Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline the important changes to Commonwealth-state financial arrangements which the government has put in place as part of efforts to modernise the Australian Federation?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I certainly welcome the question about the reform of federal-state relations, which are so important to the long-term prosperity of this economy and its capacity to create wealth. This week will be a very important week in terms of modernising our Federation and putting an end over time to the blame game that has bedevilled so much that has gone on in this country when it comes to education, infrastructure and health. On Friday I will meet all state and territory treasurers to negotiate reforms to Commonwealth-state relations across a range of areas—not just health, not just education, but disability, housing and so on. The meeting of treasurers will be followed by a formal meeting of the Council of Australian Governments on Saturday. Over the past few weeks, I, other ministers and the Prime Minister have engaged in quite constructive discussions with all of our colleagues across all of the states, because we recognise that there are great challenges out there which do require the reform of federal-state relations and particularly a 21st century reform to health and education.

I am convinced that we are now putting forward a framework to change the structures to make the Federation work more efficiently. Firstly, we have reduced the number of specific purpose payments from the Commonwealth to the states from over 90 to just five, reducing waste and duplication. Secondly, in a significant break with the past we have committed to using incentives to drive reform at the state level. This will be through national partnership payments. These payments will be used to deliver specific economic and social reforms, particularly in health and education. Also, we have agreed to use information to drive better accountability and we will independently measure how the states perform across agreed indicators. This, too, is a first. We have every confidence that these changes will help us build a more productive national economy and deliver better services for all Australians. These reforms will be backed up with a funding package which is appropriate, given the fiscal environment we face. But we will not shirk the hard reforms that those opposite shirked. Access Economics today really pinged all of those over there. There was very colourful language about what they did with the product of the boom, or what they did not do with it, which was to put in place the necessary reforms for the future. The reform of federal-state relations is a very important part of that, and we look forward to that occurring this weekend.