Prime Minister Julia Gillard is threatening hold out on $450 million in reward payments to the states and territories that are stalling national reforms.
She said the failure of states to enact national workplace safety laws, which have been delayed for at least a year, was costing the country $43 million a week.
She warned that the federal government had “complete discretion” over final reward payments to the states and territories for reaching reform milestones.
“The commonwealth government is actively considering withholding reward payments from states which have failed to implement the COAG reform agenda for a seamless national economy,” Ms Gillard said in a statement to The Australian.
COAG agreed in 2008 that the payments would total $200 million this financial year and $250 million in 2012 to 2013.
Ms Gillard said a “seamless national economy” was the key to unlocking productivity dividends that the Productivity Commission estimated to be worth $4 billion a year.
She singled out NSW, Victoria and WA as “standing in the way” of a mobile labour force by failing to sign up to a national skills licensing system.
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