State and territory leaders say $80 billion in federal cuts will have an immediate effect on their budgets.
State and territory leaders say they cannot afford the scale of cuts in Tuesday’s federal budget, and have demanded an urgent meeting with the prime minister in Canberra.
The premiers and chief ministers on Sunday disputed suggestions from Tony Abbott that $80 billion in budget cuts would have no impact for three years, saying NSW alone will suffer a $2 billion hit over the next four years.
But at an emergency summit in Sydney they shied away from talk of tax hikes to make up the shortfall, particularly a rise in the GST.
“I have a belief that the federal government want us to talk about tax increases,” said Queensland Premier Campbell Newman, who chaired the meeting.
“Sorry, we’re not going there.”
Mr Abbott and Treasurer Joe Hockey have justified the cuts by declaring hospitals and schools the responsibility of states and territories who should find their own sources of funding.
The prime minister added fuel to the fire earlier on Sunday when he dismissed talk the states were facing a budget emergency.
The changes would not take effect for three years, he said.
“We’ve got an enormous amount of time to sit down and work things out,” he told ABC television.
“I’m looking forward to having lots of discussions with the states over coming months and years.”
Mr Abbott said the coalition had been “absolutely upfront” with the states over health and education funding, despite claims they were blindsided by the series of cuts made over the next ten years.
“We said we would honour the then government’s commitments over the then (four-year) forward estimates,” he said.
“We said that we weren’t bound by (the former Labor government’s) pie-in-the-sky promises for the out years.”
The state and territory leaders – minus Western Australian Premier Colin Barnett – called for a meeting of the Council of Australian Governments before July 1.
They rejected the cuts as “completely unacceptable”, saying they would have an immediate impact on state and territory budgets.
“We don’t have the capacity to deal with it. We need to come to Canberra as a matter of urgency,” NSW Premier Mike Baird said after Sunday’s leaders meeting.
“We can’t afford it. It’s a pretty simple equation.”
Victorian Premier Denis Napthine said the cuts would hit ordinary Australian families – and the blows would start from July 1.
“These are simply unaffordable and unsustainable from the states’ point of view,” he said.
He said federal-state discussions on funding arrangements should have taken place before the cuts were announced.
The meeting also called for white papers on reform of the federation and taxation to be accelerated.
“I think that Tony Abbott needs to come to a COAG meeting with us to hear first hand the direct impact,” Mr Napthine said.
South Australian Premier Jay Weatherill said his state would have to close 150 hospital beds at the beginning of July.
“What the commonwealth did in the budget the other day is that they decided to push something across the table to us. We’re pushing it right back to them,” he said.
Opposition leader Bill Shorten said the government was using the cuts as a “back door” to a hike in the GST.
“Tony Abbott is using cutbacks to states as a form of blackmail to force the states to introduce a bigger GST,” he told reporters in Melbourne.