Commonwealth must not save NSW: Brumby

Victorian Premier John Brumby says the federal government should not offer NSW any "one-off payments" to help dig it out of its current financial strife. With NSW facing a $917 million deficit and the fallout from an unpopular mini-budget, Mr Brumby offered no sympathy for his NSW counterpart Nathan Rees.

He said next week's Council of Australian Governments (COAG) meeting should instead reward those states that had performed well, rather than subsidising failure. "We don't want any one-off deals in relation to COAG. We want every state treated the same and money provided to the states on the basis that they achieve specified
outcomes," Mr Brumby told the National Press Club in Canberra.
"The worst thing that COAG could do is hand out money to states which aren't prepared to invest in a way which guarantees specific outcomes going forward."

Mr Brumby's comments follow the weekend's suggestion by the Australian Industry
Group that the Rudd government take NSW outside the COAG process and devise a plan
to fix "a really sad state".
Only 10 weeks into the job, Mr Rees on Tuesday was facing speculation about his
leadership in the wake of last week's mini-budget.
A growing number of NSW ALP MPs are opposed to decisions contained within the
mini-budget, namely the decision to axe free travel to school for students.
Mr Rees denied his position was under threat.
Asked if he would still be around for the 2011 election, he replied: "Absolutely,
and beyond".
Mr Rees said he would stick by his mini-budget decisions even if they were unpopular
in the community, and called on his colleagues concerned about voter backlash to
"stiffen up".
"We've got a difficult situation. We need to explain to the community why some of
these decisions have to be made," he told reporters.
"The alternative is to send the state broke, and that is not an alternative for a
responsible government."
He said he would be happy to again explain the reasons behind the mini-budget
decisions to any backbencher who did not understand why they were necessary.
"In these situations you do the thinking before you deliver the result. The thinking
was done, time and time again," the premier said.
"Yes, I accept responsibility for some of those unpopular measures."
The NSW opposition is calling for Mr Rees to immediately scrap the plan to change
the school travel subsidy.
Opposition Leader Barry O'Farrell said savings should be made by cutting
bureaucratic waste rather than slugging families with new charges.
Australian Industry Group chief executive officer Heather Ridout said NSW accounted
for a third of the Australian economy and extra investment could ensure "a stable
path" forward.
Mr O'Farrell backed Ms Ridout's call.
In his speech, Mr Brumby outlined a reform agenda that would "modernise" an
"outmoded" COAG.
Key to his proposal are new performance arrangements that would hold states to
performance benchmarks, provide incentives for measurable improvements and encourage
states to strive for best practice.
"The global financial crisis should not put on hold the encouraging progress the
states, territories and the commonwealth have made in this new era of cooperative
federalism," Mr Brumby said.
Rather, next week's meeting should be seen as a "once-in-a-generation opportunity"
to respond to the big challenges facing Australia.
For federalism to flourish COAG had to reward states which performed well, rather
than merely compensating those which failed to invest and reform, he said.
"Throwing good money after bad can never be the answer. If we are to give
Australians the services they deserve and build for the future.
"Holding governments accountable for performance is only possible if COAG resists
the temptation to subsidise failure."