News National States meet for crisis budget talks

States meet for crisis budget talks

Mike Baird
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State leaders are expected to call for a slice of income tax revenue from the Commonwealth to compensate them for the Abbott government’s massive budget cuts.

NSW Premier Mike Baird will on Sunday host an emergency meeting of state and territory leaders, angry with the federal government’s $80 billion of cuts to their schools and hospitals over the next 10 years.

“The emergency meeting … demonstrates the seriousness of the fiscal crisis now confronting the states and territories,” Mr Baird said.

It’s unclear whether the GST is officially on the agenda for discussions, but given the dire budget situation the states face, it’s more than likely to come up.

There’s been speculation the budget cuts will force the states to call for an increase to the GST rate or a widening of its base.

But premiers and chief ministers are insisting they won’t be forced into spearheading a call for a GST hike.

Instead, Queensland Premier Campbell Newman and Mr Baird have called for a portion of income tax, which is collected by the Commonwealth, to be handed to the states to help pay for schools and hospitals.

The meeting will kick off at midday in Sydney and give the states an opportunity to share ideas on how to deliver services amid the cuts.

They’re also expected to discuss possible reforms to the way key services, such as health and education, are delivered between the states and Commonwealth.

“I believe that on Sunday we can fashion proposals that will not only address the immediate challenge posed to the states’ ability to deliver key services, but will also begin a mature conversation about the long-term sustainability of the nation’s health and education systems,” Mr Baird said.

All state and territory leaders, with the exception of West Australian Premier Colin Barnett, are expected at Sunday’s meeting.

Mr Baird said it will be followed by further talks with the federal government.