leading

clinicians across the country

they actually said there was

some serious risks to

patients and some perverse

incentives that were in place

in we went ahead with that

plan. What risk would a

patient face from that

guarantee. We've released

the report, it's available

for people to have a look at,

the risks were there were

really twofold. One that you

might leave all the patients

that had already been sitting

on the waiting list for a

long time, just treat the new

ones to make sure you wouldn't trigger the

guarantee. They said that's

bad because you want a way to

clear the backlog as well. I

think they were also

concerned it might lead to

some pretty ad hoc arrangements where you're

rushing to meet the targets,

grabbing a first bed here

where there might not be a properly outcome for a

patient. The Prime Minister

made pretty clear today when

you've got your leading clinicians saying it's not

going to work you need to

take their advice. Why

weren't they consulted first

time around? Why wasn't this

ironed out earlier on last

year? There's always

negotiations that occur as

part of coag and ultimately I

think Prime Minister Gillard

has made clear that she

doesn't want the political

impetus to be determining

what is safe clinically, she

wants the professionals to

have a say in it. We've taken

their advice, it's still going to be very challenging

for them to meet those targets. We're not afraid of

that. We think it's good to

have ambitious targets. Should there have been more

of this consultation with the

experts before those original

guarantees were offered? I

think that's a fair comment

to make. I am pleased that

we're now in a situation

where we've got good clinical

input. We've taken that advice, the premiers have

taken that advice. We are now

all signed to. This is being

sold as an end to the blame

game. So who is going fob

responsible if a serious

problem is identified in a

hospital? The local hospital

networks will be the first

port of call for any

particular procedure al

problem there might be in a

hospital. They do report to

the states, the states are

the system managers. We are

setting the standards, the

guarantees and the funding.

The blame game has tradition

ally always been about whose fault it was a particular

problem's arisen. The corner

of that was an allegation the

Commonwealth was not

shouldering the burden it should have for funding. P

now that we're sharing the

growth in costs and paying

for the activity in each

hospital thatting argument

can'ting made. It doesn't

mean that people won't make political arguments from time

to time about who should do

what and better. But the core

about funding is now resolved

for the future. There's

nothing in this reform deal

for dental health, it seems

that still remainings the

unfinished business here. In

health there are lots of

areas. We've been clear in this term of Government we

are determined to look at

both dental health and aged

care. We made a commitment we

would look at mental health.

That was in this year's budget. Really there are lots

of components to the health

system. The big deposhting

area has always been around

hospital and primary care

services. That is in a deal

that we've been able to

announce today. There will

still be further work on

dental health in this term of

parliament. Absolutely.

We've set up an advisory

committee with the input of

the Greens, this is something

we have negotiated with the

Greens, looking at recommendations, considering

dental held and aged care in

the context of the next budget and the one after that. Obviously there's lots

of work to do. Woe shouldn't

underestimate the impact this

reform will have for patients

using hospital and primary

care services like GPs. That

doesn't mean we don't need to

do other things in dental

care and aged care into ut if

the. Health Minister Nicola

Roxon talking to us earlier.

After the break we'll be

joined by our panel. Have a

look at this health deal, the

changes that have been made

since the original Rudd

model. Also look at the Prime

Minister's meeting tonight with News Limited editors.

What can we expect? Stay with us.

Welcome back. Before we

get to our panel let's check

in on the latest news

headlines. Here's Vanessa.

After more than a year of

haggling a deal has finally

been done between the

Commonwealth and the states

on health reform. The Prime

Minister denies it's a

watereddown version of her

predecessor's original plan

insist ing patients will still see mainly

improvements. Under the deal

175 billion dollar over the next 20 years. And the

Commonwealth will fund 50% of

public hospital costs. Some

relief for borrowers with the RBA leaving interest rates on

hold for a ninth straight

month. The RBA pointed to uncertainty on global

financial markets and high

inflation data as it left the

cash rate at 4.75%. It's the

longest period of a steady

cash rate in four years. The Australian dollar dropped on

the back of the announcement.

