Prime Minister Kevin Rudd has confirmed he is moving to seize control of hospital funding from the states.

It was revealed earlier this week that funding will be directly provided to regional health authorities, which will be in charge of running public hospitals in their districts.

The idea makes sense, although planning and implementation presents a significant challenge.

The Commonwealth has not exactly covered itself in glory recently when it comes to delivering programs and services.

Retaining the core of the state bureaucracy and converting different systems into a national model appears the best option, albeit a difficult one to achieve seamlessly in a short time.

It is said the states will be unable to fund their health services from their own tax base within 20 years.

And the cost of delivering health care is only going to escalate with the ageing population.

It’s vital to the national interest that all states cooperate to achieve the best outcome because the current funding arrangements are flawed and doomed to ultimately fail.

The Federal Government continues to inject extra money into the health system, but cash-strapped State Governments are not always capable of investing it and managing it.

It’s been claimed the NSW government has slashed its own funding to the hospital system by $700m because of budget problems.

Health is not a discretionary budget item; it’s an essential matter of life and death.

He attacked the government over its spending program and said Labor had failed to deliver on key promises.

Here is the full text of his speech:

Just before he went on holiday in January, Prime Minister Rudd declared that over the coming year the Government would be devising a “clear plan for the country’s future” with “real action on the ground”. Searching for a vision for the future with clear steps toward its achievement is normally the task of an opposition. Mr Rudd’s admission that a two year old government is still trying to work out what its real agenda might be suggests that even the Prime Minister himself worries that he’s been all talk and no action.

Refreshed by a fortnight off, and perhaps buoyed by the announcement that he had co-authored a children’s book, Mr Rudd began last week to tell us what his “clear plan” was. In what purported to be seven different speeches, but was little more than the same speech repeated seven times with the paragraphs arranged in different order, he said that the Government’s plan was to boost productivity and to cut the growth of public spending.

The Prime Minister must have drafted these speeches himself because no professional speech writer would have produced such leaden prose. As well, in three key respects, these speeches were pure Rudd. First, they were about the action that the country needed to take by 2050 rather than the specific decisions that the Government intended to implement now. Second, the Prime Minister outlined what needed to be done without bothering to say how it might be achieved. And third, the things that Mr Rudd committed to achieve are so at odds with what he’s actually doing. Planning for 2050 is important but the Prime Minister shouldn’t use a discussion about the future to mask his broken promises from the past and his neglect of tough decisions today.

Boosting productivity is vital to Australia’s economic prospects but it’s not going to be achieved by hitting the economy with a great big new tax disguised as a policy to save the planet. Productivity growth means taking on the unions to reform the waterfront, as the former government did in 1998. It doesn’t mean workers in Western Australia on $150,000 a year going on strike, as they did this week, to demand that they always stayed in the same hotel room. In seven speeches running to more than 20,000 words, Mr Rudd invoked the need for increased productivity dozens of times without once explaining how he intended to achieve it.

It doesn’t matter how many times the Prime Minister says he is committed to it, fiscal restraint is inconsistent with running the biggest spendathon in Australia’s history. A government which spends intelligently in response to a crisis is just being prudent. A government which spends too much, too soon and then keeps spending once the crisis has passed is addicted to soft options. Last week in Brisbane, for instance, having said that the Government wanted to deliver a “permanent structural improvement in Australia’s public finances”, Mr Rudd then detailed a shopping list of new spending coming to at least $16 billion in Queensland alone. Among the 20,000 words, Mr Rudd could not offer a single specific example of how he intended to cut spending or even to limit its growth.

The Prime Minister is preaching productivity while making it much harder for small businesses to manage themselves and preaching economic responsibility while always dodging tough decisions. In Hobart, for instance, Mr Rudd said that his determination to ensure fiscal sustainability would not be popular. I challenge the Prime Minister to nominate a single unpopular decision that his Government has taken. Posting out cheques and funding school halls is not exactly courting unpopularity. Increasing the pension age in 13 years time is not a tough decision. Signing the Kyoto Protocol and apologizing to Aborigines might have been overdue decisions but they certainly weren’t tough ones.

Spending the money that his predecessors accumulated and then borrowing against it, even to avoid a recession, makes a prime minister lucky rather than an economic genius. The kindest thing that can be said about a prime minister who is first a self-proclaimed “old-fashioned Christian socialist”, subsequently proud to be an “economic conservative” and more recently the scourge of “free-market fundamentalism” is that he has no deep economic principles at all. The risk in being such a chameleon is that voters might conclude that Mr Rudd is not really fair dinkum about anything.

