Toxic budget stirs up backbench jitters

May 23, 2014 – 12:00AM

Mark Kenny

Chief political correspondent

Fronting the National Press Club on Wednesday, shadow treasurer Chris Bowen noted that his backbench colleagues would have been especially pleased at his eventual arrival.

One of them would have been tapped to deliver his speech for him if, as had already happened once that day, a second plane had been denied a landing. The truth is, they’re pretty pleased anyway. The problem was Canberra’s notoriously stubborn fog.

It’s a pretty apt metaphor for the government’s position right now: stubbornness, and fog. Not that Bowen was complaining. It was hard to wipe the smile off his face despite the uncertain hours spent in circular flight.

Shadow treasurer Chris Bowen at the National Press Club.

Shadow treasurer Chris Bowen at the National Press Club. Photo: Chris Bowen

It’ll take more than a few delays or a bit of inclement weather to dampen the mood of a party that began the week leading by double figures in two major opinion polls and finds itself suddenly united around a common theme.

That theme is its opponent’s strategic error, or what one senior Liberal told Fairfax Media was “the stinking carcass hanging around the government’s neck called ‘the budget’ “. Another Liberal put it differently, branding Joe Hockey’s first effort as ‘‘about as popular as a Polly Waffle floating in a public pool’’.

Indeed, Coalition MPs are aghast at the sudden depth of their political dilemma and are already muttering about radical solutions. Being discussed is everything from a humiliating retreat on one or all of the budget’s most odious matters – think petrol excise, Newstart changes, the pension age rising to 70 and the GP payment – to the ‘‘nuclear’’ option down the track of a leadership shake-up.

An initial period of calm immediately following the budget is giving way to the realisation that economically it was at best unimaginative and, politically speaking, it was deeply flawed. And that in turn is showing up as criticism of Hockey. And of Tony Abbott.

‘‘The trouble with budgets,” observed one relatively calm backbencher, ‘‘is that almost by definition, treasurers have to be extended a lot of trust by the party room.

‘‘Budgets are so complicated and when everything’s a secret, then everything’s a front-page story, so consultation even with the backbench is just not an option, it’s impossible – we just wait around reading leak after leak, wondering what’s planted and what’s not, and hoping like hell that when it is delivered, the Treasurer knows what he’s doing.’’

And right now, as the government struggles to explain its approach, many MPs are concluding  the Treasurer did not fully know what he was doing.

Even some of Hockey’s cabinet colleagues are joining in, with one telling Fairfax Media Hockey had forgotten the politics and had “bought” the Treasury line on some things. And they know it could have been even worse.

According to insiders on top of the list of Treasury-inspired decisions – such as the return of fuel indexation, the family tax benefit tightening and the politically toxic GP co-payment – there could have been added the reduction or removal of the diesel fuel rebate to farmers and miners.

‘‘That would have led to warfare, and a rebellion from the Nats,” said one. Another said while Hockey had eventually told the ethanol producer Manildra it was to lose its roughly $100 million a year subsidy, his initial position internally was to keep the subsidy – all while agreeing to hit motorists with a charge that is designed to go “up and up and up”.

Bowen, who arguably fell victim to the guile of Treasury’s enveloping logic in his few weeks as Treasurer, when he embraced the fringe benefits tax changes for privately used business vehicles, learnt a valuable lesson: remember the politics.

Whether the budget has permanently damaged the government is too early to tell, especially given the variables. Hockey and Abbott may yet be saved from themselves by an unco-operative Senate, which knocks out the most unpopular aspects.

Time, too, will play a role if the economy begins to grow more strongly as a result of policy changes and/or external factors, prompting voters to accept the argument that tough remedial action had been necessary. That is clearly the government’s hope.

But at present at least, it seems the budget has had a corrosive effect on the Coalition’s public standing and a less obvious but no less dangerous effect of both Abbott’s and Hockey’s political authority in the party room.

Insiders say this was as much Abbott’s budget as Hockey’s. Whereas John Howard rarely, if ever, intervened in Peter Costello’s budget formulation process, leaving the expenditure review committee to his trusted treasurer, Abbott attended them all, according to a source. And he often played the leading role.

This, in the final analysis, may be the heart of the problem. Where treasurers usually push for cuts and harsh medicine, prime ministers usually play the counterweight role as politician-in-chief, vetoing policy purity where the politics would be too hard. Think Keating/Hawke, Costello/Howard and even Swan/Rudd.

