Australia

May 15, 2014

Commonwealth-state funding clash has big economic implications

The government's outsourcing of its budget problems to the states in health and education funding will have dramatic effects on our capacity to handle the challenges of an aging Australia, Bernard Keane and Glenn Dyer write.

The government’s budget strategy to slash funding for education and health via lower indexation because the states should take more responsibility for them raises three particular problems.

11 comments

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11 thoughts on “Commonwealth-state funding clash has big economic implications

  1. El Tel

    As Bernard Keane said just before the budget, don’t listen to what they say, see who benefits. This loony religious tea party mob aren’t merely satisfied with transferring wealth from our most vulnerable to big business and high income earners, they are intent on transferring wealth from the poorest to the church as well.

  2. El Tel

    Bugger, posted on wrong article

  3. Paracleet

    Everyone loves a pedant, so I’ll point out there are not “a lot” of US states with larger populations. There are only 2: California and Texas.

  4. klewso

    If Abbott goes to a “GST referendum election” maybe that swing will be more uniform than it was against Howard, who hung on by more marginalised seats.

  5. Nevil Kingston-Brown

    I suggest that the point of the cuts is to turn the drift of the middle class towards private schools and private health into a stampede.

  6. jmendelssohn

    Nevil, there might be an unintended consequence from the huge hike in university fees and abuse of the unemployed young. Bearing in mind that universities will have to admit any fee paying student who meets entrance requirements (minimum degree cost c$120,000) those parents who don’t want to see their children crippled with debt will be more inclined to pay for their degrees than their schooling.

  7. leon knight

    Roll on bulk obstructionism in the house and the senate, with incessant jeering at Abbott for lacking the guts to call a DD….the opportunities for the progressives are now pretty much unlimited, Abbott has thoroughly burnt all his political capital.
    Adults indeed – how offended must the premiers be, with Abbott, Hockey and Pyne (so far) all parroting the same line that they expect the states to grow up and solve this little $80 billion dollar puzzle.
    And Pyne this morning talking pretty bluntly about the quality sandstone Unis for the rich and privileged…..

  8. AR

    States have so few revenue raising options (and several, specifically stamp duty) were supposed to have been abolished with the GST… so the forthcoming COAG should be fun.

  9. klewso

    On a bit of a tangent, but after the last few years of devotion to blatantly backing Abbott’s negativity while it ate away at Labor government competence and legitimacy, now Murdoch’s Limited News is devoting itself to calling everyone to “get behind the government for the good of the nation”?
    What utter rank hypocrisy?

  10. drsmithy

    States have so few revenue raising options (and several, specifically stamp duty) were supposed to have been abolished with the GST… so the forthcoming COAG should be fun.

    The States have one of the most efficient and equitable revenue raising options known to them: land tax.

    With that said, the States add SFA value to this country.

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