Federal Treasurer Joe Hockey has ruled out an increase in the GST as a way to cover a $57 billion hospital funding shortfall required to achieve his surplus budget vision, but refused to identify other funding sources.
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On Saturday, Fairfax Media revealed patients could bear the brunt of the major shortfall, possibly having to endure longer waiting times in emergency departments, greater distances to hospitals, and less access to beds.
The $57 billion funding gap, that threatens to blow out state budgets, lies behind the budget turnaround projected by Mr Hockey in the Intergenerational Report, released earlier this month.
"Well patients are taxpayers. It comes out of the same pocket. And ultimately taxpayers ... are going to have to bear the costs of increasing healthcare, particularly as we live longer," said Mr Hockey.
"We certainly have no plans [to increase the GST]. And I know Mike Baird has no plans to lift the GST. In order to change the GST you need the agreement of all the states ... and clearly that's just not happening. Obviously we need to look elsewhere," he said.
Mr Hockey avoided identifying other options to close the funding gap, instead, talking again about the "budget mess left behind by the Labor government".
Premier Mike Baird said during a NSW election leaders' debate on Friday that he had made his displeasure about the potential loss of $2 billion federal hospital funding over four years publicly and privately known to Prime Minister Tony Abbott.
He said NSW's health budget was the biggest expense growing at the fastest rate and required commonwealth assistance.
"We've argued that we can't do it alone. What we've agreed is that it will be part of the white paper discussion on federalism and taxation," he said.
Mr Hockey, during a visit to small business Five Dock Meat Market with Federal MP Craig Laundy and curiously - two weeks out from the NSW election - without state Liberal MP Anthony Sidoti whose office was across the road, said he understood the states were going to have to deal with significant costs in running hospitals.
"We invited the states to participate in the Intergenerational Report. For one reason or another they chose not to," he said.
"We are obviously prepared to sit down with the states to discuss the issues, because ultimately, whether it's a state government or a federal government, the taxpayer will have to pay for the hospital system."
The federal government is booking savings of $57 billion over 10 years as a result of dismantling the hospital funding system put in place by Labor, and from 2017 moving to a new system in which states receive block grants that are adjusted for population growth and inflation as measured by the consumer price index.
The Victorian government says it stands to lose around $13 billion over the next 10 years, but Victorian Treasurer Tim Pallas said this week he would not push for an increase in the GST to fund the shortfall.
Australian Medical Association president Brian Owler said it was inevitable the changes would have a big impact on frontline services.
with Dan Harrison and Gareth Hutchens
