Budget 2014: Premiers want answers

Under fire: Prime Minister Tony Abbott and Treasurer Joe Hockey on Wednesday.Picture: ANDREW MEARES

Under fire: Prime Minister Tony Abbott and Treasurer Joe Hockey on Wednesday.Picture: ANDREW MEARES

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Liberal and Labor state leaders have united in demanding Prime Minister Tony Abbott explain an $80 billion cut to school and health funding in the federal budget.

Fuming state premiers demanded Mr Abbott call an emergency meeting of the Council of Australian Governments to explain the changes.

NSW Premier Mike Baird said the budget was a "kick in the guts" for his state, Queensland's leader Campbell Newman called it an attempt to push the states into backing a rise in GST, and South Australia's Premier Jay Weatherill says it's based on dishonesty.

"They should not outsource their problems to us," Mr Baird said.

NSW estimated the cost-shift could put a $1.2 billion hole in the June 17 state budget.

Mr Newman says the changes are unfair on Queenslanders.

"This is about a fair share of the income tax that mums and dads in Queensland pay coming back to fund their hospitals and their schools," he said.

And Mr Weatherill has vowed to lead a national campaign to persuade the federal government to reverse its cuts.

He said the budget included $5.5 billion in cuts to South Australian schools and hospitals over the next decade, which breached binding pacts made between the state and the commonwealth.

"At the heart of this budget is a deep dishonesty," he said.

In his first budget, Treasurer Joe Hockey announced Labor's so-called Gonski schools plan will be axed at the end of 2017, with the funding deals to be renegotiated.

The policy change is expected to save the Abbott government $30 billion over a decade.

Hospital funding guarantees with the states will also be renegotiated to save $50 billion.

Federal ministers have insisted that health and education spending would rise over time.

West Australian Premier Colin Barnett said he was happy to discuss a rise in the rate of the GST if a greater share of the consumption tax went to his state.

"At a national level the GST is probably the fairest way of funding some of these increases to health and education," he said.

Victorian Premier Denis Napthine endorsed an emergency COAG meeting but said there was no need for a rise in the GST rate.

"We want the situation where we are putting more money into health and education to be delivered to Victorians and not have that taken away by federal government," Dr Napthine said.

Mr Abbott told Parliament - while under fire from Labor over breaking election promises - his government was not going to be bound by the budget booby traps laid by the Rudd and Gillard governments.

"They are state government-run public hospitals, they are state government-run public schools," he said.

"What the people of Australia expect is grown-up adult governments in the states, just as they've now got a grown-up adult [federal] government."

Opposition Leader Bill Shorten said Mr Abbott should apologise to voters for misleading them over his pre-election promise not to cut health or education. AAP

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