Queensland Premier Anna Bligh

is saying the Opposition

leader is trying to score

points in saying he would

have reduced the Wivenhoe

capacity. The media was given

the letter today but it did

not specifically mention

reducing the water in

Wivenhoe damage. Campbell

Newman says if he were premierer he would have drawn

down the dam. The US House of

Representatives has passed

the deal to pass the country

debt crisis. The deal means

it's one step closer to

raising the debt ceiling. It

still has to pass through the

Senate before being given to President Barack Obama to

sign into law. Syrian tanks

have near the border with

Lebanon to try to stop the

devastation. UN condemn Syria

over its deadly crackdown on

pro democracy protestors. At

least three protestors were

injured by machinegun fire

during Ramadan evening

prayers. In sports news

Melbourne caretaker coach

says he has no ambition to

coach the club next season.

He says he's focussed solely

on the remainder of this

season starting next Saturday

against Carlton. Vanessa,

thank you. Let's get to our

panel, Phil Coorey from the

'Sydney Morning Herald' Matt

Franklin from 'The

Australian'. The health deal,

how does this stack up. Is

this going to be the major

reform of our health system?

Are we going to see

improvement for patients?

The Prime Minister says you

will. The Opposition says you

won't. The premiers say you

will. It barely resembles

what was originally unveiled

by Kevin Rudd. Do you

think? In neck nism. The

whole thing about the states

surrendering GST and the Commonwealth becoming the

hundred per cent funder. He

went to the election in '07

saying if they don't reach

agreement we'll take them

over. The Commonwealth is

going to fix this But

Gillard's argument today is

the end is still the same,

getting there is a lot

simpler. Her criticism was

the original system was

unwieldy, over bureaucratic,

you can still achieve the

staple results. She had a

couple of addition really in

the news conference today

saying this whole

Commonwealth becomes dominant

funder, woo etake a third of the GST revenue from the

states to pay for it was

never going to work. The

couple of addition she had

was at journalists saying

this is watered down. She

was defensive. I thought she

was quite challenging and

feisty, putting it on

reporters. On reflection I

think she had a point because

the point she makes is "Don't

ask me about the process, ask

me about the results" and we

all know Kevin Rudd is a man

obsessed with process. And I

think we were all focussed

on, this is the way we would

do it, rather than - which

the Prime Minister is now saying, you should be

focussed on the results. In

Kevin Rudd's defence it

wasn't just him. A lot of

experts in this area have long argued the Commonwealth needs to take funding

control. I think you either

take it over or you don't.

Anything else is going to be messy. Gillard had to work

with what she had to work

with. Western Australia was

never going to be on board.

NSW said the same once they

became Liberal. So she had to change, there was no option

anyway. So she's negotiated

her way through. She says the

end result is the same. The

premiers certainly aren't

complaining. They've got no

Doherty. The onus is going to

be on them. - - more Doherty.

Tsh - - dough. The blame

game's over and it's the

states to blame if things go

wrong. No doubt she faced a

tougher task than Kevin Rudd

given there were three

Liberal premiers, she's

always got the minority hung

parliament here to get the

bills through on this. But

she's landed the deal. How

important is that given she

said this is the year of

delivery. It's another boxed

ticked. The carbon tax is

sort of almost over the line,

just got to get the legislation through the

parliament. The mining tax

has got a wobbly wheel and a

big hole in the side compared

to the original version, that

will probably get through.