Abbott, on the other hand, appears to have led the charge toward fiscal battle, in effect egging on his economic ministers to tougher action.

No wonder Bowen’s smiling.

Mark Kenny is Fairfax Media’s chief political correspondent.

Source : The Canberra Times

Qantas Los Angeles Business Lounge to open June 17

Qantas Los Angeles Business Lounge to open June 17

The new Qantas Los Angeles Business Lounge will open in mid-June, providing a new preflight home for passengers on Oneworld flights including those of lounge partners British Airways and Cathay Pacific.

Qantas describes this as Phase One of the LAX lounge project, with Phase Two – a new first class lounge – due to open by year’s end.

The airline boasts this much-needed replacement for the current cramped Qantas/Oneworld lounge at LAX “will offer a new standard of luxury for customers travelling from Los Angeles.”

Although a media launch for the lounge will be held on Tuesday June 17, the newest Qantas international lounges at Singapore and Hong Konghave seen a ‘soft opening’ a few days prior to the official date.

A uniquely LA look

And like its Asian siblings, the Qantas business lounge at LAX will draw on its location to shape a unique “look, feel and food” offering.

“As we’ve done with the Singapore and Hong Kong lounges, there will that knowledge of where you are, with parts of California and the US brought into both the first and business lounges” Simon Hickey, Qantas International CEO, told Australian Business Traveller during last month’s opening of the Qantas Hong Kong Lounge.

A centrepiece of the LA-inspired lounge is the internal circular internal fireplace around which passengers can sit and relax.

Qantas consulting chef Neil Perry will bring a regional twist to the lounge’s menu, just as he has done in the airline’s Singapore and Hong Kong lounges, and has promised that “the food will certainly be the very best airport lounge food in America, by a long way.”

In fact, the dining vibe of the LAX lounge will be very ‘California cuisine’ elaborates Roger Barstow, one of the Rockpool Group chefs working with Perry and Qantas on the dining at its international lounges.

“It’s going to be an ‘LA street food’ concept so we’re looking at Mexican, Korean, Italian and some of the Rockpool influence in there as well” Barstow told Australian Business Traveller.

“There will be several food stations and we’ll be doing lots of tray-arounds because this is such a busy lounge, especially in that small window in the evening when we have four Qantas flights leaving within two hours” Barstow says.

“There’ll probably be a little bit of Spice Temple in there” Barstow adds, name-checking another of the restaurants in Neil Perry’s empire, “but it’s more Rockpool Bar & Grill and any Rosetta items which are more suited to the west coast.”

As with the Qantas Singapore Lounge, LA will feature a dining area with a view into the kitchen, along with a separate wine bar offering signature cocktails.

LAX’s biggest and best?

Located at the stylishly revamped Tom Bradley International Terminal, the new Qantas Los Angles Business Lounge will not only be three times larger than the current facility, it will also be “the biggest lounge in Tom Bradley and by far the best lounge in that terminal in my humble opinion” Hickey says.

Qantas reportedly passed on the terminal space now used by Star Alliance – which has room for around 400 passengers and a total footprint of 1,675 square metres (18,000 square feet) – because the area was simply too small.

Qantas will certainly need all that space, as its business lounge will be jointly owned by Qantas, British Airways and Cathay Pacific, which between them run eight flights each day from LAX – with several of those being passenger-packing Airbus A380 superjumbos.

Has Hickey visited the Star Alliance lounge? “Yes, and it does look good, but only because we haven’t opened ours yet!” Hickey teases.

Australian Business Traveller will be attending the opening of the Qantas Los Angeles Business Lounge as a guest of Qantas.


Source : Australian Business Traveller

Australians outliving their super funds

May 23, 2014 – 7:45AM

The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14.

It’s estimated that by 2030 only three working Australians will pay income tax for every retired person on the Age Pension. About 20 years ago, that ratio was six to one. Photo: Nic Walker

When Christine Leaves quit full-time work in her late-50s, she spent most of her small retirement savings on a new car. Now 67, and relying on a government pension, she’s back at work as a part-time publicist to make ends meet.

Leaves, who says she had to sell all her investments to afford to move to the quiet retirement village where she now lives on the outskirts of Sydney, is among hundreds of thousands of Australian retirees who outlive their superannuation – mandatory retirement funds – highlighting shortcomings in the world’s fourth-biggest retirement savings industry.

