The Wire

The state governments are in a tight spot. Their expenses on services, such as health, education and policing, are costing more than the federal government is giving them. On the weekend, Prime Minister Abbott said there were two ways to fix this: the federal government could either: assume some of the state’s responsibilities, or give the states a raise. In all likelihood, this means increasing the GST. The Opposition is opposed to a GST increase, because they say it disproportionality hurts lower income earners.