This isn't what it was going

to be, the Malaysian thing,

jury's out whether that's

going to work. It's done. Six

months time that could be

ancient history. I think we

became used to non-delivery

under Mr Rudd and a Prime Minister who's standing up

and saying "I did what I said

I was going to do" it's like

man does John - - job. It's

news if she does it. There's

obviously critics of each

policy. Malaysia, it may not

work, if it doesn't work

they're in bigger trouble

than the start. How happy

about Labor back benchers be,

for a couple of days they're

talking health. They need to

spend more time doing this

sort of thing. On Malaysia though, yes, the deal was

inSaoed last week but there's

uncertainty, how are you

going to force boat people on

to a plane to Malaysia,

there's 54 who arrived the or

day, they're going to be the

test case, seems they're

going to take their time, the

question remains what force will the Federal Government

use, I want to play the PM's

answer on that. Yes, we do

have security personnel in Australian Federal Police

available to assist with the

transfer of asylum seekers to

Malaysia, my view is that

people will be given

instructions to board a plane

and they should obey those

instructions. As for operational matters and

requirements for the Australian federal police

including training exercises,

they're a matter for the police. So fair enough, it's

for the police to decide

exactly what force they use,

either way. It's not going to

be easy. They're past the

point of no return, aren't

she? Craig Emerson gave a

press conference not long after Julia Gillard this

morning, and he's the acting

Foreign Minister, he simply

said "They're going, there is

no option." You get the

sense the Government's pretty

keen to broadcast. How

heavy-handed it will be to

send a message to the people

smugglers. They have to,

otherwise they've got to this

great deal of trouble to

create a new system, set up a

deal with another country,

they have to follow through

or that will send no message

at all to people smugglers.

How some of the Labor back

benchers going to feel if we

do see some heavy hand ed tactic. It will be the same

as backpackers who stayed. I

can't recall riot police

being used to... I mean,

they've had to send home

people who have been refused refugee visas before. I'm

sure they have their methods.

They may be anticipating a

mass protest in this case. It

might be ugly. I don't think

you can question their

resolve. There's some report

they'll be shooting them with

baby bag bullets, Can't see

that happening. Maybe a frogmarch, unsavery as it is

that's going to happen. This

will be a test case to see

how this works with this

first boat load. Tonight

Julia Gillard is going to sit

down with News Limited

editors for a meeting in

Sydney. She said of course in

recent weeks News Limited had

some hard questions to answer

in the wake of the 'News of

the World' scandal in the UK,

do you reckon she'll be putting those hard questions

to the... No chance, she

doesn't have any hard

questions to ask because

there aren't any allegations

of anything like the nature

of what's happened in the UK

in Australia. I thought her

words at that time were

poorly chosen. She was making

the point that given what had happened people would have questions. She's had plenty of opportunity to tell us

what those questions are and

there are no allegations She

was asked today what her

message would be to the

editors of those news

likelihood papers, here was

her answer. Yes, I am meeting this evening with News

Limited editors, I was

invited to do so by John Hardigan who brought his

editors together as I

understand they periodically

do. Such meetings have been

addressed by Prime Ministers

and Opposition leaders in the

past. Whennists invited I

accepted the invitation.

Phil, she says she'll be outlining her reform plans

for the future. I'm sure that

will be... I think it's more

of a peace pipe session.

They'll smoke the peace pipe.

She feels she's getting a

rough time from some of the

papers. She'll put that case

to them, they'll put the case

to her, they'll all try and

get on. This has been a

storm in a teacup. Surely

they'll talk about the

proposal. I'm sure they'll

ask what she's got with that,

I'm not sure that's going to

go anywhere, this inquiry,

but the concrete outcome will

come out of the meeting I

don't think there will be

any, just both sides putting

their grievances to one

another. Ask Matt he'll

know. He'll get a briefing

I'm sure. Such meetings by

the way aren't unusual, Prime Ministers, Opposition leaders

have been asked to these

meetings before. Sit

around, talk about editorial

things that editors talk

about. Nothing to see here.

We journos don't know that

much about it Interest rates

on hold this afternoon. Happy

Days for the Government. This

cost of living is really

starting to bite up there.

This is not something they can deal with at the

moment. No, just be horrible.

It's never over interest

rates, we go through this

charade every month, another

couple of weeks some bunch of

figures will come out, economists will split 50/50

on the likelihood we'll go

through this again, momentsry

reprevious for the

government. Joe hockey was

laying the groundwork, I

suppose an interest rate rise

will come eventually. It's

the nature of the economic

cycle, just like Joe Hockey,

like Julia Gillard, man does

job. On that note. We'll put

it off for another month

then, thanks for joining us

this afternoon. After the

break we'll take a closer

look at the non-decision

rate. And indeed the

Government's handling of the

bottom line. Stay with us.

