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Australia's Rudd may call referendum on health impasse
Rob Taylor
CANBERRA
Thu Apr 15, 2010 2:36am EDT
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Australia's Prime Minister, Kevin Rudd talks during a televised debate with federal opposition leader, Tony Abbott, at the National Press Club in Canberra March 23, 2010.
Credit: Reuters/Daniel Munoz
CANBERRA (Reuters) - Australia's Prime Minister Kevin Rudd threatened Thursday to ask voters to directly back his sweeping health reform plans as opposition from powerful state leaders threatens to hobble his re-election strategy.
World
Rudd has played down early polls, but said he would go ahead with a risky referendum alongside the election if state leaders rejected his health shakeup at a meeting Monday. Australians have passed only eight out of 44 past referendums.
"I want to cooperatively reach a reform plan with the states and territories on the future of the health and hospital system," Rudd told local radio, "but I've always said if we can't get there we'd have to seek a further mandate from the people."
Rudd remains on course for victory in elections due later this year, but his popularity has been shaken by his inability to deliver key first-term promises, including difficult health, climate change and education reforms.
In a bid to counter critics and win back straying voters, Rudd in March proposed the biggest health shake-up for 30 years, promising to cut waiting lists for state-run public hospital surgery and take control of other health services.
At least two state leaders oppose the plan, however, because it would see the federal government seize control of 60 percent of national consumption tax revenue reserved for states and inject it directly into funding for state-run health and hospitals.
State finance ministers had warned Rudd's plan could become a precedent for the national government to raid their tax revenue for future reforms in other areas of state control, eroding their power even further, The Australian newspaper said Thursday.
Rejection by state leaders at a Council of Australia Governments (COAG) meeting next week will be a blow to Rudd's authority that could see swing voters lose faith in his promise to end years of damaging state-versus-national budget fights.
MAJOR ISSUE
"Rudd is trying to make health his major issue in the run up to the federal election. If his plan was knocked out of the water Monday, he would have to try to go down the referendum path, which is, to put it mildly, fraught," said veteran political commentator Michelle Grattan in The Age newspaper.
It could also impair Labor's momentum in other reform areas, including a controversial review of national taxation promised ahead of the May 11 budget, while Rudd's climate agenda is also close to death in the upper house Senate after several defeats.
The health row is another sign to voters that while Rudd came to power in 2007 promising big reforms, he has been unable to carry his argument in parliament. In health, he has been unable to convince even states aligned with his own ruling Labor.
"The unstated question being fought over is who is running Australia," said the mass-selling Daily Telegraph newspaper. Former West Australian Premier Geoff Gallop said Rudd may have to trim his reform agenda ahead of national elections. When the May 11 budget and associated upper house hearings are removed, only seven Senate days will be available to Rudd between April and mid-August, in the shadow of the likely election campaign.
Finance Minister Lindsay Tanner said the takeover would improve the debt position for states like Queensland and "transform their financial outlook in the medium to longer term."
Credit-rating agency Standard & Poor's last year downgraded Queensland's debt rating to Aa1 from Aaa, as the mining-reliant state struggled to balance its budget after the global downturn. Moody's rates the outback Northern Territory at Aa1. Grattan predicted Rudd and state leaders were unlikely to reach any final agreement Monday, further frustrating Rudd.
"It will mean the haggling will go on. He would like to be able to claim a clean victory. An inconclusive result would not even allow him to mount his high horse," she said.
(Editing by David Fox)
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