To be sure, Australia’s pioneering $1.7 trillion ‘super industry’ – bigger than the country’s annual economic output – provides more than $72 billion a year in retirement funds, double the regular federal pension. And it’s held up as a model for other developed countries.

But the industry is plagued by high fees and a narrow range of products for retirees to invest their savings in. Coupled with poor spending decisions by retirees – who often cash in their super and splash out on holidays and cars – it has meant more Australians are outliving their investments.

Faced with an ageing population, as the baby boom generation heads into retirement, the government acknowledges the system is inadequate, with federal pensions soaking up a bigger chunk of national revenue. The government plans to raise the retirement age for the standard pension to 70 by 2035.

The superannuation system, which has grown rapidly since its 1992 launch, is likely to be a focus of the Financial System Inquiry, a government-nominated panel that will make recommendations to reform the financial services sector over the next decade. The panel’s first observation is due by the mid-year.

Not having enough money saved in their super accounts for retirement will make retirees more dependent on government pensions, and poses fiscal risks as most superannuation savings are currently channelled into the housing market, according to the Centre of Excellence in Population Ageing Research (CEPAR).

Leaves says her super didn’t really help her plan her retirement. “The amount was really insignificant,” she said, adding she could never afford to retire completely. “We didn’t have any


 (about super), employers never spoke about it, we were never encouraged (to save).”

Super sting

Funding for retirees is becoming harder.

It’s estimated that by 2030 only three working Australians will pay income tax for every retired person on the Age Pension – which is worth around $33,000 a year for a couple. About 20 years ago, that ratio was six to one. About 80 per cent of retirees rely on the federal pension, government data shows.

The superannuation system is among the world’s most expensive, according to an April report by Grattan Institute, with Australians paying $20 billion in fees and expenses on their balances, more than three times the median charged in other countries. “High fees would not be a concern if Australians were getting value for money. But high fee funds are damaging our retirement savings,” it noted.

Returns from these funds have been dismal. In 2012, for example, Australia was one of only two countries to post a negative rate of return, according to OECD global pension statistics. Over the five years to 2012, Australian pension funds lost 2.6 per cent. In comparison, Denmark and the Netherlands returned 6.1 and 3.5 percent, respectively.

Those poor rates of return amid the global financial crisis have made many Australian retirees risk averse.

John and Beverly Marsden, close friends of Leaves, say they constantly worry about outliving their super, but have held on to their savings as they don’t trust high-charging financial advisers who refuse to say how much they will return.

“People are largely on their own, facing a complex and far-reaching decision. It’s not surprising that many take the least daunting option and take the cash,” said Sacha Vidler, chief economist at Industry Super Australia.

The problem is often made worse by what retirees do when they take their super lump sum. At least half use the money to pay off mortgages, debts and on home renovations, but more than a fifth blow it on holidays and cars, according to an Australian Bureau of Statistics survey for the year to June 2013.

Out of teens

The super system is yet to mature, with only about half of Australia’s current workforce having benefited so far.

Initially, employers contributed 3 percent of salary on behalf of their staff. As a result, average superannuation balances have been insufficient for a comfortable retirement, experts say. Employer contributions have since risen to 9.25 percent and are set to grow to 12 percent, rising by 50 basis points each year from 2018.

Even so, retirees – who can access their super funds tax-free between the ages of 55 and 65 – are hard pressed by a lack of choice for where to invest. The most popular investment tool – account-based pensions – offer phased withdrawals, but expose investors to market volatility and don’t manage the risk of living longer either.

Deferred annuities, which only start paying after a certain period, and long-term care products that are widely available in the United States, Britain and Canada do not exist or operate with various barriers, making then uncompetitive.

“In many ways, the Age Pension is the perfect retirement product, it’s just not big enough,” said Richard Howes, CEO of Challenger Life, Australia’s largest annuities provider. “Part of the reason why people’s money is running out is because account-based pensions fail. So, it makes sense to have private pensions to bridge the gap.”

The Association of Superannuation Funds of Australia (ASFA) reckons a couple would need a pension paying $57,817 a year to have a comfortable retirement.

New offerings?

The industry is slowly warming to the need to have a wider suite of retirement products. Challenger’s Howes expects rising demand to spur more competition in the sale of annuities.

Challenger Life sold $270 million of lifetime annuities in the six months to December, more than it did in the whole year to June 2013, showing signs of growth in a struggling market.

