South Australia will go to war with Canberra over its plan to tear $80bn out of schools and hospitals
PREMIER Jay Weatherill will attend a crisis meeting with other state premiers in Sydney on Sunday afternoon to discuss their battle plan to fight the Federal Government Budget.
PREMIER Jay Weatherill will attend a crisis meeting with other state premiers in Sydney on Sunday afternoon to discuss their battle plan to fight the Federal Government Budget.
Mr Weatherill declared, yesterday, that SA would go to war with Canberra over its plan to tear $80 billion out of schools and hospitals and is calling for an urgent meeting of all state premiers.
The move will eventually save the Federal Government more than $20 billion a year — with SA losing $5.5 billion — and has set the scene for a GST increase as desperate states are forced to fill the gap.
NSW Premier Mike Baird said most of the country’s Premiers would attend his roundtable forum.
In the Budget the Federal Government revealed it will overhaul the Federation and fundamentally shift the responsibility for funding health and education to the states by reducing expected spending over the next decade.
The Premiers ganged up on Wednesday to attack the plan — which they were not consulted on — and Premier Jay Weatherill said he would spearhead a national campaign to overturn the Budget.
After holding an emergency Cabinet meeting on Wednesday morning, he said he wants an urgent meeting with the other Premiers and chief ministers, and a crisis meeting of the Council of Australian Governments.
“I am prepared to lead this national fight,” he said.
“This Budget makes it clear for whom the Liberals govern — they govern for the privileged and advantaged sectors of the community and have utterly abandoned those who rely on the support of the government, the elderly, the sick, students, and people seeking work.
“At the heart of this Budget is a deep dishonesty; there are illusions and distractions that have sought to remove attention from the deep cuts to health and education that amount to $5.5 billion cuts in SA over the terms of the agreements.”
Treasurer Tom Koutsantonis said the Federal Government wanted to “starve our hospitals and schools to fit an ideology” and would force a complete rewrite of the state budget.
He rejected the idea of increasing the GST. Health Minister Jack Snelling said it would mean the closure of almost 600 beds and Education Minister Jennifer Rankine said it would gut Gonski.
The Budget describes the need for “more realistic funding arrangements” that change the way Commonwealth funding increases over time, so from 2016 there would be a rapid drop off compared to the levels previously promised.
Increasing GST is the obvious way for states to raise more money, and the Federal Government is content to leave that conversation in the states’ laps.
GST is a particularly potent issue in SA, as any discussion of changes to the current system prompts calls for the bigger states to get more, leaving SA with less.
Queensland Premier Campbell Newman declared the Budget a “political wedge” on the GST and called for an emergency COAG meeting.
“The first ministers I’ve spoken to are pretty annoyed about that,” he said.
NSW Premier Mike Baird described the Budget as a “kick in the guts”, and NT Chief Minister Adam Giles said he would fight the move.
But WA Premier Colin Barnett, whose state stands to benefit if there are changes to the GST, called for “some re-sharing of national financial taxation”.
Victorian Premier Dennis Napthine said they would not argue for a GST increase, but would argue for a bigger share for Victoria.
Even former Liberal Prime Minister John Howard waded into the fray, saying the current GST was “inferior” to other countries’.
“I am in favour of returning fundamental tax reform,” he said.
Treasurer Joe Hockey said the former Labor Government had committed to funding increases pretending Canberra was a “honeypot”.
“It’s unsustainable. We don’t run hospitals. We don’t run schools. The states do. And if they want to have additional funding — bearing in mind that over the next 10 years we have committed to increase in real terms our contribution to hospitals and schools — this is a bonus that was there provided by (former Prime Ministers) Gillard and Rudd.”
He said they would take any potential GST changes to the next election.
SA Senator Penny Wong called the Budget a “vicious assault on middle Australia”.
“Tony Abbott said before the election no cuts to health and no cuts to education and the centrepiece of his Budget is an $80 billion cut to health and education over ten years,” she said.
“It’s been done so cynically. The Government says we’re cutting this but the states can make it up. Well the states can’t make it up. In SA this will affect hospitals, it will affect schools, it really shows Tony Abbott simply lied before the election.”
Prime Minister Tony Abbott also said the Commonwealth was not planning a GST increase but that the states were free to argue for change.
SA Liberal frontbencher Jamie Briggs echoed that sentiment.
“If the states have revenue issues and they think the GST is a way to solve that then they should make that argument — we’re not going to make it for them,” he said.