Australia - States not getting ripped off- Minchin

Figures showing grants and GST payments by the federal government to the states are at their lowest level in a decade are no surprise, NSW Treasurer Michael Costa says.

Federal Finance Minister Nick Minchin has rejected claims the commonwealth is ripping off the states, insisting payments have grown in real terms every year.

Senator Minchin says the commonwealth never promised the states they would receive a fixed proportion of gross domestic product (GDP).

His comments follow a report in The Australian Financial Review saying commonwealth funding to the states from all sources in 2001-02 amounted to 7.2 per cent of GDP, but fell to 6.5 per cent in 2006-07.

Mr Costa said these figures just highlighted what the NSW government has been saying about the commonwealth government ripping them off.

"This is an objective fact," he told ABC radio.

"It's reflected in the fact that every year we've got to put a budget together, and the amount of resources available via the commonwealth is reducing."

Mr Costa said the situation was only exacerbated because costs in areas of state responsibility, like health, were growing at two or three times the rate of inflation.

"If you project this out over a number of years, things will not be rosy in terms of state finances," he said.

Source : The Age - Melbourne,Victoria, Australia, dated 11/10/2007