The Generator

Kevin Rudd has committed his government to funding 60 per cent of public hospitals direct to local community boards via a grab for 30 per cent of the states' GST revenue.

He's promising that new accountability and national performance benchmarks will deliver the changes voters want to surgical waiting lists, doctor and nurse shortages, waiting times for emergency treatment and availability of medical care outside hospitals.

It's also designed to end the blame game between the federal and state governments over health funding.

Once again Rudd has put himself at risk by staking his reputation on a proposal that is going to be difficult to get past the states, has fallen behind his own schedule of election promises, is a complicated process, carries a huge price tag and is arm's length from addressing the real problems voters experience every day.

It's also a process-driven solution that depends on solving currently intractable problems such as doctor shortages by managerial incentives and isn't what the public thought Rudd had promised in 2007 when he said he'd take over public health.

Like the emissions trading scheme to address climate change, this proposal has the potential to offer great hope that can nevertheless sink when people begin questioning how it could directly and positively affect their wellbeing.

It also carries with it the threat of a referendum on federal powers over health, to be held at the same time as the election.

A referendum battle is distracting and draining for a government and doomed to fail if it does not have bipartisan support and the backing of the states.

There is also the issue of priorities for the next election, with health overtaking climate change, which Labor has suggested could form the basis of a double-dissolution election and an effective "referendum" on the "greatest economic and moral challenge of our time".

Hospital reform is something that has been necessary for ages and strikes a deeply responsive nerve with the public. It is also something the Prime Minister put at the middle of Labor's last election pitch in 2007.

Voters took him at his word last time and he's asking them to do so again at his peril.