Overall, annuities still have a much smaller market share. Only about $2.2 billion of annuities were sold last year, but industry experts see that topping $3 billion in 2014.

“We are seeing financial advisers getting a lot more interested in annuities,” said Nicolette Rubinsztein, General Manager, Advocacy and Retirement, at fund manager Colonial First State. “That is one area which we would expect to see product development around. It’s also very good value for money.”

Industry groups recently recommended a slew of measures to the Financial Systems Inquiry – from making the system more transparent and lowering fees to allowing for new retirement products and raising the quality and integrity of financial advice.

But, until that happens most retirees will have to keep a close eye on the pennies. “I worry all the time about outliving my super,” said 73-year-old John Marsden. “You just gotta live within your budget.”


Source : The Sydney Morning Herald

Mr Fluffy asbestos found on children’s clothes and toys in Canberra home

May 20, 2014

Emma Macdonald


Another Canberra home has been placed in a lockdown by ACT WorkSafe.

Another Canberra home has been placed in a lockdown by ACT WorkSafe.

A Canberra family with young children has been exposed to deadly Mr Fluffy asbestos that had fallen down the back of the children’s wardrobes, contaminating their clothes, toys and personal belongings.

The house has now been placed in a lockdown by ACT WorkSafe, leaving the family with nowhere to live and putting them under financial stress and uncertainty regarding the future of the property.

The confirmation of loose amosite asbestos in the house comes despite the family undertaking two independent assessments by class-A asbestos assessors – both of whom declared the house was safe.

ACT Work Safety Commissioner Mark McCabe said he was greatly concerned by the inspections and has referred the two men to ACT Planning and Land Authority to consider whether to revoke their licences.

The discovery was made several weeks ago when the couple was cleaning out their children’s wardrobes and found brownish tinged fibres that worried them. A sample of the fibres was sent to a third, experienced assessor who confirmed it was amosite – a class-1 carcinogen.

Mr McCabe placed a prohibition notice on the home, confirming that a fourth independent test had returned a positive result for amosite.

The family bought the house in the early 1990s and it was revealed during the sale process to be one of the homes affected by Mr Fluffy. But it had come with a certificate declaring it had been cleaned of the deadly loose amosite asbestos.

In line with ACT government advice about Mr Fluffy homes, the couple decided to get a check on any potential exposed asbestos in 2012 to ensure the safety of the children. The first check declared the house was safe to live in. But the home underwent a second inspection this year by the same assessor, who said he was following up on the ACT government’s warning in February that Mr Fluffy homes could carry dangerous residual fibres in their walls and subfloors. It again gave the house the all-clear. A second class-A assessor inspected the property this year and reported the house was safe.

Meanwhile, important documentation relating to the house has been ”misplaced” by ACT government staff.

The couple said they had contacted ACT Planning and Land Authority and visited its Mitchell office to view a scanned copy of their building file. They were disturbed to learn that the file contained everything except the certificate of clearance on the asbestos removal that was provided when the family bought the property.

They have been forced to lodge a freedom of information request on their property file with the territory government and said they have received no offers of assistance from the government.

The couple said the confirmation of loose amosite asbestos in their home had come as a


shock and they had suffered considerable anguish following the discovery.

“We are devastated by the implications of this discovery for our health and for our home,” the mother said. ”Our lives have been disrupted immensely. We have done exactly what the government asked us to do, in paying to get the house inspected by a licensed assessor, and yet these checks have failed us.”

ACT Workplace Safety Minister Simon Corbell said he was ”deeply concerned for the families who are facing these difficult circumstances”.

”The government is constantly reviewing its response to the issues raised by home owners as a result of recent asbestos assessments and will remain proactive in responding to new issues as they arise,” Mr Corbell said.

Yet he also maintained that families should continue to get their homes inspected by licensed inspectors.

The couple wants the ACT government to look at licensing asbestos assessors and said a system of quality assurance needed to be put in place to prevent other Canberra families suffering the same exposure as theirs.

The Fluffy Owners and Residents Action Group can be contacted at or through the Facebook page Friends of the Fluffy Owners and Residents Action Group.

Source : The Canberra Times

Same-sex marriage will come back on the political agenda: Katy Gallagher

May 23, 2014 – 8:45AM

Tom McIlroy


ACT Chief Minister Katy Gallagher.

ACT Chief Minister Katy Gallagher. Photo: Dominic Lorrimer

Same-sex marriage will return to prominence on the national political agenda as parliamentarians catch up with community sentiment, according to ACT Chief Minister Katy Gallagher.