Certainly, no promise is so important, no priority so urgent and no moral imperative so pressing that Mr Rudd can’t put it aside to focus on something else. He promised to reduce prices by introducing fuel watch and grocery watch but hasn’t. He promised not to means test the baby bonus and the private health insurance rebate but has tried to do so. He promised to take over the public hospitals if their performance didn’t improve, to stop Japanese whaling and to take the President of Iran to the World Court but he has neither begun to implement these commitments nor announced a change of mind.

He promised that his workplace relations changes would leave no worker worse off and no employer facing higher costs. Instead, even unions now say that some aged care nurses face a $300 a week pay cut and hospitality workers in some states will lose $3 an hour. As well, because pharmacy costs will soar, patients are at risk of losing access to prescriptions late at night and on weekends.

Mr Rudd hasn’t built the 35 superclinics and the 260 childcare centres that he promised. Not only has he not built the 750 new houses and 2500 refurbished houses in the Northern Territory that he promised; he has hardly completed a single dwelling. He has broken his pre-election promise to build a national broadband network for $5 billion – only to make an even bigger one: to build a $43 billion government-owned national broadband network that was announced without even a business plan.

If there is one field in which this Prime Minister excels, it’s spending money. Spending $45 million on Territory housing without completing a single residence takes a special kind of genius. Why bother with actually building houses when that might stop the real business of government which is planning, consulting, reporting and facilitating; it’s media grabs, reviews and committees – all the things that Mr Rudd revels in but which make politicians busy rather than effective.

In just two years, Mr Rudd has increased government outlays from 24 to 28 per cent of GDP, in the process demonstrating that it’s much easier for governments to spend money than it is for them to make a difference. He is doing precisely what he says governments will have to avoid over the next four decades if Australia’s prosperity is to be sustainable.

Then there’s climate change. It’s an important issue but even if dire predictions are right and average temperatures around the globe rise by four degrees over the century, it’s still not the “great moral challenge” of our time – as Mr Rudd has described it on 14 occasions; let alone the “greatest” moral challenge of our time – as Mr Rudd has described it at least four times. I suspect that Mr Rudd and other climate change advocates resort to the language of morality in an effort to cast their opponents as bad people rather than just wrong. It’s a case of intellectual bullying. Adapting to changing rainfall patterns, for example, will be hard but it won’t supplant the threat of war, injustice, disease and want as the biggest problems with which humanity must grapple.

It’s hard to escape the conclusion that it’s the revenue consequences of the emissions trading scheme rather than its environmental ones that excite Mr Rudd and the Labor Party. It’s a great big tax, creating a giant slush fund, administered by a huge bureaucracy, providing endless handouts.

If climate change really is the greatest moral challenge, why didn’t Mr Rudd even mention it in his seven pre-Australia day speeches? If this really is the greatest enemy that humanity faces, how can it be enough to reduce emissions by just five per cent in a decade or by 60 per cent over four decades by which time the real challenge will surely be dealing with disaster rather than avoiding it? The Greens have a fair point here about the yawning gap between the Prime Minister’s rhetoric and his policy. Mr Rudd runs the risk of looking like an environmental televangelist: a morals campaigner protesting feebly against an evil that has already overtaken us; or worse, a hypocrite who emitted 1800 tonnes of CO2 travelling to Copenhagen with 114 courtiers to tell ordinary people that they had to cut their lifestyle.

The other day my colleague Greg Hunt requested that Mr Rudd host an international conference to develop a post-Copenhagen agenda for dealing with climate change. It sometimes seems that the best way to keep the Prime Minister in Australia might be to have an international conference here. Why shouldn’t some people have concluded that Mr Rudd is using the prime ministership as an audition for the top job at the UN? Perhaps a prime minister as accomplished as Mr Rudd would want to spend at least as much time running the world as running the country. I fear, though, for the Australian sense of the ridiculous when we still take at his own estimation a prime minister who spent four months out of the country in his first two years. A prime minister who is prepared to risk jet lag for Australia in this way must think that he’s forgiven demanding the little luxuries such as a hair dryer when visiting the troops in Afghanistan.

With less than 12 months to go till the next election, it’s now clear that the Rudd Government will be campaigning for a second term more on the basis of promise than performance. Mr Rudd’s promises to fix problems through greater spending and more cooperation with the states will inevitably be less effective the second time round. By contrast, the Coalition’s commitment to address our more serious problems rather than to fix everything, especially if there are clear pathways from problem to solution, should seem like sensible prioritizing rather than the benign neglect that it might have seemed in the dying days of the Howard Government. At the next election, the Coalition will no longer be running against itself – needing to outperform the best performing government in recent history. Instead, it will be running against the Rudd Government – perhaps Australia’s most over-hyped political outfit.

