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Bullying of states reveals Budget blowout.



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Media Release

BOB McMULLAN MP SHADOW TREASURER SHADOW MINISTER FOR THE ARTS

MEMBER FOR FRASER

27 March 2003

BULLYING OF STATES REVEALS BUDGET BLOWOUT

Treasurer Peter Costello’s threat to withhold national competition payments to the states is a product of his loss of control of the Budget.

Mr Costello has linked hundreds of millions of dollars in competition payments to the Government’s water reform agenda, repeating a threat propagated by National Party Leader John Anderson.

Mr Costello and Mr Anderson are trying to bully the states into paying for a Federal Government election promise to provide compensation to farmers in return for water reform.

But their claim that the Commonwealth is justified in directing the states to make these payments under national competition agreements is completely spurious.

The pressure on the Budget is reinforced by the latest Macquarie Bank research note, which predicts the 2003-04 Budget surplus will be $2 billion less than the Government’s forecast at the time of the Mid Year Review last November of a $4.9 billion cash surplus.

The Treasurer should come clean over the state of the Budget, and should refrain at from using the states as scapegoats for his own mismanagement at tomorrow’s meeting of State and Federal treasurers.

Further information: Robert Garran (02) 6277 4803, 0419 692 504

TELEPHONE: (02) 6277 4803 ã FACSIMILE: (02) 6277 8496