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Weatherill pledges to work with PM on "unworkable" tax plan

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Premier Jay Weatherill has vowed to deal “constructively” with Malcolm Turnbull at tomorrow’s Council of Australian Governments meeting in Canberra, but insists the Prime Minister’s proposed tax shake-up is “unworkable”.

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Weatherill will jet out today for preliminary discussions ahead of tomorrow’s COAG session, and insists finding a way to end the impasse on health and education funding is “an issue that’s too big to get in our political corners about”.

“We need to come up with an agreement,” he told reporters in Adelaide today.

Turnbull confirmed yesterday a plan to reduce the federal government’s income tax collection and allow states and territories to raise the remainder to pay for their hospitals and schools.

In return, the Commonwealth would reduce the grants it hands to the states, meaning no extra money.

Weatherill said “the constructive thing is [the Commonwealth] has recognised there’s a shortfall in funding for health and education and that there should be a Commonwealth response of some sort, so there’s going to be some contribution to that effort and some long-term sustainable revenue base”.

“The thing that isn’t so good is the amounts of money they’re talking about are pretty paltry at the moment, in terms of their contribution,” he said.

“The income tax proposal he’s come up with I think is unworkable, but there will be an alternative proposal that can work.

“Obviously there’s a lot of work to be done there [but] we’re hoping to have some movement on that.”

The PM has hit back at critics of his radical tax overhaul, insisting states need to be more accountable for the money they spend.

“Jay Weatherill was the first one to propose income tax sharing,” Turnbull told ABC radio today.

The “fundamental flaw” at the heart of the federation is that the states are not accountable for what they spend, he said.

“The real issue here is one of political responsibility… if the states had to raise all of the money they spend themselves, they would spend that money much more wisely.”

Victorian Premier Daniel Andrews has also slammed the idea, questioning how the hospital and school funding crisis will be solved if there is no extra money on the table.

Andrews said the government was trying to distract voters from the fact it cut $80 billion from schools and hospitals in its 2014/15 budget.

“If no one is paying any more, how is it that everybody has more?” he said.

Social Services Minister Christian Porter countered that Andrews had described the idea as “worth looking at” several months ago.

Turnbull will wine and dine the premiers and chief ministers in Canberra on tonight as he attempts to convince them of the radical change.

For now, states would be limited by how much they could raise and workers wouldn’t see a difference in the tax they pay.

But in future, states could lower or raise income taxes to cover their growing costs.

Turnbull admitted it could result in different rates between states, citing existing differences in land tax, payroll tax and stamp duty.

NSW Premier Mike Baird is cautious about the plan and Queensland wants to see more detail.

Brian Owler, who heads the peak body for doctors, says the proposal looks like policy made on the run.

The AMA president is disappointed with the progress on hospital funding since Turnbull was installed as prime minister.

“The policy seems to be leaked out… a few days before a COAG meeting,” Owler told the ABC.

“I don’t think that is the way that policy should be developed, particularly when it’s such an important long-term policy.”

-with AAP

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