Five months after the High Court overturned historic ACT legislation allowing same-sex couples to marry, Ms Gallagher said efforts by the Abbott Government to block reform would eventually be overcome.

In an interview with veteran journalist and former Canberra Times editor Michelle Grattan for The Conversation, Ms Gallagher said the 2013 ACT legislation represented genuine marriage equality.

She defended the government’s decision not to pass eleventh hour amendments, which some experts and advocacy groups said could have weakened the inevitable Commonwealth challenge, led by federal Attorney-General George Brandis.

“I don’t think this is an issue that is going to go away,” Ms Gallagher said.

“I think there’s probably an understanding that the current federal government is not sympathetic to exploring this at this time, but I have no doubt that there’s enough people in federal Parliament that will keep this issue alive, even if it goes through more years of being rejected before it is ultimately accepted.”

Now the second-longest serving state or territory leader, Ms Gallagher said federal MPs and Senators continued to lag behind community sentiment on the issue.

Public opinion polls in Australia and overseas have consistently shown a majority of respondents support same-sex marriage becoming legal.

“The community is much more progressive and accepting than federal parliamentarians are so I think the pressure will be maintained.

“It’s up to the Australian people what they seek from their elected representatives that will ultimately determine the timetable for this reform but I am firmly of the view that it will happen.

“When it does we will reflect back and wonder why it has taken so long,” Ms Gallagher said.

The interview also canvassed the territory impact of the federal budget and reforms of the Labor Party.

Ms Gallagher said she didn’t believe Prime Minister Tony Abbott would spend significant time at his official Canberra residence, The Lodge.

The historic Deakin home is currently undergoing a $4.5 million restoration. Mr Abbott and his family have moved into Kirribilli House on Sydney Harbour.

Asked if she supported an increase in the GST or a widening of the base of the consumption tax, Ms Gallagher restated her view that consideration should come during a wider tax review.

She said Canberra’s social fabric could be damaged by last week’s federal budget, as the city faces 16,500 public service job losses and cuts to health and community services.

She said Mr Abbott’s views on the capital were unclear.

“He tells me he loves the city, he enjoys the time he spends here and that he does want to cause economic harm to the city.

“We have some of [Mr Abbott’s] senior ministers saying their view is unless there’s a good reason to be in Canberra, the federal public service doesn’t need to be here. It could be anywhere in Australia.

“That paints a worrying picture for us as a city,” Ms Gallagher said.

Source : The Canberra Times

Tony Abbott says he can’t guarantee that university costs won’t double due to slashed funding

May 23, 2014

Heath Gilmore, Matthew Knott

Prime Minister Tony Abbott has refused to rule out university fees doubling because of his government’s deregulation of the sector, as some institutions suggest the rises will be much greater due to withdrawn funding.

Mr Abbott said increased competition in the market would mean some fees would increase but others would go down. He said no one would have to pay a ”cent upfront” as HELP loans cover initial costs.

When asked if fees may double, Mr Abbott said on Thursday: ”There are lots of things that I can’t guarantee, because we live in an uncertain world, but I can guarantee that no one will have to pay a cent upfront because there’ll be these fee-help loans to cover their upfront costs.”

"We live in an uncertain world,": Tony Abbott.

“We live in an uncertain world”: Prime Minister Tony Abbott. Photo: Matt King

On Thursday the government went on the offensive to defend its overhaul of the higher education sector as criticism mounted of its deregulation of university fees.

The changes have plunged the university sector into uncertainty. Applications for the midyear intake, the first students to be affected by the new fee regime, close in two weeks, and many institutions are unable to tell them what they would be charged in the later years of their degree. Some sector analysts have speculated the cost of highly sought-after degrees could rise to $120,000.

In a speech in Sydney, Education Minister Christopher Pyne said Australia would never have the diversity of choices for students and the quality of courses needed without fee deregulation.

”When institutions compete for students, students win,” Mr Pyne said. ”Higher education institutions will be more responsive to student needs as they position themselves in the higher education market.”

Mr Pyne said he was confident most of the changes would become law. ”Our job is to get as much of this through as possible – I want it all through,” he said. ”And I can see that there’s a very fair chance that almost all of it will get through.”

Labor higher education spokesman Kim Carr said: ”This is a shambles, not a strategy. It’s only a matter of time before the government has to abandon what has been a very hastily devised program of cuts.”

