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| Turnbull faces 'fierce campaign' if tax cuts put before restoring school and hospital funding | |
| (about 3 hours later) | |
| The South Australian premier, Jay Weatherill, has warned Malcolm Turnbull he will face a “fierce campaign” from the states during the looming federal election if he offers tax cuts to companies and does not reverse Abbott government funding cuts to hospitals and schools. | The South Australian premier, Jay Weatherill, has warned Malcolm Turnbull he will face a “fierce campaign” from the states during the looming federal election if he offers tax cuts to companies and does not reverse Abbott government funding cuts to hospitals and schools. |
| There are strong indications the federal government is looking to gradually reduce the 30% company tax rate, with the cabinet secretary, Arthur Sinodinos, saying on the weekend that it would benefit workers as well as the economy and the treasurer, Scott Morrison, telling parliament last week that reducing the 30% company tax cut was the best way to drive economic growth. | There are strong indications the federal government is looking to gradually reduce the 30% company tax rate, with the cabinet secretary, Arthur Sinodinos, saying on the weekend that it would benefit workers as well as the economy and the treasurer, Scott Morrison, telling parliament last week that reducing the 30% company tax cut was the best way to drive economic growth. |
| Related: Malcolm Turnbull: Tony Abbott can be an election asset or tear us down | Related: Malcolm Turnbull: Tony Abbott can be an election asset or tear us down |
| As revealed by Guardian Australia in February the prime minister has also been talking to state premiers about extra hospital funding to prevent them falling off the “fiscal cliff’ caused by cuts in the first Abbott budget of $80bn in long-term funding for hospitals and schools. The talks have been about “interim” funding while longer-term changes are negotiated. | As revealed by Guardian Australia in February the prime minister has also been talking to state premiers about extra hospital funding to prevent them falling off the “fiscal cliff’ caused by cuts in the first Abbott budget of $80bn in long-term funding for hospitals and schools. The talks have been about “interim” funding while longer-term changes are negotiated. |
| It is understood the NSW premier, Mike Baird, has proposed the federal government pay an extra $7bn over four years for hospitals and the states are also looking to the Coalition to match Labor’s promise of an extra $4.5b to pay for the final two years of the six-year “Gonski” agreement on schools funding. | It is understood the NSW premier, Mike Baird, has proposed the federal government pay an extra $7bn over four years for hospitals and the states are also looking to the Coalition to match Labor’s promise of an extra $4.5b to pay for the final two years of the six-year “Gonski” agreement on schools funding. |
| Weatherill told Guardian Australia that “if the commonwealth is to pursue cuts to company tax when we think the first call on the nation’s resources should be health and education funding, then they should expect a fierce campaign to be run against them during the federal election.” | Weatherill told Guardian Australia that “if the commonwealth is to pursue cuts to company tax when we think the first call on the nation’s resources should be health and education funding, then they should expect a fierce campaign to be run against them during the federal election.” |
| “The Abbott government cuts amount to around $20bn over the forward estimates. We are talking about some substantial proportion of that.” | “The Abbott government cuts amount to around $20bn over the forward estimates. We are talking about some substantial proportion of that.” |
| Asked about hospitals and schools funding on ABC radio on Tuesday, Turnbull said: “There is a COAG meeting – a meeting with the premiers and chief ministers of the territories – on the 31st of this month and the 1st of next month. And there will be, I will have more to say in the lead-up to that relating to health and schools and so forth.” | Asked about hospitals and schools funding on ABC radio on Tuesday, Turnbull said: “There is a COAG meeting – a meeting with the premiers and chief ministers of the territories – on the 31st of this month and the 1st of next month. And there will be, I will have more to say in the lead-up to that relating to health and schools and so forth.” |
| The states had hoped extra funding could come from an increase in the goods and services tax, before the federal government finally ruled that out earlier this year. | The states had hoped extra funding could come from an increase in the goods and services tax, before the federal government finally ruled that out earlier this year. |
| Related: What the evidence shows about Malcolm Turnbull's claim the ABCC will help the economy | Related: What the evidence shows about Malcolm Turnbull's claim the ABCC will help the economy |
| The former Labor government had promised the states $57bn in long-term hospital funding after protracted negotiations to address the fact that the cost of hospitals – as the population aged and medical technologies became more expensive – was projected to exceed some states’ entire budgets over time. The Abbott government cut this agreement in its 2014 budget, meaning that promised 9% per year funding increases would, after July 2017, fall to 4.5%. It also cut an agreement for more than $20bn in long-term funding for schools. | The former Labor government had promised the states $57bn in long-term hospital funding after protracted negotiations to address the fact that the cost of hospitals – as the population aged and medical technologies became more expensive – was projected to exceed some states’ entire budgets over time. The Abbott government cut this agreement in its 2014 budget, meaning that promised 9% per year funding increases would, after July 2017, fall to 4.5%. It also cut an agreement for more than $20bn in long-term funding for schools. |
| All states insist they cannot possibly operate existing hospitals with this funding and that, without substantial extra money from the commonwealth, they are facing a funding crisis. The New South Wales premier, Mike Baird, calculated the shortfall would reach $35bn nationally by 2030. | All states insist they cannot possibly operate existing hospitals with this funding and that, without substantial extra money from the commonwealth, they are facing a funding crisis. The New South Wales premier, Mike Baird, calculated the shortfall would reach $35bn nationally by 2030. |
| Coag has also considered a discussion paper leaked to Guardian Australia earlier this month proposing a radical long-term plan under which the commonwealth pays an agreed percentage of the cost of each hospital procedure under a new “hospitals benefit”, regardless of whether the service is provided in a public or private hospital or to a public or private patient. | Coag has also considered a discussion paper leaked to Guardian Australia earlier this month proposing a radical long-term plan under which the commonwealth pays an agreed percentage of the cost of each hospital procedure under a new “hospitals benefit”, regardless of whether the service is provided in a public or private hospital or to a public or private patient. |