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Wednesday, 31 August 1994
Page: 728

Senator ABETZ (6.47 p.m.) —I rise to join in the debate concerning the States Grants (General Purposes) Bill 1994. I do so to highlight, firstly, the shameful financial treatment of the states by this government and, secondly, how the outrageous concept of compulsory student unionism is being perpetuated through this bill.

  I understand that the states get funding for their general purposes through this bill each year because the Commonwealth taxes and raises more money and therefore has to provide money to the states by way of reimbursement—the vertical fiscal imbalance that my colleague Senator Short referred to. This bill, in keeping with that practice, gives effect to most matters agreed upon at the Premiers Conference and the Loan Council meeting in March, some five months ago.

  This bill provides to the states those funds over which they purportedly have the right to exercise priorities. Other moneys given to the states under specific purpose bills designate the areas on which the states ought to spend the money. The general purpose bill is designed to allow the states some agenda setting and prioritising.

  In my budget speech I lamented the fact that the states were suffering from the cuts in expenditure whilst the federal government was ever increasing its expenditure. Combined with the lesser amount being received by the states, more and more money was being tied up by way of specific purpose grants and tied grants. In effect, that is transforming the states into political units. This practice is being actively pursued by Labor and is striking at the very heart of our federalist system of government—a system based on decentralisation and checks and balances. Labor, the party that believes that all wisdom resides in Canberra and that the states and the Senate ought to be abolished, has no qualms about this neutering of the states. Mr Acting Deputy President, given the time, I seek leave to continue my remarks.

  Leave granted; debate adjourned.

  Bills received from the House of Representatives.