❓ Dr. Nahan questions the Treasurer about the negative impact of the Commonwealth Grants Commission's recommendation to reduce WA's revenue by $1 billion, arguing it will harm the national economy. The Treasurer agrees, highlighting WA's significant contribution to national exports and tax revenue.
AnsweredQoN 45Legislative Assembly
QuestionView source ↗
COMMONWEALTH GRANTS COMMISSION —
RECOMMENDATION
45. Dr M.D. NAHAN to the Treasurer:
Before I ask my question I want to acknowledge the students from
Christian Brothers College, Fremantle, from the electorate of Fremantle.
Treasurer, I note
with concern the recent recommendations of the Commonwealth Grants Commission
to the Prime Minister, which would take nearly $1 billion of revenue out of
Western Australia over the next four years. Can the Treasurer please explain
how such a recommendation, if it were accepted by the Prime Minister, would
negatively impact on the national economy as a whole?
RECOMMENDATION
45. Dr M.D. NAHAN to the Treasurer:
Before I ask my question I want to acknowledge the students from
Christian Brothers College, Fremantle, from the electorate of Fremantle.
Treasurer, I note
with concern the recent recommendations of the Commonwealth Grants Commission
to the Prime Minister, which would take nearly $1 billion of revenue out of
Western Australia over the next four years. Can the Treasurer please explain
how such a recommendation, if it were accepted by the Prime Minister, would
negatively impact on the national economy as a whole?
AnswerView source ↗
I thank the member
for his question. It is a very good question because so often these issues are
characterised in terms of the Western Australian economy, but this will have a
major national impact. I know the member takes a special interest in these
things. The $1 billion loss we now face, based on the most recent Commonwealth
Grants Commission recommendation to the Labor Prime Minister, is on top of the
$12 billion loss we already knew we were facing—an extra $1 billion.
That will obviously be damaging to the state economy, but what does bear out
and what needs some serious thought in terms of whether the Prime Minister will
accept that recommendation or do what we say, which is to call a freeze on this
whole process and leave it at 72c in the dollar until this is sorted out, is
what kind of effect this could have on the national economy by damaging the
state economy. Some things are very important to note here for all members
present. This is something that we can all be fairly proud of: 20 per cent of
the nation's company tax comes from WA, with 10 per cent of the
population. That means that more corporate activity goes on in Western
Australia per capita than anywhere else in Australia. In 2010–11
Western Australia exported $118 billion worth of goods and services—40
per cent of total Australian exports of goods and services. For merchandise
exports, WA's share of the Australian total is 45 per cent. This all
means for the national economy that in 2010–11 Western Australia had a
trade surplus of $82.7 billion. In the same year the Australian nation had a
trade surplus of $20.9 billion—up, I might add, from a trade deficit of
$4.6 billion the year before. That means that without WA's contribution
to the national economy, a trade surplus would have been turned into a $62 billion
trade deficit. That $12 billion and the extra $1 billion we are now set to lose
is the money that we in this state would have been investing in our industries
to allow them to grow, which industries are the growth engine of the nation. It
makes absolutely no sense to punish the Western Australian economy in this
respect because it will have the effect of damaging the Australian national
economy.
We heard the Premier speak recently of about $138 billion
worth of construction projects underway. Deloitte estimates that we can add to
that a total of $270 billion as the present and potential value of all the
projects. This means that in Western Australia we are growing a whole range of
different industries. It is interesting in the context of the manufacturing
debate—many members on both this and the other side of the house have
raised this—that over the last decade in Australia the percentage of
manufacturing's claim to overall employment has decreased by 7.7 per
cent. Therefore, over the last decade manufacturing represents 7.7 per cent
less over the entire pool of employment than it did a decade ago. The only
place in Australia where manufacturing's percentage share of all
employment is growing, and has grown over the last decade, is Western
Australia. Western Australia is the only place where manufacturing industries,
against intense international competition, are succeeding and growing in their
share of total employment. Looking at some of the other areas of growth in the Western
Australian economy, we see that the WA professional, scientific and technical
services sector grew by 12 per cent last year. This is about the way in which
the second cluster of industries, the thousands of diverse enterprises that sit
around 540 mining and resources projects, are actually growing in very
difficult circumstances and against intense international competition. Scientific
and technical services grew by 12 per cent, seven per cent above the national
trend, and construction grew by 4.4 per cent. Other industries such as financial,
insurance and administrative services, all of them with firms that are now
coming to be based in Perth, are benefiting from the extra demand experienced
in our economy. For example, in retail, which is struggling nationwide, there
was 10 per cent growth last year in WA; that is three times the national
average. According to the Australian Department of Foreign Affairs and Trade,
last year the largest export industry growth from a base in WA was the
financial services sector, which grew 700 per cent. So what we have —
Several members interjected.
Mr
C.C. PORTER : It is obviously hilarious.
Mr
W.J. Johnston : It is.
Mr
C.C. PORTER : Is it hilarious that we have 700 per cent growth in the
financial services sector?
Mr
W.J. Johnston : What was the base?
Mr
C.C. PORTER : It was a very small base; it was $1 million —
Several members interjected.
Mr
C.C. PORTER : It increased from $1 million to $7 million —
Several members interjected.
Mr
C.C. PORTER : What that means —
Several members interjected.
The
SPEAKER : I think there are two lessons, members. The first lesson would be
the longer you spend on your feet, the more likely it is that there will be
interjections, Treasurer. The second lesson would be for those on the left who
wish to ask a question. Last week's rules apply: if members interject
on a question being asked, they will be called. Treasurer, I will give you a
few seconds to conclude your remarks.
