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Premiers, chief ministers to meet in Canberra following Commission of Audit release

ABC News logo ABC News 1/05/2014
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Premiers and chief ministers will attend a Council of Australian Governments (COAG) meeting in Canberra today, less than 24 hours after significant changes to federal funding were flagged in the Commission of Audit report.

Several major changes to the way states interact with the Commonwealth were flagged in the Commission of Audit report, which was released yesterday.

The audit report made 86 recommendations to rein in the federal budget, including widespread spending cuts to government services and family payments.

It includes handing the states greater responsibility for the health and education systems.

But when premiers and chief ministers meet today, it is unlikely there will be any new information for them.

The audit report is not on the meeting's agenda, and Finance Minister Mathias Cormann is refusing to say which recommendations the Government will act on.

The Federal Government has said it will provide a response to the Commission of Audit report in the budget, with Treasurer Joe Hockey quick to stress the report is "not the budget" but has not ruled out adopting any of the proposals.

Since it was set up in October, the commission has focused on the 15 biggest Commonwealth spending areas and found the long-term outlook for the budget is "ominous".

Victorian Premier Denis Napthine says he will be raising the issue of GST revenue at the COAG meeting.

The amount of money being returned to Victoria from the GST has been cut from 90 cents in the dollar to 88 cents.

The Victorian Government has repeatedly called for the distribution to be changed, but the Commonwealth has so far given no indication it will.

Dr Napthine says it is unfair that states like NSW and Queensland will receive significantly more from the GST than Victoria.

"Victoria shouldn't be penalised because we run a strong economy," he said.

"We run budget surpluses and a strong economy. We should be rewarded for that, not penalised."

However, Western Australia Premier Colin Barnett has welcomed one of the audit's recommendations saying a change to the way GST revenue is distributed to the states is fair.

The commission advocates sharing the revenue raised through the GST on a per capita basis, supplementing smaller states with extra grants.

"I support the recommendation to share GST revenue on the basis of population - this approach is fair to all," Mr Barnett said.

COAG is likely to be dominated by discussions on infrastructure approvals and deregulation for small business.

Key commission recommendations

- Raise age pension age to 70 by 2053
- Include family home in means test from 2027
- Slow roll-out of NDIS
- Up to $15 co-payment to visit doctor and access Medicare services
- Increase co-payments for taxpayer-funded PBS-covered medicines
- Uni students to pay more for degrees and lower HELP repayment threshold to minimum wage
- New benchmark to lower growth in minimum wage so it is equal to 44 per cent of average weekly earnings
- Force young single jobseekers to relocate or lose welfare benefit
- Scrap Family Tax Benefit Part B and a new means test for Part A with maximum rate of payment reducing from at $48,837
- Lower paid parental leave scheme salary cap to average week earnings (currently $57,460) and use savings for expanded child care payments

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