Tuesday, April 13, 2010

Those Clever States

Personally, I think the bunfight that is going on between the Premiers and the Prime Minister over health is a good thing for the rest of us. It's an argument that we need to have.

Most thinking people know what is happening - it’s a game of brinkmanship that is all about money. The states have it - via their share of the GST and the Feds need it to properly run the health system.

It's obvious what John Brumby is up to - he is looking for more and bigger bribes. He wants Kevin Rudd to keep upping the ante before he will agree to hand over his "precious" Victorian health system. As if it is any good anyway - actually he will be glad to be rid of it.

The truth is that all the states will be glad to offload their health systems. Most are in serious decay and as we already know the growth in demand for health services is unsustainable - especially when managed by the quality of politician who seems to be elected at the state level. All states would gladly hand over their health systems if they could do it without pain or penalty.

Except for one thing - when they hand over health they also lose a third of their GST revenues. This is the sticking point.

And this is a problem for two reasons:

1) The states have become expert at "cost shifting" and playing the "blame game" with our essential services - they move money around between services and mis-report outcomes and juggle their GST funds to the extent that if they were companies regulated under corporate law then their Directors would be in big trouble - some might even be on their way to jail. But if you are a state government it’s not called fraud ;-)

Yes Virginia, the states will tell you that they spend large bundles of dollars on health but when those bundles are threatened then they will adjust the numbers downward and report smaller bundles. That is what is happening here - which means you can't trust the state accounting systems or budgets.

2) The states also know that if they lose health then their reason for being is significantly reduced. The next thing you know they will be asked to give up education and a range of other state services - and then what would they do? And then why would we need them?

The quite amazing thing about all of this is that if they had been doing their job properly they would still be relevant and in the game and there would be no agitation and/or reason to be rid of them. It is only because they are lazy and incompetent that there is any pressure to move state services to the federal government.

That's the thing about state politics - not only are they incompetent - but apparently they don't even know it.

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