Mr
C.C. PORTER : I take that to mean 59 seconds, Mr Speaker!
Seven hundred per cent growth in the
financial services sector means that from nowhere we have an export industry in
financial services, and that is supposed to be something to be mocked by the
opposition. We are showing that we are growing the economy. The very important
and salient point here is what we heard in debate about the automotive industry
and the fact that in 2008 the Productivity Commission noted that there were $1 billion
worth of tariff benefits to that industry and $1 billion worth of direct
subsidies, yet that is an industry in decline. We have a whole range of
industries, including manufacturing, that are growing, yet in 2008 the automotive
industry was getting $2 billion worth of assistance and our industries are
having $12 billion, plus $1 billion, ripped out from under their feet, and that
is a national disgrace.
for his question. It is a very good question because so often these issues are
characterised in terms of the Western Australian economy, but this will have a
major national impact. I know the member takes a special interest in these
things. The $1 billion loss we now face, based on the most recent Commonwealth
Grants Commission recommendation to the Labor Prime Minister, is on top of the
$12 billion loss we already knew we were facing—an extra $1 billion.
That will obviously be damaging to the state economy, but what does bear out
and what needs some serious thought in terms of whether the Prime Minister will
accept that recommendation or do what we say, which is to call a freeze on this
whole process and leave it at 72c in the dollar until this is sorted out, is
what kind of effect this could have on the national economy by damaging the
state economy. Some things are very important to note here for all members
present. This is something that we can all be fairly proud of: 20 per cent of
the nation's company tax comes from WA, with 10 per cent of the
population. That means that more corporate activity goes on in Western
Australia per capita than anywhere else in Australia. In 2010–11
Western Australia exported $118 billion worth of goods and services—40
per cent of total Australian exports of goods and services. For merchandise
exports, WA's share of the Australian total is 45 per cent. This all
means for the national economy that in 2010–11 Western Australia had a
trade surplus of $82.7 billion. In the same year the Australian nation had a
trade surplus of $20.9 billion—up, I might add, from a trade deficit of
$4.6 billion the year before. That means that without WA's contribution
to the national economy, a trade surplus would have been turned into a $62 billion
trade deficit. That $12 billion and the extra $1 billion we are now set to lose
is the money that we in this state would have been investing in our industries
to allow them to grow, which industries are the growth engine of the nation. It
makes absolutely no sense to punish the Western Australian economy in this
respect because it will have the effect of damaging the Australian national
economy.
We heard the Premier speak recently of about $138 billion
worth of construction projects underway. Deloitte estimates that we can add to
that a total of $270 billion as the present and potential value of all the
projects. This means that in Western Australia we are growing a whole range of
different industries. It is interesting in the context of the manufacturing
debate—many members on both this and the other side of the house have
raised this—that over the last decade in Australia the percentage of
manufacturing's claim to overall employment has decreased by 7.7 per
cent. Therefore, over the last decade manufacturing represents 7.7 per cent
less over the entire pool of employment than it did a decade ago. The only
place in Australia where manufacturing's percentage share of all
employment is growing, and has grown over the last decade, is Western
Australia. Western Australia is the only place where manufacturing industries,
against intense international competition, are succeeding and growing in their
share of total employment. Looking at some of the other areas of growth in the Western
Australian economy, we see that the WA professional, scientific and technical
services sector grew by 12 per cent last year. This is about the way in which
the second cluster of industries, the thousands of diverse enterprises that sit
around 540 mining and resources projects, are actually growing in very
difficult circumstances and against intense international competition. Scientific
and technical services grew by 12 per cent, seven per cent above the national
trend, and construction grew by 4.4 per cent. Other industries such as financial,
insurance and administrative services, all of them with firms that are now
coming to be based in Perth, are benefiting from the extra demand experienced
in our economy. For example, in retail, which is struggling nationwide, there
was 10 per cent growth last year in WA; that is three times the national
average. According to the Australian Department of Foreign Affairs and Trade,
last year the largest export industry growth from a base in WA was the
financial services sector, which grew 700 per cent. So what we have —
Several members interjected.
Mr
C.C. PORTER : It is obviously hilarious.
Mr
W.J. Johnston : It is.
Mr
C.C. PORTER : Is it hilarious that we have 700 per cent growth in the
financial services sector?
Mr
W.J. Johnston : What was the base?
Mr
C.C. PORTER : It was a very small base; it was $1 million —
Several members interjected.
Mr
C.C. PORTER : It increased from $1 million to $7 million —
Several members interjected.
Mr
C.C. PORTER : What that means —
Several members interjected.
The
SPEAKER : I think there are two lessons, members. The first lesson would be
the longer you spend on your feet, the more likely it is that there will be
interjections, Treasurer. The second lesson would be for those on the left who
wish to ask a question. Last week's rules apply: if members interject
on a question being asked, they will be called. Treasurer, I will give you a
few seconds to conclude your remarks.
Mr
C.C. PORTER : I take that to mean 59 seconds, Mr Speaker!
Seven hundred per cent growth in the
financial services sector means that from nowhere we have an export industry in
financial services, and that is supposed to be something to be mocked by the
opposition. We are showing that we are growing the economy. The very important
and salient point here is what we heard in debate about the automotive industry
and the fact that in 2008 the Productivity Commission noted that there were $1 billion
worth of tariff benefits to that industry and $1 billion worth of direct
subsidies, yet that is an industry in decline. We have a whole range of
industries, including manufacturing, that are growing, yet in 2008 the automotive
industry was getting $2 billion worth of assistance and our industries are
having $12 billion, plus $1 billion, ripped out from under their feet, and that
is a national disgrace.
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