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Monday, 1 December 2008
Page: 11877


Mr TREVOR (2:24 PM) —My question is to the Prime Minister. Will the Prime Minister outline the significance of Saturday’s Council of Australian Governments meeting on creating jobs, stimulating the economy and driving reform in key areas such as education, health and hospitals?


Mr RUDD (Prime Minister) —I thank the member for Flynn very much for his question because decisions taken here in Canberra affect hospitals and schools right across Australia, including in his electorate. For Gladstone and all those cities, towns and rural communities around Gladstone, the important thing is to get it right. On Saturday we took, head-on, the whole challenge of consigning to history the blame game, which has so plagued Australian federal-state relations for so many decades.

In the Council of Australian Governments meeting on Saturday we sought to do two things. Mindful of the global financial crisis, the first was to inject stimulus into the Australian economy—$15.1 billion of additional funding, capable of creating a further 133,000 jobs. That is what I call an addition to stimulus. We have done that on the back of the $10.4 billion package we announced in October which was capable of creating some 75,000 jobs; the $6.2 billion package to support the auto industry, an industry which itself critically supports some 200,000 jobs; and, of course, the $3.3 million grant to local governments through the local government infrastructure fund, most recently conducted here through the first meeting of the Australian Council of Local Government. That was our first objective: to ensure that we provided necessary stimulus to support growth and jobs in the midst of the global financial crisis—part and parcel of our economic stimulus strategy for the future.

The second part of what we sought to do was to prosecute the long-term reform agenda that Australia so desperately needs—a reform agenda which was allowed to swing in the breeze for the better part of a decade on the part of the government which preceded us. Firstly, in terms of education in this package, we have boosted our national investment in education by more than $3.5 billion in order to bring about an education revolution. There is a $42 billion national education agreement, representing something like a 23 or 24 per cent increase on the previous education agreement between Canberra and the states. What are its parts? Firstly, $550 million to upgrade the skills of our teachers and our principals; and, secondly, $1.1 billion for our 1,500 most disadvantaged schools to enable them to employ additional high-quality staff, including teacher aids.

These are important measures of long-term reform. They affect classrooms across the country. We have also reached agreement on more than $2 billion worth of reforms to teaching transparency and basic skills such as literacy and numeracy and provide the funding so to do. This is an education revolution in the quantity of our investment and it is an education revolution in the quality of our investment, because underpinning this new agreement between Canberra and the states—effectively negotiated by the Deputy Prime Minister—is this: we will have a quality education reform agenda for the future based on proper, full transparency of school reporting to families, communities and the wider national public. We can actually measure how schools are going. We will know where to boost our support to teachers, where to boost our support for principals and where to boost our support for the resources which they need. Overall, we will lift the year-12 equivalent education retention rate from its current doldrums of some 75 per cent to 90 per cent, which would put us at the right end of the OECD rather than being wooden-spooners, which is where we are at present. The education revolution and reform agenda were prosecuted through this meeting of the Council of Australian Governments on Saturday.

Secondly, on health, what we have also done through this important agenda of reform is to ensure that we provide proper support for health reform long term as well. The health agreement is of itself significant. Between 2003 and 2008, the Australian Health Care Agreement effectively ripped about $1 billion off the bottom line of the states in terms of their effective capacity to fund public hospitals across the country. It is easy to run around the country and attack state and territory governments for what is going wrong in public hospitals. But if you pull $1 billion out of their effective funding delivery that is part of what happens as a result. If you went back to the previous Australian Health Care Agreement, in the period prior to 2003, the indexation factor delivered was 6.3 per cent per annum—still not great. Post 2003, to satisfy their own interests in boasting of a better surplus and in the midst of revenue awash as a consequence of the resources boom, they reduced that escalator to only 5.3 per cent per annum. The result was to effectively pull $1 billion out of it.

Had we continued the Howard government indexation clause for the future, for the next Australian healthcare agreement, the states and territories would have been $5 billion worse off than they are as a result of the agreement which we forged on Saturday between the Commonwealth and the states. This is necessary to deal with the real performance of our public hospital system in the future. In addition to dealing with the fundamentals of the Australian healthcare agreement we also invested $1.1 billion in investment and reforms to build the skills and capacities of our health workforce: more trained doctors, more trained GPs, more trained specialists, more trained medical supervisors and more trained nursing supervisors. On top of that, there is a $750 million investment in a new national partnership with the states to boost the throughput of our emergency departments and, looking to the long term, an $872 million investment in preventative health care.

This is the first time—and I say this in this parliament today—that we have had a substantial long-term investment in preventative healthcare strategy for the future. We can apply bandaids to the hospital system and watch as the statistics grow, as the number of presentations at hospitals coming off the back of an explosion in chronic diseases is left unattended, or we can start to invest for the medium to long term. What we have done through the preventative healthcare strategy and the funding for it, delivered through the negotiating efforts of the Minister for Health and Ageing, was to deliver $872 million over six years. This is an important step forward for the Commonwealth and for the nation if we are at all serious about reducing the burden of our public hospital system in the future.

There are reforms in education to bring about an education revolution, reforms in the long-term funding of the public hospital funding base for the nation and reforms in other critical areas, such as dealing with preventative health care as well. But beyond those areas of reform, there are also agreements with the states and territories on closing the gap for Indigenous Australians and in the critical areas of disability and housing and on how we underpin and encourage long-term national microeconomic reform by rolling back this huge burden of regulatory overhang on small businesses across Australia through a business deregulation agenda.

We are not talking about it but actually doing it, as the Minister for Finance and Deregulation and the Minister for Small Business, Independent Contractors and the Service Economy have been so effectively engaged with their state and territory counterparts these recent months. In order to make sure that happens, there is a $550 million fund to incentivise states and territories to deliver on the 27 areas of regulatory reform that we have agreed upon to create one objective—that is, a seamless national economy. It was called for by the business community at the 2020 Summit. It has been activated through the COAG process and it will now be funded through the incentive pool that we have created.

On Saturday COAG represented a significant outcome for the national economy: a stimulus of $15 billion worth of additional investment to the national economy capable of creating 133,000 additional jobs. But, most critically, it represented rolling back the blame game, getting on with the business of reforming the Federation, implementing the education revolution, implementing long-term reform for our public hospital system and creating the Australia for the future which the working people of this country have aspired to for so long. We have taken decisive action to bring it about.