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Legislative Assembly for the ACT: 1997 Week 11 Hansard (4 November) . . Page.. 3552 ..

MRS CARNELL (continuing):

international competitiveness; the States and Territories must have access to broad-based growth taxes to replace undesirable, ineffective, narrowly based taxes; the Commonwealth-State financial relationship must be reformed to reduce the vertical fiscal imbalance; grants from the Commonwealth must be abolished, with the exception of those for Medicare, horizontal fiscal equalisation and assistance for the smaller States and Territories; instead of receiving grants from the Commonwealth, the States and Territories should have access to sufficient taxation revenue to enable them to carry out their roles and responsibilities; and there must be long-term certainty and consistency in the taxation system.

I intend to reinforce my statement that States and Territories must receive a fixed share of Commonwealth growth revenue and that this must be based on an equation which accounts for population growth and where revenue is collected. Leaders also discussed the fact that the States and Territories were suffering significant revenue losses under the safety net arrangements introduced following the Ha Lim High Court decision. We agreed that we would seek to require the Commonwealth to stand by its commitment to protect the revenue from petroleum, tobacco and liquor franchise fees that were affected by that decision.

Mr Speaker, the Commonwealth's budget is now performing significantly better than anticipated, and it should move into surplus much sooner than expected. Against this background, State and Territory leaders have agreed to press the Commonwealth to discontinue its requirement for State fiscal contributions to help fill the Beazley black hole. If this position is accepted, Mr Speaker, it is likely to benefit the ACT's bottom line by more than $7m, which would, of course, be a significant outcome.

One of the other major issues discussed by leaders was the national crisis in health care. Leaders are of the firm view that this will not be addressed until such time as the Commonwealth, States and Territories undertake major structural reform of the health care system. Leaders have called for this structural reform to be completed within the next six months and have indicated that this issue will be discussed at the COAG meeting on Friday.

Leaders agreed on eight principles which will guide negotiations with the Commonwealth in the area of health. The first of these eight principles is certainty. Long-term planning is necessary to ensure that optimal health services are delivered to all Australians. The second is restoration of base funding. The significant impact of recent cuts by the Commonwealth to the Medicare agreement funding base and the effect of population change must be recognised and base funding restored to an appropriate level.

The third is indexation. This base should then be indexed annually to cover the following factors: Population ageing and growth and utilisation growth; changes in private health insurance participation, with automatic annual adjustments for changes in coverage and utilisation; an additional factor to compensate States and Territories for the additional costs associated with changes in clinical practice, technology and drug treatment.

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