❓ The Treasurer responds positively to the GST review panel's interim report, highlighting the unfair GST distribution affecting WA's budget and advocating for reforms to the allocation formula. The response also notes support from the federal Leader of the Opposition.
AnsweredQoN 168Legislative Assembly
QuestionView source ↗
GOODS AND
SERVICES TAX — REVIEW PANEL INTERIM REPORT
168. Mrs L.M. HARVEY to the Treasurer:
Given that there are few more important issues facing the
state's financial future than the GST distribution and given that WA's
unfair treatment has seen it lose $600 million off this year's budget
alone, can the Treasurer indicate what the Liberal–National government's
response is to the GST review panel's interim report?
SERVICES TAX — REVIEW PANEL INTERIM REPORT
168. Mrs L.M. HARVEY to the Treasurer:
Given that there are few more important issues facing the
state's financial future than the GST distribution and given that WA's
unfair treatment has seen it lose $600 million off this year's budget
alone, can the Treasurer indicate what the Liberal–National government's
response is to the GST review panel's interim report?
AnswerView source ↗
I thank the member for her question. I think, in summary, the
response from this government to the GST panel review report is largely
positive. In fact, it is a very, very important document for Western Australia,
as the member has noted. This year, our share of the GST will go from 72c in
the dollar to about 55c in the dollar, a loss of $600 million literally
overnight off our bottom line for our budget. We project the loss out to 2015–16
to be, compared with our population share, $16 billion. That is not a loss that
this state can suffer and still drive the national economy in the way that it
does. Right now, we are getting the same amount of GST as the Northern
Territory—the Northern Territory with one per cent of the Australian
population, and we with 10 per cent and the most productive economy in the
nation.
That GST review panel report is very, very positive for
Western Australia. I will just make three quick points about it. The first is
that it absolutely destroys the contention that has been put consistently by
South Australia, by Tasmania and by the Australian Capital Territory that there
should be no change whatsoever in the present situation. This report says that
that is absolutely untenable. The second thing that it does that is absolutely
critical for Western Australia is that it recognises something that we have
been saying for a very long time; that is, the present formula applied by the
Commonwealth Grants Commission does not take anything near the right account of
the spending that we engage in for infrastructure and services that keep the
mining industry growing and supporting the rest of the nation. For those who
are interested to read the review report, the most important sentences are at
page 101 —
The Panel recognises the importance of States having the capacity to
provide infrastructure to enable development of mineral resources.
The report goes on —
This assessment of infrastructure costs does not therefore directly
account for the costs borne by States for mining related infrastructure
So we generate the wealth, and it is taken from us in
diminished GST receipts, but there is no compensation for the massive spending
on the infrastructure and services that generate the wealth in the first place.
The third thing, member, is that the report leaves open a
range of live options for reform, all of which are positive for Western
Australia. These include readjusting the Commonwealth Grants Commission formula
to take into account Western Australia's infrastructure spending;
quarantining some amount of royalty revenue to keep it completely outside the
grants commission formula; completely redefining what the formula should do,
moving away from equalisation to a system of comparative capacity; limiting
relativity changes so that no state would receive a lower nominal amount of GST
than it did in the previous year—something similar to the floor that
the Premier has been suggesting for some time; and, finally, the possibility of
a donor–recipient model, under which the donor states would try to
reach agreement among themselves and come up with a division to the recipient
states that is more credible and sensible.
I would say that one other thing has happened today—it
just as a matter of chance happened—and that is that the federal Leader
of the Opposition is in town. I must say that, as a member of a conservative
government, I have waited with some interest to hear what he may say. He is
quoted as saying this —
''I think that what ought
to be very seriously considered by the government right now —
That is, the federal Labor government right now —
is the proposal that all the
Liberal states have put up, that the GST revenue should be distributed on what
is closer to a per capita arrangement.
Mr Abbott went on —
''This is the unified
position of the Coalition premiers. I think it makes a lot of sense.''
That would be very, very good for Western Australia.
Several members interjected.
Mr C.C. PORTER :
Sorry. What was that?
Several members interjected.
Mr C.C. PORTER :
You know, members, I was getting a bit worried about losing $600 million. But
then I saw that there was a press conference at the airport, and the Leader of
the Opposition flew to Canberra and spoke with the Prime Minister —
Mr M. McGowan : No,
I did not. You have got it wrong.
Mr C.C. PORTER :
Did she say that she thinks that what ought to be very seriously considered
right now is the proposal that the Liberal states have put up that the GST
revenue should be distributed on what is closer to a per capita arrangement?
Did the Prime Minister say that to the Leader of the Opposition?
Mr M. McGowan : No,
you have got it wrong. I met Nick Greiner and John Brumby and I put the case
for Western Australia. Those are the people I went to see. You need to read
more carefully.
Several members interjected.
Mr C.C. PORTER :
Given that this is so important, I am presuming that the Leader of the Opposition
has spoken to the Prime Minister on this issue.
Mr M. McGowan : I
have spoken to her, yes.
Mr C.C. PORTER : Is
the Prime Minister going to make a statement —
Mr M. McGowan : You
have just endorsed the report she came up with!
Ms R. Saffioti : Is
that a commitment?
Mr C.C. PORTER :
What ought to be considered very seriously is the proposal that all Liberal
states —
Several members interjected.
Mr C.C. PORTER :
This is the most —
Several members interjected.
Mr C.C. PORTER : Mr
Speaker!
The SPEAKER :
Order! Member for Forrestfield, I formally call you to order for the first time
today. Treasurer, you have had six minutes on your feet.
Mr C.C. PORTER :
That statement from Mr Abbott is the most positive development in this debate.
Mr P.C. Tinley interjected.
The SPEAKER : Take
a seat, Treasurer. Member for Willagee, I formally call you to order for the
first time.
