A question for George Megalogenis - Do we need the states?

George Megalogenis makes the point that states are in the service business. On his blog post NSW government: killing patients with cuts Richard Chirgwin writes:

It is, therefore, a little distressing to read in the Sydney Morning Herald that the austerity fanatics in the NSW want to add hospital outpatient clinics to the list of things they want to cut.

He goes on to write:

A point about the story itself: if the Herald thinks a private specialist visit only costs $300, it's completely deluded; first, because the private specialist doesn't have to constrain charges to the officially scheduled price; second, because those visits often include pathology. Shifting the path from the hospital to the private clinic means that service is also private.

Richard knows what he's talking about in this case because:

Those who know me - either in real life or on the Internet - will probably know that my wife has a chronic illness that keeps us intimately familiar with the inside of hospitals.

Describing things in full would take an essay, but the short version is that she suffers from an immune system disorder that has knock-on effects pretty much everywhere: at the last count, she's a regular with six specialists (immunology, gastro-enterology, vascular, renal, gynocology, dermatology). 

Let's get back to George Megalogenis. George has written that the Federal Government collects the revenue and the states are in business of spending that money in providing services to their citizens. Unfortunately, I don't have a link to these comments. However he did recently state:

The four largest components of the typical state budget are spending on health, education, transport and police.

Health and education tend to take 25 per cent each of total spending, while transport and police divide a further 20 per cent between them.

So, what happens when the states decide not to provide that service? I guess we then need to ask if we still need them. Don't get me wrong, I think it far better that the states provide these services than the Commonwealth. The states are far closer to the coal face and more likely to be aware of the needs of the community. The problem is that some of the states seem to be putting ideology and politics above responsibility and service delivery.