Budget 2014: Tony Abbott says voters were 'on notice' for cuts before election, as state and territory leaders meet in Sydney

Updated

Prime Minister Tony Abbott says voters were "on notice" before the election that the Coalition would make big cuts to spending.

The states and territories are unhappy with last week's federal budget, and most leaders met in Sydney today to discuss their concerns over planned $80 billion cuts to health and education funding.

Labor, the Greens and the Palmer United Party have also vowed to block some of the more controversial budget measures, which could blow a multi-billion-dollar hole in Commonwealth finances.

This morning on the ABC's Insiders program, Mr Abbott said the Coalition repeatedly talked about the budget problems before the election.

"You might remember the mantra - it was stop the boats, repeal the carbon tax, build the roads of the 21st Century, and get the budget back under control," he said.

"So people, I think, were on notice that we were going to do what was necessary to ensure that we were not being a burden on our children and grandchildren."

Mr Abbott says the Coalition has done "precisely" what it said it would do before the election.

"We said we would honour the then-government's commitments over the then-forward estimates. We said we weren't bound by their pie-in-the-sky promises for the out years. We said it was unsustainable. We said it was undeliverable. We are not going to try to deliver it," he said.

"We're not talking about next week or next month or even next year. We're talking about changes in three years' time.

"We've got an enormous amount of time to sit down and work things out, but what we're not going to do is continue unsustainable spending with borrowed money.

Sorry, this video has expired Video: Bill Shorten speaks at ALP state conference (ABC News)

"That would be wrong. That would be an offence against the future."

Opposition Leader Bill Shorten ramped up his criticism of the budget during a speech at the ALP state conference in Melbourne this morning.

"Tony Abbott knows you can't take $80 billion out of schools and hospitals without the states having to increase a new tax," he said.

"They want the state governments of Australia to introduce a bigger, broader GST to pay for the cuts they will have to pay for."

States meet to discuss budget cuts

Most states have reacted angrily to the Commonwealth's plan to rip $80 billion out of school and hospital funding over 10 years.

All premiers and chief ministers except Western Australia's Colin Barnett are meeting today to decide how they will fill the funding shortfall.

Queensland Premier Campbell Newman has come up with a radical plan for the states to push for a portion of income tax revenue to compensate for the cuts.

"We believe it's time to re-invent the federation and ensure [a] long-term funding stream if the states and territories are to take that responsibility," he said.

"What we are pushing for is that the income tax that is paid by mums and dads in this state comes back to the mums and dads of this state on a fair, ongoing basis."

Mr Newman has called the budget cuts "not fair" and "not acceptable", saying they are an attempt to "wedge" the states into pushing for an increase in the Goods and Services Tax (GST).

Labor's Gonski school funding plan will be dumped in 2017-18, saving about $30 billion from the federal budget.

Hospital funding agreements, agreed with the states and territories under former prime minister Kevin Rudd, will also be wound back from 2017, saving $50 billion over eight years.

Speaking in Sydney before the start of the meeting, Victorian Premier Denis Napthine said an increase in state responsibilities must be accompanied by funding.

"We are happy to accept responsibilities for education and public hospitals and perhaps the Commonwealth ought to transfer the appropriate funding with it," he said.

"They are the collectors of tax and they need to transfer the funding with that, so that we can manage health and education to deliver the services that people need."

Weatherill wants campaign of resistance

On Wednesday, Mr Barnett said the effects of the cuts were still some time away.

"It's four to five years away so no sense of panic is required," he said.

Mr Barnett said he was "happy" to discuss an increase to the rate of the GST - with the caveat that his state must receive a greater slice of the tax take.

The federal Labor member for Perth, Alannah MacTiernan, has criticised Mr Barnett for deciding not to attend the meeting.

"I think that's a bit churlish that he's not there protecting WA's interests," she said.

South Australian Premier Jay Weatherill has called on his counterparts to band together in a campaign of resistance against the Federal Government.

"I think the key thing is to make sure that we remain united and that we have a very clear and simple message and that's for Tony Abbott to reverse these cuts," he said.

"The Senate is meant to be the states' house. We'll be calling on the states' house to actually play its traditional role in representing the interests of the states."

Northern Territory Chief Minister Adam Giles says his government is still assessing what effect the federal budget will have on the jurisdiction, although he says it is already clear the territory will be worse off.

"Well we're still waiting to go through a lot of this information. Clearly we'll have less funding for [hospital] beds, less funding for schools going through the forward estimates and beyond," he said.

"We want to sit down today and see what the other impact is on other jurisdictions and see how we'll be able to get better accountability and better reform to get the financial level right to provide that level of services."

Topics: budget, government-and-politics, federal-government, federal---state-issues, state-parliament, education, health, schools, abbott-tony, sydney-2000, australia, act, nsw, nt, qld, sa, tas, vic, wa

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