Mr M.P. Whitely interjected.
The SPEAKER :
Member for Bassendean, I formally call you to order for the first time.
Mr T.R. Buswell interjected.
The
SPEAKER : Minister for Housing, I formally call you to order for the
first time. Members, I can recall about six weeks ago some difficulties that
some people were having in this place about the number of questions we were
getting through. Many of you again today have demonstrated the reason why it
takes a long time to get questions through the place.
Mr C.C. PORTER : In
summary, the news is good; it is just that the good news is not coming from the
federal Labor Party.
response from this government to the GST panel review report is largely
positive. In fact, it is a very, very important document for Western Australia,
as the member has noted. This year, our share of the GST will go from 72c in
the dollar to about 55c in the dollar, a loss of $600 million literally
overnight off our bottom line for our budget. We project the loss out to 2015–16
to be, compared with our population share, $16 billion. That is not a loss that
this state can suffer and still drive the national economy in the way that it
does. Right now, we are getting the same amount of GST as the Northern
Territory—the Northern Territory with one per cent of the Australian
population, and we with 10 per cent and the most productive economy in the
nation.
That GST review panel report is very, very positive for
Western Australia. I will just make three quick points about it. The first is
that it absolutely destroys the contention that has been put consistently by
South Australia, by Tasmania and by the Australian Capital Territory that there
should be no change whatsoever in the present situation. This report says that
that is absolutely untenable. The second thing that it does that is absolutely
critical for Western Australia is that it recognises something that we have
been saying for a very long time; that is, the present formula applied by the
Commonwealth Grants Commission does not take anything near the right account of
the spending that we engage in for infrastructure and services that keep the
mining industry growing and supporting the rest of the nation. For those who
are interested to read the review report, the most important sentences are at
page 101 —
The Panel recognises the importance of States having the capacity to
provide infrastructure to enable development of mineral resources.
The report goes on —
This assessment of infrastructure costs does not therefore directly
account for the costs borne by States for mining related infrastructure
So we generate the wealth, and it is taken from us in
diminished GST receipts, but there is no compensation for the massive spending
on the infrastructure and services that generate the wealth in the first place.
The third thing, member, is that the report leaves open a
range of live options for reform, all of which are positive for Western
Australia. These include readjusting the Commonwealth Grants Commission formula
to take into account Western Australia's infrastructure spending;
quarantining some amount of royalty revenue to keep it completely outside the
grants commission formula; completely redefining what the formula should do,
moving away from equalisation to a system of comparative capacity; limiting
relativity changes so that no state would receive a lower nominal amount of GST
than it did in the previous year—something similar to the floor that
the Premier has been suggesting for some time; and, finally, the possibility of
a donor–recipient model, under which the donor states would try to
reach agreement among themselves and come up with a division to the recipient
states that is more credible and sensible.
I would say that one other thing has happened today—it
just as a matter of chance happened—and that is that the federal Leader
of the Opposition is in town. I must say that, as a member of a conservative
government, I have waited with some interest to hear what he may say. He is
quoted as saying this —
''I think that what ought
to be very seriously considered by the government right now —
That is, the federal Labor government right now —
is the proposal that all the
Liberal states have put up, that the GST revenue should be distributed on what
is closer to a per capita arrangement.
Mr Abbott went on —
''This is the unified
position of the Coalition premiers. I think it makes a lot of sense.''
That would be very, very good for Western Australia.
Several members interjected.
Mr C.C. PORTER :
Sorry. What was that?
Several members interjected.
Mr C.C. PORTER :
You know, members, I was getting a bit worried about losing $600 million. But
then I saw that there was a press conference at the airport, and the Leader of
the Opposition flew to Canberra and spoke with the Prime Minister —
Mr M. McGowan : No,
I did not. You have got it wrong.
Mr C.C. PORTER :
Did she say that she thinks that what ought to be very seriously considered
right now is the proposal that the Liberal states have put up that the GST
revenue should be distributed on what is closer to a per capita arrangement?
Did the Prime Minister say that to the Leader of the Opposition?
Mr M. McGowan : No,
you have got it wrong. I met Nick Greiner and John Brumby and I put the case
for Western Australia. Those are the people I went to see. You need to read
more carefully.
Several members interjected.
Mr C.C. PORTER :
Given that this is so important, I am presuming that the Leader of the Opposition
has spoken to the Prime Minister on this issue.
Mr M. McGowan : I
have spoken to her, yes.
Mr C.C. PORTER : Is
the Prime Minister going to make a statement —
Mr M. McGowan : You
have just endorsed the report she came up with!
Ms R. Saffioti : Is
that a commitment?
Mr C.C. PORTER :
What ought to be considered very seriously is the proposal that all Liberal
states —
Several members interjected.
Mr C.C. PORTER :
This is the most —
Several members interjected.
Mr C.C. PORTER : Mr
Speaker!
The SPEAKER :
Order! Member for Forrestfield, I formally call you to order for the first time
today. Treasurer, you have had six minutes on your feet.
Mr C.C. PORTER :
That statement from Mr Abbott is the most positive development in this debate.
Mr P.C. Tinley interjected.
The SPEAKER : Take
a seat, Treasurer. Member for Willagee, I formally call you to order for the
first time.
Mr M.P. Whitely interjected.
The SPEAKER :
Member for Bassendean, I formally call you to order for the first time.
Mr T.R. Buswell interjected.
The
SPEAKER : Minister for Housing, I formally call you to order for the
first time. Members, I can recall about six weeks ago some difficulties that
some people were having in this place about the number of questions we were
getting through. Many of you again today have demonstrated the reason why it
takes a long time to get questions through the place.
Mr C.C. PORTER : In
summary, the news is good; it is just that the good news is not coming from the
federal Labor Party.
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