After spending all its money on racetracks, football teams, spin doctors, car racing, various consultants, ex gratia payments, designing new hospitals with water views that were never going to be built, and of course Gunns, the Tasmanian state government no longer has any money to throw away on frivolities like health. The logical federal government response to this is naturally to further cut funding to teach the state government a lesson.
Remember when Kevin was going to take over the health system entirely? What happened to that idea?
What happened to it? Someone noticed it was a good one and promptly tossed it.