Unlike Mr Rudd and the Labor Party, the Coalition believes in smaller government, lower taxes and greater freedom. We also believe in a fair go for families and in institutions which have stood the test of time. By representing and reconciling the liberal and the conservative traditions, the Liberal Party has been Australia’s most consistently successful political party, at least at the national level. Our challenge is once more to tackle the big problems of modern Australia in ways which reflect these values and which resonate with most voters.

Over the past two months, the Coalition has made the transition from a government in exile unsure of its role to a confident opposition sure that the quality of government is rarely improved by people agreeing with it. The fiasco at Copenhagen, as even Ross Garnaut has described it, should finally have discredited the ETS. If the Government arrogantly insists, though, on again bringing forward this legislation, we will again save Australia from this economic and environmental own goal.

Still our task is not just to attack the Government. For voters to reject a one term government, they need to know how the alternative will be an improvement. This is what the Coalition has been working on over the past few weeks and will constantly be developing over the next few months. Unlike Mr Rudd, we don’t see more government and higher taxes as the answer to every problem. Often, the best solution to a problem is for government to do less better rather than more badly. One of the real problems in modern governance is the tendency to meddle in issues without resolving them. Often programmes will be created and organizations set up more to demonstrate a concern than realistically to make much difference.

For more than a century, for instance, the national government has fumed on the sidelines while the states have made decisions about Murray-Darling water that were in New South Welsh or Victorian but not in South Australian best interests. Numerous joint bodies have been set up but none, thusfar, has had the power over water allocations throughout the basin that’s necessary if everyone is to have a fair go. The next Coalition government will work constructively with the states as far as possible but, above all, will try to ensure that the government making decisions that affect everyone in the basin is the one government that is accountable to all of them. If necessary, we will seek constitutional change on this despite the conventional wisdom that referendums fail. By all means, let the Queensland or NSW Government argue, if it dares, that it should have the right to control Adelaide’s access to water but the Australian public is unlikely to be so parochial.

For decades now, well meaning governments have poured resources into tackling land degradation. The one thing that’s been missing is a significant labour force that can be consistently applied to the revegetation, weed and feral animal removal on public land that comprehensive land care requires. Creating a 15,000 strong standing green army to tackle local and regional environmental problems won’t be cheap but even at an average cost per participant of up to $50,000 a year, it’s less than 10 per cent of the economic churn created by the ETS and, unlike the ETS, it will actually make an environmental difference.

Next Tuesday, the Coalition will release a strong and effective policy on climate change. Our policy will deliver the same emissions reductions as the Government’s but it won’t involve a giant new tax on everything and it won’t involve higher prices for consumers. It will rely on incentives not penalties. We will take direct action to reduce emissions and to improve the environment while Labor wants to raise the price of electricity without necessarily cutting its use. The Coalition’s policy will be easy-to-understand, will directly address the problem and will have a comparatively modest cost. Labor’s policy, by contrast, is almost impossible to explain, purports to reduce emissions by raising prices, and will impose a $12 billion a year drag on the whole economy. I suspect that these contrasting polices will become a metaphor for the two parties’ different approaches to almost everything.

Over the next couple of months, I will make a series of speeches outlining the Coalition’s thinking on building a more productive society, delivering more effective services and making government work better. These will provide the rationale for the policies that the Coalition will take to the election. Our policies won’t be a lengthy shopping list of portfolio specific initiatives. Instead, they will propose better ways of tackling the big issues that are troubling Australian families in an uncertain and insecure world often made more difficult by the policies of the Rudd Government.

Unlike Mr Rudd, the Coalition understands that you can’t have increased government benefits and effective government services without a strong economy to pay for them. The former Government was able to deliver higher spending, lower taxes and a higher surplus because it put in place the reforms needed to make the economy more productive. Workplace relations reform, social welfare reform and financial services reform were not driven by free market fundamentalism, as Mr Rudd now claims, but by a clear understanding of what was needed to produce a better life for everyone. A government that’s prepared to make tough decisions, rather than just to talk about them, can subsequently afford to be more generous to its citizens.

Our reforms, unlike Mr Rudd’s, would not get bogged down in COAG meetings because we know what we want to achieve and would not be frightened to take on the state Labor premiers. In establishing the Green Corps, stabilizing the Job Network, expanding Work for the Dole, tackling lawlessness in the commercial construction industry, ending the medical indemnity crisis, lifting rates of bulk-billing, and extending Medicare to allied health professions, I have a proven record of getting things done in government. All Mr Rudd has achieved, after two years in the country’s top job, is running up debt and entrenching union power. It’s a precarious basis on which to seek re-election.

