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Tony Abbott’s ‘crash through’ budget may force states to raise GST Tony Abbott’s ‘crash through’ budget may force states to raise GST
(about 2 hours later)
Tony Abbott is adopting a “crash through” budget strategy – forcing the states to consider raising the goods and services tax to make up for huge federal funding cuts to health and education and daring senators to pass most of his hardline first budget or risk their seats at a double dissolution election.Tony Abbott is adopting a “crash through” budget strategy – forcing the states to consider raising the goods and services tax to make up for huge federal funding cuts to health and education and daring senators to pass most of his hardline first budget or risk their seats at a double dissolution election.
Tuesday night’s budget reduced promised federal funding to the states for hospitals and schools by $80bn between 2017-18 and 2024-25, a move the federal government concedes will force the states to raise more tax revenue.Tuesday night’s budget reduced promised federal funding to the states for hospitals and schools by $80bn between 2017-18 and 2024-25, a move the federal government concedes will force the states to raise more tax revenue.
“If they want to maintain that level of funding … they will have to get it from taxpayers, just as we would have had to get it from the same taxpayers,” treasurer Joe Hockey told the ABC on Wednesday.“If they want to maintain that level of funding … they will have to get it from taxpayers, just as we would have had to get it from the same taxpayers,” treasurer Joe Hockey told the ABC on Wednesday.
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.”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.”
Asked whether the states had any choice but to provide the necessary support to broaden or raise the goods and services tax, he said they were “perfectly entitled to argue for change, if that's what they want”.Asked whether the states had any choice but to provide the necessary support to broaden or raise the goods and services tax, he said they were “perfectly entitled to argue for change, if that's what they want”.
NSW’s new premier, Mike Baird, a good friend of Abbott, reacted with fury, saying the move was “a kick in the guts to our state” and asking his federal colleague “what services would he like us to cut”.NSW’s new premier, Mike Baird, a good friend of Abbott, reacted with fury, saying the move was “a kick in the guts to our state” and asking his federal colleague “what services would he like us to cut”.
“What we had last night from the federal government was a flick pass … you cannot outsource your problems to the states … that’s not good enough, the people of NSW want to know we will stand up for them and that is exactly what we will do,” Baird said.“What we had last night from the federal government was a flick pass … you cannot outsource your problems to the states … that’s not good enough, the people of NSW want to know we will stand up for them and that is exactly what we will do,” Baird said.
“We are not going to be forced into arguing for anything,” Baird said when asked whether he had any option but to back a higher GST, adding he had no warning of the massive federal funding cuts.“We are not going to be forced into arguing for anything,” Baird said when asked whether he had any option but to back a higher GST, adding he had no warning of the massive federal funding cuts.
Victoria’s treasurer, Michael O’Brien, said he would be “watching like a hawk” to see whether the new Medicare co-payment had the predicted effect of sick people instead going to state-run hospital emergency departments, saying that was “a form of cost-shifting we simply can’t bear”. The Queensland premier, Campbell Newman, demanded an “emergency” meeting of the Council of Australian Governments to discuss the cuts.
The Liberal leader suggested Joe Hockey was attempting to wedge the states to bring on a debate over the goods and services tax.
“The whole thing seems like a wedge to get the states to get the GST to be raised,” Newman said. “It has been done in a non-transparent and non-upfront way. The Commonwealth is not putting their shoulder to the wheel.”
Victoria’s treasurer, Michael O’Brien, another Liberal, said he would be “watching like a hawk” to see whether the new Medicare co-payment had the predicted effect of sick people instead going to state-run hospital emergency departments, saying that was “a form of cost-shifting we simply can’t bear”.
And Western Australian premier Colin Barnett, also a Liberal, said he would never agree to an increase in the GST unless the state's long-standing complaint about GST distribution was addressed.
With Labor, the Greens and the Palmer United party all vowing to oppose the $7 Medicare co-payment and long-term changes to pension eligibility and the pension age, these moves appear unlikely to pass the new Senate that sits from July, and other measures are likely to also face some opposition.With Labor, the Greens and the Palmer United party all vowing to oppose the $7 Medicare co-payment and long-term changes to pension eligibility and the pension age, these moves appear unlikely to pass the new Senate that sits from July, and other measures are likely to also face some opposition.
Abbott said 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 in a double dissolution election if budget policies were blocked.Abbott said 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 in a double dissolution election if budget policies were blocked.
“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 2GB.“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 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.”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.”
But two big budget measures do appear set to pass. The Greens have said they will back the reindexation of fuel excise, giving the government enough votes for it to pass the upper house. And Labor is not ruling out support for the 2% deficit levy on those earning more than $180,000 per annum, saying its priority was fighting against the “dismantling” of Medicare and changes to pensions.But two big budget measures do appear set to pass. The Greens have said they will back the reindexation of fuel excise, giving the government enough votes for it to pass the upper house. And Labor is not ruling out support for the 2% deficit levy on those earning more than $180,000 per annum, saying its priority was fighting against the “dismantling” of Medicare and changes to pensions.
The opposition leader, Bill Shorten, speaking outside a Canberra hospital, said “Labor will not support taxes on Medicare, full stop. Tony Abbott is a clear and present danger to a universal, accessible healthcare system in Australia.”The opposition leader, Bill Shorten, speaking outside a Canberra hospital, said “Labor will not support taxes on Medicare, full stop. Tony Abbott is a clear and present danger to a universal, accessible healthcare system in Australia.”