Public hospitals are facing a budget crisis as federal and state governments bicker over funding, the Australian Medical Association (AMA) has warned.

The Association’s annual public hospital report card found emergency department waiting times had worsened slightly, with 68 per cent of “urgent” emergency department patients seen within half an hour.

Of all emergency department visits, 73 per cent were completed in four hours or less, well short of the 90 per cent target for 2015 set by state governments.

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The number of hospital beds increased slightly, but not enough to meet growing demand.

Elective surgery waiting times improved marginally, with the average patient now waiting 35 days for surgery.

But that figure has deteriorated since 2001, when patients waited only 27 days on average.

AMA president Brian Owler said most state governments had made a concerted push to reduce hospital waiting times, but the “disappointing” report card showed they were struggling to cope with growing demand.

Professor Owler attacked the Federal Government’s efforts to force the states to bear a larger share of health costs by fixing its own funding increases to indexation and population growth.

“The states are facing a hospital funding black hole from next year, when the growth in federal funding slows,” he said.

“In a struggling public hospital system that’s failing to meet its performance targets that sort of slowdown in funding growth will mean that they will be under further strain, and I think we’ll start to see further clinical services being cut.”

He also said the Federal Government should not cut income taxes while the public hospital system remained underfunded.

Treasurer Scott Morrison is working on a tax white paper canvassing possible changes to personal and corporate tax arrangements.

The Government has not revealed its final plans, but Professor Owler said Mr Morrison’s suggestion that cutting income tax could boost jobs and growth was concerning.

“What we want to see is any revenue that is raised is kept in health, and we’ve seen some worrying comments from the new Treasurer Scott Morrison saying that he wants to fund personal income tax cuts — now that is not what that discussion was about,” Professor Owler said.

“It’s crucial that if we get any extra revenue then it go into health, because that’s what it was promised for, and that is where it’s needed.”