Court makes Rudd health options harder

IT WOULD would take just one word – “health”.

If that word were added to the list of Commonwealth powers in Section 51 of the Constitution, Prime Minister Kevin Rudd would have the chance to change Australia’s health system along the lines suggested in this week’s report by the National Health and Hospitals Reform Commission.

Without that word he will have a hard time of it.

But getting that word inserted would require a constitutional amendment – perhaps even more difficult.

The reason Rudd will have a hard time without a constitutional amendment is that since he made the promise before the 2007 election to fix or take over the public hospital system, the High Court has reinterpreted the rules.

Hitherto, there was a good argument that for practical purposes the Commonwealth Government could spend money on whatever it liked, provided the Parliament approved. Certainly the Commonwealth has behaved that way – handing out money in all sorts of areas outside the list of Commonwealth powers set down in Section 51 of the Constitution. Health and education, for example, are not among those powers.

Never mind. Usually, when a Government hands out money, people take it. They do not challenge the constitutionality of the gift. That is, until Brian Pape came along earlier this year and said the Government had no power to hand him $250 under the third economic stimulus package. He took his case to the High Court.

Last month (July), the court rejected the Commonwealth’s proposition that the Government could spend money on whatever it could get Parliament to approve.

It ruled that the constraints upon what the Commonwealth could spend money on were tighter than earlier thought and that ordinary citizens and certainly the states could challenge the spending in a wider set of circumstances than earlier thought.

It rejected the idea that the Government could spend money on national projects because of the character and status of the Commonwealth as a national polity or because of the existence and character of the Commonwealth as a national government.

It held that the Commonwealth could spend money only on the things listed in Section 51 and beyond that its spending was limited to such things as national emergencies and activities that only the national government could deal with – not just as a matter of convenience or efficiency, but as an objectively testable proposition that only the Commonwealth can do it.

The states agreed that only the Commonwealth could deal with the global financial crisis with emergency measures. As it happened, the court said the hand-outs were valid even under its new tighter interpretation.

That is not going to be the states’ position with health. At least two Premiers have rejected central control for health or giving up their public hospitals. Further, the new case makes it plain that the Commonwealth has no power to given money directly to the private health sector or for general prevention programs. It would have to give it through the states.

The difference between the position before the Pape case and now is that before it was thought the Commonwealth would be able to take control of the national health system as a national project.

Now the Commonwealth has to fall back on exercising its will through bribery to the states and through co-operation. The Commonwealth has always been able to give money to the states with conditions attached under Section 96 of the Constitution and it has always been able to come to agreements of sorts. But this has been unsatisfactory, often degenerating into buck-passing and name-calling.

The Commonwealth can use the social security power to hand out medical, hospital and dental benefits. That power was granted to the Commonwealth by referendum in 1946.

In all, though, without the Commonwealth getting extra constitutional power, Australians will have to put up with a system laced with duplication, a lack of cohesion and a lack of accountability and responsibility.

What are the chances of the Commonwealth getting power over health, or more power generally to deal with the duplication and waste? Fairly slim, on the face of it, given the record.

That record is not merely than only eight of 44 referendums have passed – 18 per cent; but that only two (social security and Aborigines) of 20 seeking extra federal power have passed – 10 per cent, and one of those was arguably under a guise. So the people do not like giving the feds extra power. The other referendums were all procedural.

That said the model for the successful social security referendum could be built upon. The Commonwealth did not just seek power to hand out social security. It first legislated for a pharmaceutical benefits scheme and waited for the challenge. It was held unconstitutional by the High Court. The people liked the scheme and did not like the court over-turning it.

If Rudd just legislated and appropriated money for fixing health as if he had the power and waited for someone to challenge it he might be in a better position.

“Look, I tried to fix this mess,” he would say, “But the Constitution, the medical profession, the courts and the vested interests prevented me. So if you want a decent health system you will have to give me the power to give it to you.”

Possible, but it will take time and political capital, so it is not likely. The risks are too high of losing and the Coalition would oppose it – grasping any opportunity to get a win.

But, on the other hand, the landscape is different now. Before the Pape case the most effective way for the Commonwealth to get around constitutional difficulties was to hand out money. That option is not as easy, so the Feds might have to seek formal power.