What began life in 2007 as a clever piece of political opportunism by new Opposition Leader Kevin Rudd to outflank the Howard Government on health comes to a climax of one kind or another today.

This issue has been about political theatre as much as, and sometimes more than, good policy from the outset. It was political theatre when John Howard was said to have pulled off the brilliant tactic of taking over the Mersey Hospital near Launceston (too bad his health minister messed it up). And it was political theatre when Kevin Rudd declared he’d go to a referendum if the states didn’t cooperate on improving hospital services.

Now the theatre has overtaken the substance. This morning’s media coverage felt like the red-carpet prelude to the Oscars.

And the winner is? Some observers reckon Rudd desperately needs a win today because he didn’t have a win with the CPRS and he has built up the need for health reform so much. It’s funny logic, because voters know the only reason the CPRS didn’t get up is because most of the Liberals welshed on their deal to pass it, but let’s play the game anyway.

As we know, Rudd spoke about going to a referendum in 2007. A referendum is, we’re told, messy, and unnecessary, and would fail, because the states would oppose it, and Tony Abbott would oppose it, and just, well, you know, referendums always fail. I can see the Twitter hashtag already.

The numbers say otherwise.  A steady stream of polling has shown strong support for the Rudd plan.  New polling today from Essential Research shows 56% of voters want the states to agree to the reform package, compared to only 26% who believed they shouldn’t. There’s some solace for John Brumby, however, with Victorians having the lowest level of support – 45% to 32%.  But Mike Rann can also feel vindicated – 75% of South Australians back the Rudd plan.

It has such strong support because for years the media has bombarded voters with the message that our hospitals – part of one of the world’s best health systems – are disaster areas. Doctors, nurses and health professionals in general, who have a vested interest in more money being pumped into the health system, invariably stand ready to back this claim up. People are convinced state governments aren’t particularly good at delivering health services.

But let’s just pause there for a moment.

What do state governments actually do? What is their purpose, apart from reminding us of white Australia’s origins as a collection of British colonies? Their only real purpose is service delivery, funded by the Commonwealth because they don’t collect much tax any more, except nuisance taxes.

And if voters think they can’t deliver services competently, what then?

This is partly why the two largest states are objecting to the elements of the health package that take state governments out of the financial equation and direct money straight to local hospital networks. Kristina Keneally and John Brumby want to keep the money flowing through them, so a little of it will stick to their fingers – but also, one suspects, because if it doesn’t flow through them, what role do they have?

That problem becomes a lot bigger if we eventually move to 100 per cent Commonwealth funding (we await, of course, a commitment from some enthusiastic backbencher for “110 per cent Commonwealth funding”).

Bit by bit over recent decades the states have lost their purpose. Centralist governments of both persuasions in Canberra have encroached on turf once the preserve of state governments. The High Court has repeatedly ruled in favour of Canberra when that process has been challenged. The High Court even stripped the states of their right to levy some taxes. Some states have even voluntarily surrendered powers to Canberra. Currently, one of the most important micro-economic reform tasks of this Government is the elimination of interstate regulatory differences, in effect to remove the point of having separate state legal and regulatory frameworks.

Labor has always had a reputation for being ideologically centralist. Now the Liberals are centralists too. In 1988, the Coalition derailed a Hawke Government referendum to recognise local government by peddling a conspiracy theory that Hawke had an agenda to replace state governments with small, locally-based regional administrative units. Two decades later, there are plenty in the Coalition, including its leader, who think that’d be a bloody good idea in the primary state government service areas of health and education.

The primary function of the states now seems to be to block economic reform. States continue to disrupt attempts to provide business with regulatory uniformity. Victoria continues to sabotage the development of a national water market. South Australia opposes legal reforms it objects to. Buying off their opposition through COAG adds billions to the Commonwealth budget.

If we end up with a referendum on health, it should really go further and become a referendum on just what the point of state governments is. It isn’t the GST that should make the premiers fear the “thin end of the wedge”; the entire purpose of their existence is in question.