The PM was counting on the Gonski reforms to provide her circuit breaker and election message. The aim was to get at least some states to agree to them, and then she could make an election message out of how Labor would put money into schools, and the Libs wouldn’t. She could do this safe in the knowledge that she didn’t really have to explain how she’d pay for it, and that they were going to use smoke and mirrors to cover up the worst of the budget holes (such as the 2015 hole that will occur if European carbon prices don’t increase).
Unfortunately for her, that plan relied on at least some premiers agreeing to the plan. This involved giving out very little information, but skewing the funding model so a couple of big and potentially friendly states were getting enough money that they couldn’t say no. The premiers didn’t fall for that, and are saying they want enough information to make a sensible decision. Gillard would prefer not to give out that level of information, as it creates the risk of someone noticing that the emperor has no clothes.
For the Libs, if this is played right it is a gift. All Abbott needs to do is to say that he strongly believes in state rights, and his aim is to shrink the Federal education bureaucracy. It simply doesn’t need to exist, and definitely doesn’t need to be grown under the Gonski reforms. The strong message for Abbott would be that he will help repair the state budgets, but he won’t dictate to them how they spend that on health, education or policing. If I were him (and as I’ve noted before) I’d go with a message that says:
1. Repeal the carbon tax, direct action instead (but probably go slow on that direct action, as it could be expensive). This saves the States money
2. Keep elements of the compensation, in particular the tax cut for low income earners. This is actually a productivity measure and it helps the unemployed into the workforce – it’s good policy, the funding for it should be found elsewhere (and let’s be honest, the carbon tax was never going to generate enough money to pay for it, so pretending it’s carbon tax compensation was never really a flyer)
3. Say that you want to keep Gonski, but not the Federal govt involvement in it. Repeal the family tax giveaway that claimed to be for school kids, and give it to the states to fund Gonski instead. What parent could really complain about that – the money is still going on education, and it fixes two things with one move
4. Repeal the mining tax, but in return, suggest to the State governments that they put royalties up so that they can repair their budgets. Pitch the story that the Federal govt doesn’t need to be getting all in the States’ business – they have tax raising powers and they have ownership of health and education
5. Get the Federal govt out of many aspects of Health – the Feds should really only be in PBS, Medicare and in-home care. They shouldn’t be playing with hospitals at all, nor setting standards for them, nor measuring how those hospitals are performing. Set up some COAG bodies that report on health across the nation, and allow the States to provide or not provide data to those bodies as they see fit
All of this would reduce duplication between state and Federal, allow Abbott to claim to support Gonski, and help fix both Federal and State budgets. There’s something to like about it for everyone (and also something to dislike for everyone). But I think it would work.