The Prime Minister’s comment came as the University of Sydney released preliminary research that showed its faculty of arts and social sciences faced an uncertain future with reduced government revenue of about $10.3 million.

It followed university vice-chancellor Michael Spence warning on Thursday that fee deregulation and increasing student loan debts with higher rates of interest risked pricing middle-class families out of a tertiary education.

Universities have called on the government to take more time to investigate any unintended consequences of the changes.

Dr Spence said the government’s reforms to the higher education sector were already having an effect on universities, students and school leavers. A recruitment event at the Revesby Workers Club on Wednesday night had half the number of formal acceptances to attend. ”We saw lower numbers than we’ve ever seen before,” he said.

But Australian National University vice-chancellor Ian Young, whose institution is one of the Group of Eight, does not believe the cost will be anywhere near that high: ”I suspect institutions will be cautious rather than go with grandiose fee levels in the initial years.”

Source : The Sydney Morning Herald

Stop your complaints, says budget architect Tony Shepherd

May 23, 2014

Heath Aston

Political reporter

The man who helped provide the blueprint for Treasurer Joe Hockey’s austere first budget has lashed out at ”narrow sectional interests”, including his ”good mate” David Gonski, for the hostile community response.

The head of the Abbott government’s Commission of Audit, Tony Shepherd, said the commission had ”agonised” about spreading the burden of repairing the budget across the community but no single sector, including education, had accepted it must sacrifice.

"I think it's a sad reflection on the modern Australian attitude that they can't see that all areas have to make a contribution,": Tony Shepherd.

“I think it’s a sad reflection on the modern Australian attitude that they can’t see that all areas have to make a contribution,”: Tony Shepherd. Photo: Alex Ellinghausen

”I think it’s a sad reflection on the modern Australian attitude that they can’t see that all areas have to make a contribution and they look at it as a narrow, sectional issue,” he said.

”People will protect their sectional interest, that’s understandable, but I wish people could also stand back, look at the overall picture of the Commonwealth budget and rather than say ‘don’t touch me’, say ‘what can be our contribution to a sustainable surplus’.”

It comes as Liberal backbencher George Christensen, the LNP member for the Queensland electorate of Dawson, posted a photo of an impoverished child on social media and suggested complaints about the budget lacked perspective.

“Aussies should do a tour of Asia & live like locals to put these 1st world complaints re budget in perspective,” he wrote. He followed up his original tweet with: ”Try getting any serious form of welfare in Thailand or other SE Asian nations.”

The Abbott government is faced with widespread protest – both physical and rhetorical – from groups as diverse as students, pensioners, welfare recipients, state governments and the health and education sectors.

Mr Hockey adopted the commission’s recommendation to pull the plug on Gonski funding from 2018 and instead apply increases based on inflation and wages. In a speech on Wednesday, Mr Gonski savaged the government and the audit commission for gutting funding commitments made in the name of his schools review.

Mr Shepherd returned fire, saying: ”I have the greatest respect for David Gonski, who is one of the finest human beings I’ve ever met – but on this we disagree.”

He described the Gonski reforms as a ”fine idea” and said the audit commissioners agreed with needs-based funding but retaining the $5 billion a year extra funding would have to come at the expense of other sectors if there was an overriding commitment to bring the budget back into balance.

”We would have loved to have kept education funding at the levels of Gonski but we had to go through every program and bring [spending] under control. To maintain Gonski you must answer the question: do we cut hospitals more? Or cut disabled pensions more? Lower the rate of growth in the aged pension?” he said.

While Mr Gonski praised federal education bureaucrats for their dedication, Mr Shepherd said a twin layer of bureaucracy was a ”waste of money” and renewed calls for the states to ”quit the education and health space”.

”States that preside over a bad [school] system will be punished by voters and those that have good ones will be rewarded, that’s competitive federalism,” he said.

Mr Abbott who encountered 100 pro-Gonski protesters in Hobart on Thursday, said Labor’s Gonski commitments were ”pie-in-the-sky”.

”I’m certainly not committing to a permanent massive increase at the same level of the former government,” he said. ”We are continuing to increase funding, it’s just that we are not continuing to increase it at the rate of the former government’s promises.”

Opposition Leader Bill Shorten said the government got ”an F” for effort. ”What a lazy, reckless, indifferent mob of swindlers this government are when they say we’re not going to have anything more to do with the funding of schools.”

Source : The Sydney Morning Herald