Prime Minister Tony Abbott tells states: it’s time to do more

TONY Abbott says states must ready for “sensible adjustments” to funding, as state leaders planned their response.

TONY Abbott said the states must ready for “sensible adjustments” to funding arrangements, as state leaders convened an emergency strategy meeting.

Mr Abbott has stepped up his push to change federal-state financial relations, pushing the states to take greater responsibility for funding schools and hospitals.

The Prime Minister said existing arrangements would continue for the next three years as two white papers into the federation and taxation were prepared for changes.

Promising a “co-operative, consultative and collegial process” Mr Abbott said it was time for the states to do more.

“I am confident the end result will be a Federation that works better,” Mr Abbott told Sky News.

“I certainly think it’s important that we try to ensure that over time all levels of government are sovereign in their own sphere.”

“I want to talk to the states about sensible adjustments to our Federation to make it work better and I would like each level of government — more than is currently the case — to be sovereign in its own sphere.”

Treasurer Joe Hockey is also talking up the need to change federal-state relations.

“It’s hugely important the we realign the Federation and Tony Abbott is committed to doing that with the Federation White Paper and also the Taxation White Paper over the next 12 months,” the Treasurer told ABC News24.

NSW Premier Mike Baird will convene an emergency meeting of state leaders on Sunday to discuss the planned cuts to state government funding for schools and hospitals.

State leaders this morning spoke out against budget measures that would see less funding for health and education.

The budget papers say federal spending on health and education would be slashed by $80 billion over the next decade after current four-year agreements end.

“We are not going to continue indefinitely the cash splash that the Rudd-Gillard government agreed to. And we shouldn’t be bound by commitments that the former government made that were never affordable,” Mr Abbott said.

“At the moment the commonwealth doesn’t have any role in running public hospitals but we have a substantial role in funding public hospitals. Let’s see where these discussions go as part of the Federation White Paper.”

Mr Abbott dodged questions about whether this would mean a change to the rate or scope of the GST to give the states extra money.

“We’ve said that nothing will change here, we have no plans for change here. And frankly I want the process to start before I engage in all sorts of speculation,” he said.

Bill Shorten said Mr Abbott’s aim was trying to create “the perfect storm to force the states to demand a GST” increase.

“You probably could hear a pin drop in the premiers’ suites all around Australia (when the budget was handed down). The Abbott government is systematically going in the next 10 years to starve our hospitals and schools,” the federal Opposition Leader said.

Victorian Premier Denis Napthine lashed out at Mr Hockey’s first budget, warning he had left behind a “hidden landmine’’ on concessions for seniors and the less well off struggling to pay water, transport and power bills.

Queensland Treasurer Tim Nicholls said emergency patients and schoolchildren would be the hardest hit.

Dr Napthine today vowed to plug what he claimed was a $300 million concessions shortfall as part of the budget cuts imposed by the Abbott government.

He also revealed he had a heated conversation with Mr Abbott this morning.

In markedly stronger language than yesterday, Dr Napthine said in the first year Victoria would be up to $75 million short next financial year for a program of concession payments crucial to its cost of living credentials.

The cost of the cuts over the forward estimates would be $300 million over the forward estimates, he indicated.

Hitting out at the budget, Dr Napthine said: “Let me assure concession card holders, we will not let them down, we will make sure those concessions are delivered in full.”

“We will have to pick up the difference out of our own budget. He said the decision ended a 21-year agreement without consultation.

“This is just another hidden landmine in the federal budget,” Dr Napthine said.

Dr Napthine denounced the failure of the commonwealth to consult over the cuts.

“Making decisions that impact from the first of July, six weeks down the track, after we’ve produced our budget is unreasonable, unfair and certainly not the best way to develop a relationship,” he said.

The Victorian government has been debating internally how to deal with the fallout from the budget, facing a poll on November 29.

His initial response yesterday, while critical, was more conservative than those of NSW and Victoria.

The government is grappling with the political cost of the budget and the political cost of two Coalition government being at war over the budget.

Victoria has the strongest finances of any government in Australia and has a strong anti-tax increases agenda.

Dr Napthine wants a fairer share of the GST distribution, which sees Victoria receiving less than 90 cents in every dollar collected in Victoria.

“We are being robbed and dudded under the current distribution of GST,’’ he said on Wednesday.

“It’s absolutely unjust that we get a lesser share of the GST than Queensland and NSW.’’

He also called for Canberra to honour the Gonski education deal and counselled against big cuts to health.

He said he had been “surprised and shocked’’ by the extent of the cuts to health and education and was concerned that the GP co-payment could lead to cost-shifting in emergency departments.

Mr Nicholls is warning of longer hospital emergency waiting times and fewer teachers following sharp federal budget cuts.

“You would have to wait longer to get treatment at a hospital because we wouldn’t be able to have as many doctors or nurses on hand to be able to treat people, so it might mean longer waiting times for treatment when you turn up and present at a public hospital,” he told Fairfax Radio today.

“In terms of classrooms, it might mean not as many teachers being able to be employed to teach the kids that are coming through school.” Mr Nicholls said the federal government was targeting states such as Queensland that had embarked on their own spending cuts to rein in the budget deficit.

“We are dealing with our problems. We think it’s unjustified for the federal government to pass their problems down to us,” he said, adding he did not support broadening or raising the GST.

NT Chief Minister Adam Giles has confirmed that he would Sunday’s meeting, after saying yesterday that he stood “rock solid” with Queensland on the matter.

Tasmanian Premier Will Hodgman will also attend.

West Australian Premier Colin Barnett won’t be attending the leaders’ meeting in person. It’s still to be decided whether he will appear via video link, or send someone else to represent WA.

Additional reporting: AAP