Tony Abbott unmoved by fury of premiers over cuts to states' funding
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Version 0 of 1. Tony Abbott is staring down angry premiers who are demanding a special summit to discuss $80bn in cuts to federal hospital and schools grants that will leave states with little option but to raise their own taxes or back an increase in the goods and services tax. Furious premiers including Queensland’s Campbell Newman, Mike Baird of New South Wales and Victoria’s Denis Napthine demanded an immediate meeting of the Council of Australian Governments (COAG) over the cuts in forecast federal funding. But a spokeswoman for the prime minister said COAG had just met and if premiers wanted to raise any matters with Abbott they could “do so in the usual way”. Before last year’s election Abbott insisted he was on a “unity ticket” with Labor on the Gonski school funding deal and repeatedly promised parents could “vote Labor or Liberal and get exactly the same amount of funding for your school”. But treasurer Joe Hockey said premiers and voters should have known the cuts were coming. “Kevin Rudd and Julia Gillard signed up to bolt-on agreements on Gonski and hospitals with a huge increase in funding … we said we would fund four years of Gonski and that was it, on hospitals we said we would honour the health funding as at that time, but the fact is it was unsustainable,” Hockey told the national press club. Both Abbott and Hockey spent the day after their first budget arguing it would now be up to the states to figure out how to raise the money to meet the growing costs of financing the hospitals and schools they run. Abbott said the federal government believed “the states should take more responsibility for their public hospitals and for their public schools, and we make no apologies for wanting the states to be grown-up, adult governments that take responsibility for the programs that are theirs, for the institutions that they run”. Hockey said that since states were the sole recipients of the GST, they would "have to run the argument". "They want to increase funding in their areas of responsibility, then they’ve got to run the argument on the GST … The states don’t want to be associated with the pain of raising taxes to pay for the increased expenditure in their areas of responsibility," he said. Premiers said they had no idea cuts of this magnitude were coming. Baird, a good friend of Abbott, said the move was “a kick in the guts to our state” and accused the commonwealth of “outsourcing” its budget problems. Newman said the “whole thing seems like a wedge to get the states to get the GST to be raised” and had been “done in a non-transparent and non-upfront way. The commonwealth is not putting their shoulder to the wheel." Napthine said he had been “surprised and shocked” by the extent of the changes. During question time both Abbott and Hockey denied they had broken any election pledges, despite having clearly promised “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to ABC or SBS” – all things that have now happened or are in prospect. Labor branded it a “budget of deceit”, with the opposition leader Bill Shorten due to deliver his detailed budget reply on Thursday night. The government is also staring down the Senate, where its $7 Medicare co-payment and changes to pension eligibility and the pension age appear destined to fail. Each is opposed by Labor, the Greens and the Palmer United party. Abbott said on Wednesday he would negotiate with the Senate to some extent, but did not believe the Senate crossbench would ultimately force too many changes because they would be likely to lose their seats if budget policies were blocked, resulting in a double dissolution election. “We’re happy to talk respectfully to the independents and the minor parties in the Senate, and obviously a certain amount of horse trading is something that you just accept is part of the business, but what we won’t accept is an attempt to completely frustrate the business of government,” Abbott said on Sydney radio 2GB. He said he didn’t think the smaller parties and independents in the Senate would push things too far because “hardly any of them would win their seats [in a double dissolution election] … this lot of independents would not keep their seats … so I think they will sit down with the government and negotiate.” Other budget measures hang in the balance. The Greens had said they would back the reindexation of fuel excise, but now say they want to remove the connection between the petrol price rise and new road funding, and instead direct the money towards public transport. Labor is not ruling out support for the 2% deficit levy on those earning more than $180,000 a year, saying its priority was fighting the “dismantling” of Medicare and changes to pensions. Clive Palmer said a new election was “not uncalled for” because the budget was “a disaster for Australians” containing measures that were “heartless and cruel”. The mining magnate accused the government of exaggerating the nation's debt levels to manufacture a crisis and justify moving to "a total capitalist economy" in which money, not people, was all that mattered. |