Morrison should call Queensland’s hospital bluff to blast open borders

Most Commonwealth-state interactions in our federation ultimately come down to an argument about money.

In the latest twist to the national cabinet’s COVID-19 response, Queensland Premier Annastacia Palaszczuk has managed to craft a dispute about Commonwealth funding of public hospitals. She says she is merely reflecting the views of all states and territories, but the others have not elevated the issue to the same level.

Palaszczuk sees border reopenings and increased Commonwealth funding for hospitals as two sides of the same coin. Opening the Queensland border to infected southerners would turn Queensland’s COVID-zero dream into a nightmare of thousands of cases and hospital admissions.

Prime Minister Scott Morrison describes this gambit as a “shake-down”. Whether it is or not, it is certainly a stunt.

Palaszczuk’s expectations of actually getting more Commonwealth funding are probably as close to zero as her state’s COVID-19 numbers, but lobbing the claim sure makes for another distraction from her iniquitous border restrictions and any failings in public hospital management.

Depending on which Queensland government spokesman one listens to, the state’s public hospitals are either under severe strain or ready for a surge of admissions.

But if they are under strain, it’s not because of COVID-19, which any state government spokesman will tell you.

If the alternative is more months of closed borders, the economic pay-off would be huge.

Any argument about federal funding at this time is curious, given the massive increase in funding over many years – which has turned assistance to public hospitals into the fourth-largest federal program – and the special 50:50 sharing arrangements for COVID-19-related costs.

But given Palaszczuk has made the connection between opening borders and getting more funding, perhaps Morrison should play along and call her bluff.

Section 96 of the constitution empowers the Commonwealth to make grants to the states, or any state, on such terms and conditions as it sees fit. Attach this to alleged public hospital pressures and border restrictions, and you have the perfect formula for a new tied grant to the states.

This would provide an increased Commonwealth share of costs resulting from a surge in COVID-19-related public hospital admissions on the condition that the recipient state’s borders are completely open, and remain so.

No state entry passes, no police checks at airports, and the minute a state reneges, the money stops flowing.

The federal Treasurer would no doubt groan at taking on yet more expenses. Increased grants for public hospitals in exchange for border openings are also a terrible policy in that they reward bad behaviour.

However, something is needed to blast the borders open. A conditional grant could be designed in such a way as to be strictly temporary and to minimise the costs to the Commonwealth. It should be prospective, not retrospective – sorry, New South Wales.

The condition should be that borders are open from whenever all the residents of a state have had the opportunity to be vaccinated, or actual vaccination has reached 80 per cent coverage, whichever comes first.

Queensland’s slow march towards 80 per cent should not be an excuse for delay if the vaccines are readily available.

If the alternative is more months of closed borders, the economic pay-off would be huge.

We are not just talking about Queensland here, but also South Australia, Tasmania and the Northern Territory.

The cash-flush west is less likely to be open to such a deal. (New South Wales, Victoria and the ACT will all reach 80 per cent vaccination within weeks and will remove border restrictions anyway.)

Ideally, none of this would be necessary. Either the states would come to their senses about borders, or the issue would be forced by a successful High Court challenge.

Flight Centre boss Graham Turner has threatened a fresh constitutional challenge, and good luck to him, but it may take months to reach a conclusion, even once it is started.

Palaszczuk is unlikely to accept an offer of a conditional grant, but it would at least be entertaining to see her bluff called.