Morrison threatens to cut money for states against fracking

GREEN groups have slammed Treasurer Scott Morrison for threatening to financially penalise state and territory governments if they limit fracking or other gas exploration.

Mr Morrison has warned the states a Productivity Commission inquiry into GST distribution will take into account their responses to natural resources, The Australian has reported.

"The Productivity Commission is looking at whether the way the states and territories operate is giving them a leave pass under the GST formula for not getting on and doing things," Mr Morrison.

"When you have states that get on and do things, should they be penalised by getting less GST?"

GetUp's Miriam Lyons accused the Turnbull government of threatening the states with cuts to school and hospitals "in order to give its mates in the gas industry free rein over our land and water".

"The Coalition is using every trick in the book to prop up polluting energy from last century, now even using funding for schools and hospitals as a threat," she said.

"It's outrageous and the community won't stand for it.

"They've already lost the argument on fracking.

"Everyday Australians aren't allowed to extract wealth from wherever they want at the expense of our land, air and water - and neither should greedy gas corporations.

"If the Turnbull government was serious about reducing power prices it would embrace renewables."

Greenpeace Australia spokeswoman Nikola Casule said it was another example of the willingness of the Federal Government to use public money to support the "destructive and selfish fossil fuel industry".

Georgina Woods from anti-coal seam gas group Lock the Gate Alliance said: "This is an outrageous move by the Federal Government to blackmail state and territory governments into accepting fracking, regardless of the devastating impact it will have on farmland and water resources."