Why give the states a bribe

when most are in surplus?

Letter

The Australian

16^th January 2008

It's certainly welcome news to learn that the federal and state treasurers have agreed in principle to reduce the grossly excessive number of specific purpose grants to fewer than 20. But it appears that the main practical outcome of this first test of "cooperation" was to create a new SPP in the form of a health grant of $150 million to reduce elective surgery waiting lists and to distribute that grant in a way that did not please a number of states ("States do Swan's bidding on health").

The question that nobody seemed to ask is why it was necessary for the Commonwealth to make such a grant. Surely the cooperative spirit of the states could have stretched to an agreement to reduce elective surgery waiting lists without a bribe? After all,with most states running budget surpluses and receiving general purpose income of around $40,000 million from the Commonwealth, additional expenditure of $150 million to solve the alleged elective surgery problem would have been a mere drop in the ocean out of states' revenues.

In short, this first test of cooperation leaves something to be desired.