Of course, winning the extra 17 seats in parliament needed for victory later this year won’t be easy. Nevertheless, there are a number of marginal seats in which the sitting Labor member has been in political trouble. Especially in Queensland and in NSW, Labor’s proposed ETS will damage key industries in crucial seats. A series of government debt-driven interest rate rises could seriously hurt Labor in the outer metropolitan seats that swung to it in 2007. Then there’s voters’ wish to send a message to unpopular state governments. Although the Coalition will almost certainly be the underdog going into the campaign, as Premiers Jeff Kennett and Wayne Goss discovered, political favourites can be vulnerable to protest votes. For all these reasons, the Coalition can win the next election and that dawning realization seems to be making the Rudd Government more nervous rather than more focused.

It’s nearly 80 years since Australia last had a one term federal government. That seems to make victory unlikely; on the other hand, it could mean that we’re overdue for an upset. Rest assured that my team will be working very hard to ensure that Mr Rudd’s time is up sooner than he thinks.

All of them in fact, except John Brumby.

The Victorian Premier neatly placed himself beside the popular prince at all photo opportunities and fended off questions about the republic.

William won hearts and minds with his engaging personality and genuine interest in people. He reminded many of his mother.

There was a poignant photograph of William visiting Government House in Melbourne, inspecting a tree that was planted by the Princess of Wales in the early 80s.

Republicans were quick to deride the success of the visit as having no impact on their campaign.

However, a recent survey showed that support for a republic has dropped to 44 percent. Most of them would not be welded on supporters either.

The issue is a hot potato for Kevin Rudd and it will be interesting to see how he plays it.

There are many “true believers” in the ALP who want another referendum, which is doomed to fail while the Queen lives and monarchist Tony Abbott leads the Liberals.

However, Labor pragmatists know the issue is a vote killer and don’t want to push it.

One columnist in Melbourne suggested William would make an excellent choice as Governor. Brumby at least is smart enough to consider it.

For the record, here is the text of William’s Australia Day address at Melbourne’s Government House:

I would like to begin by acknowledging the traditional owners of the land, the Kulin Nation, and pay my respects to their elders, both past and present. Being in Australia is the realisation of a dream.

As far back as I can remember, I have heard from my family about the wonders of Australia and the hospitality and friendship of the Australian people.

My father had such a great time here at school – and is still misty-eyed about an immortal moment on Bondi, when an Australian beauty planted a smacker on his cheek. It’s good to see this tradition is continuing!

I also remember my mother coming back from her time here in 1996, telling me what a profound impression this country had made on her and how much she loved Australia.

Three days here and now I know why. And of course, there’s that other guy with the ginger hair, who just never ever stops banging on about you and how I haven’t lived because I haven’t been to Australia – blah, blah, blah.

Because of this, and because of the respect the world has for your unique way of life, your vibrancy, your straightforward ways, your classic sense of humour, I have been longing to return.

The last time I was here I was nine months old and seeing the world from a very low level; certainly not one from which to appreciate this awesome place.

What has struck me during this visit to the southern hemisphere is what “shared heritage” actually means.

It really is about core values and our way of life. It really is about humour and decency.

And it is also about courage and an ability to face down adversity. Today, on the outskirts of Melbourne, I was privileged to see the spirit of Australia in its purest, most magnificent form.

My family, along with millions around the world, followed the events of last February with a sense of horror which slowly, as the days passed, turned to one of deep, deep admiration for the steadfastness of the Australian people.

The stories of suffering I have heard today inevitably made me think about the ongoing tragedy of Haiti. Our thoughts and prayers remain with everyone there.

What an exciting place Australia is, though! This truly is a country for the 21st century. I only wish I had a little longer to see a bit more of Melbourne, this legendary city of sport and culture.

But if I may, I’ll be back!

So, coming to Australia is the realisation of this long-held dream.

To be standing here, in beautiful Melbourne, on a glorious summer’s afternoon, is one thing. But to be asked to address you at the state of Victoria’s Australia Day celebrations is a great honour for me.

Thank you for asking me to be here and making me feel so very welcome.

Happy Australia Day.

While Holding was being rescued from an icy mountain, Della Bosca was sliding down a slippery slope of his own making.

It’s hard to resist making moral judgments about a married 53-year-old man having an affair with a 26-year-old woman.

Nobody is perfect, but succumbing to a weakness of any sort says something about our character.