Welcome back. Home buyers

and the Government are

breathing a sigh of relief

this afternoon after the

Reserve Bank decided to keep

interest rates on hold. Now,

figures last week showed

inflation, both underlying

and the headline rate on the

rise. Normally that would

point to a rate rise around

the corner, but the debt

criess in Europe and the US

it seems have convinced the Reserve Bank that now is not

the time to be lifting

interest rates. It is however

keeping a close eye on

inflation as the statement

from the Reserve Bank

governor made clear this afternoon. Treasurer Wayne

Swan welcomed the decision.

Today's decision by the

independent Reserve Bank is

welcome relief frr families

and wiss that are doing it

tough. It means that a family

with a $300,000 mortgage are

still paying $4,500 a year

less than they were prior to

the global financial crisis.

But of course if you're

struggling with cost of

living pressures every dollar

counts and for the

Government's part what we are

putting in place is the

fastest fiscal consolidation

on record. Wayne Swan

drawing stark paradifference

- stark difference between

the Australian debt situation

and that faced in US and

Europe. To tell us more about

today's decision and where

interest rates may be headed

in the month to come David

Degara, why did the Reserve

Bank keep interests rates on

hold today? One is as you said the international

economy has been more

volatile recently, the

European debt crisis, the US

debt crisis and also some

slowing in the rate of growth

of the global economy. And

the other major factor is the

domestic economy, you sort of highlight continued household

caution, the job that the

high exchange rate's doing,

flat to lower asset prices,

so all of that suggests the

domestic economy has lost

shmomentum. In fact, they've

downgraded their growth

forecasts through this year

by three quarter to 1%. Given

all that sit down and wait

that high CPI last week. There's no sign the

Australian dollar is about to

suddenly fall and the debt

crisis in the US may have

been temporarily, but still

has a long way to run before

we see any major improvement

there. Are we going to see

rates where they are for a

while yet? Is Quite likely,

in fact, we think probably

until the near the end of

this year. It's going to

depend upon how the domestic

economy really performs over

the next couple of quarters.

I think they'll just sit on

their hands for the time

being. They've got time to

wait. Policy is doing the job

they wanted to do which is to restrain demand because

they're still worried about inflation. We just saw that

figure last week. So the

decision today was not an

exactly straightforward

affair. They did consider the

case for a tightening but

sided it was - - decide it

was prudent not to give

anything. So they'll just sit

where they are for the time

Christmas at least you being at least. Through to

reckon. Tell us about the

Australian economy. What is

going on? The inflation

figures last week, very different interpretations

Wayne Swan saying with the

cyclone, banana crisis, the

Opposition saying there's a

big er problem here. Do you

what think? Is inflation a problem? Clearly if the domestic economy does start

to pick up again that will

raise the spectre that

inflation concerns are going

to get worse before they get

better. So we think the

domestic demand will start to

pick up a little bit over the

next couple of quarters. That

could raise a spectre that

inflation concerns could get

a little bit worse. If that's

true we think that rates will

go up by the end of the year.

Right now through the middle of this year we have seen

business and consumer

confidence take a bit of a

hit. We haven't seen the full

impact on the economy of that

surge in investment resource,

all that suggests the rmpleg

have got time on their hands

at least. When we do look at

these debt crises, United

States, Japan's got its own

problems as well. What do you think about the Australian

position, do we have a

problem when it comes to

debt? Ear we hear the

treasurer saying we're in a

very different situation. I

think Australia's in a good

position with the economy

growing the Government's got

time on its hands to

consolidate its finances.

Households are in the same

boat. Most people are in

jobs, got good incomes, got

some wage rises, they're actually taking that

opportunity to repair the

balance sheets, as opposed to

the US situation where you've

got unemployment very high

and they're going through

that painful balance sheet

repair process. We're in a

fortunate position for now,

and I guess we can thank

China for a lot of that over

the past year or so. But

because people are starting

to look after their own

balance sheets, they're not

spending, retail and housing

are going through a tough period. Absolutely, we saw

that today with the building approval numbers, house

prices are lower, there's

definitely that consumer

caution out there. If

anything that just seems to

have gathered a little bit

more momentum through the

middle of the year. NAB

senior economist, David degaris, good to talk you

to. Thanks That's all we

have for today's show. Do

stay with us. After the break

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