The Australian federal government may raise taxes to pay for an ambitious takeover of the nation’s ailing public heathcare system, local media reported yesterday.
Earlier this week, Australian Prime Minister Kevin Rudd proposed a US$45 billion funding takeover, aimed at reviving flagging support for his Labor government, by cutting long waiting lists for surgery in public hospitals that have long struggled for funds.
Rudd said the plan would be budget neutral, effectively moving to a centralized funding model from the current method of allowing the states to decide how federal health funds are spent.
However, the Sydney Morning Herald quoted federal Health Minister Nicola Roxon as agreeing tax hikes may be needed to meet “a significant extra burden” on federal health spending over the latter half of this decade.
Asked if there may be tax increases, Roxon said: “Well, it certainly means that there may be. We have to be able to fund the delivery of services in the future.”
The Australian newspaper also reported that Rudd could face opposition from within his own Cabinet on any new tax measures.
It said Rudd faced a backlash from government lawmakers over his plan to tie 30 percent of national consumption tax revenues to health spending. Currently, Canberra hands that 30 percent over to state governments for them to spend how they wish.
Rudd has said Canberra would take control of 60 percent of public hospital funding under his plan, which is also likely to run into opposition from state governments.
The prime minister’s opinion poll ratings have been on the slide against a resurgent opposition and the Australian newspaper said lawmakers from Rudd’s center-left Labor Party has begun questioning his handling of major reform challenges.
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