According to reports quoting the woman, the man who wanted to be Premier sacrificed work commitments to be with her. That’s not a commendable ethic.

As for Holding, it’s great that he was found safely. Hopefully the phantom Federal Police plane will be used more widely in future search and rescue efforts.

I’ve noticed in the safe Liberal seat of Barker (SA) that little-known Labor Senator Dana Wortley is the bearer of good news when it comes to hand-outs from the Dear Leader.

I can’t recall seeing this practice before.

Previously I believed it was a ministerial announcement, which seems appropriate for major news, or by the Opposition local member for smaller grants.

It’s like the government spin doctors have decided Liberal and National MPs simply don’t exist; the money distributed by Canberra is from the Dear Leader and not the parliament.

Fair enough to some extent, eg Building a North Korean Revolution was Labor’s idea, but why promote Senators that nobody has ever heard of?

Former opposition leader Brendan Nelson is the latest to spit the dummy.

His decision will force an expensive byelection in the safe Liberal seat of Bradfield.

Nelson claims the electorate “needs an energetic new advocate and representative, sooner rather than later”.

That may be so, but he won a mandate at the previous election and it’s his responsibility to honor that trust.

I wouldn’t support any proposal to introduce a Senate-style parachute, whereby the incumbent party replaces a retiring member with one of its own.

Proper byelections are a legitimate way of testing a government’s mid-term performance.

Labor is likely to sit on the sidelines in Bradfield, but it will be interesting to see how well the Liberal Party primary vote holds up.

I can’t imagine Malcolm Turnbull or the Liberal Party machine will be too pleased with Nelson. They now face the political risk of a backlash and the financial cost of an unwelcome campaign.

The Federal Council is meeting this weekend and apparently delegates will support moves to develop policies independently of the Liberals.

Good idea, funny it took them so long.

There was speculation in The Australian this week the Nationals may split from the Federal Coalition.

Good idea, funny it took them so long.

However, they won’t.

John Anderson is lamenting that his inquiry’s recommendation to merge with the Liberals has been rejected.

Good decision, funny it took them so long.

The Nationals under Warren Truss are now committed to being a strong voice for regional Australia.

Good decision, funny it took them so long.

There are only nine Nationals in the House of Representatives. On most occasions when there is a three-cornered contest the Liberals win. That has to change if the Nats are to be relevant.

There is a golden opportunity at the next Federal Election.

The two new seats in Western Australia will be up for grabs. With “royalties for regions” a popular policy at WA state level, ageing Liberal MPs Wilson Tuckey and Barry Haase are extremely vulnerable under new boundaries.

If the Nationals are fair dinkum they should also have a serious crack at Wannon in Victoria now that David Hawker has retired.

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If Catania were such a “rat” and “not up to the job”, it’s remarkable they tolerated him in the party room at all.

I met Catania a couple of times in Kalgoorlie and he impressed me as genuinely interested in regional issues and the mining industry.

He would obviously have been frustrated in the city-centric WA Labor Party, especially in opposition.

The reaction of WA Nationals leader Brendon Grylls was appropriately measured:

“I think that Vince Catania’s decision starts to represent the opportunity that elected members of parliament should start to work for the benefit of their electorate instead of the party room.”

Federal Nats leader Warren Truss missed the point: “The defection of a Labor MP to The Nationals in Western Australia is an ear-splitting wake up call to the ALP across Australia – continue ignoring the regions at your peril.”

Truss also proceeded to have a go at the Federal ALP.

This wasn’t a time to gloat or try to score political points.

The decision would have been tough for Catania within his family, among his friends and in parts of his electorate.

It’s a long way to the next poll, but I suspect the electorate will welcome having an MP in the government who belongs to a balance-of-power party.

The Nationals came second in the North West electorate last time. Catania’s defection gives them a strong foothold in the Mining and Pastoral region.

Catania deserves respect, rather than anger.

That happened in the South Australian Legislative Assembly recently.

I’m planning to write a newspaper article on the rare event, and will publish more here later.

Meanwhile, I’d be pleased to know of any precedents.

The truth of whether Rudd used his influence to help a supporter gain finance seems to hinge on a non-existent email.

And even if he did, what’s the problem?

I can’t find the section in the Constitution that says Prime Ministers aren’t allowed to represent their constituents.

If a Prime Minister abused that influence I think the voters are smart enough to see it and turf them out at the next poll.

Public servants have the right to disagree with ministerial requests and should exercise that right if they believe it’s appropriate.

If a bureaucrat felt the Prime Minister’s intervention was out of order they should report it to their superior and seek written instructions.