❓ Question regarding the McGowan government's plan to utilise the new GST deal to benefit Western Australians and address state debt, while contrasting it with alternative proposals. The Treasurer's answer thanks public servants, highlights the ongoing challenge with the Commonwealth Grants Commission, and criticises the opposition's inconsistent advice on how to spend the funds.
AnsweredQoN 931Legislative Assembly
QuestionView source ↗
GST DISTRIBUTION —
STATE FINANCES
931. Dr A.D. BUTI to the Treasurer:
I refer to the McGowan Labor
government's commitment to getting the state's finances back on
track and paying down the record debt inherited from the previous Liberal–National
government. Can the Treasurer outline to the house how the McGowan Labor
government will ensure that every Western Australian benefits from the new
goods and services tax deal we have secured; and can the Treasurer advise the
house whether he is aware of any alternative plans that have been peddled that
would do nothing to address the state's debt problem?
STATE FINANCES
931. Dr A.D. BUTI to the Treasurer:
I refer to the McGowan Labor
government's commitment to getting the state's finances back on
track and paying down the record debt inherited from the previous Liberal–National
government. Can the Treasurer outline to the house how the McGowan Labor
government will ensure that every Western Australian benefits from the new
goods and services tax deal we have secured; and can the Treasurer advise the
house whether he is aware of any alternative plans that have been peddled that
would do nothing to address the state's debt problem?
AnswerView source ↗
I thank the member for Armadale for
the question.
I feel a little as though my thunder
has been stolen by the Premier on a couple of points, but it is the right of
the Premier to steal the thunder of other members of cabinet. I congratulate
all members in Western Australia, as the Premier has already done. Before I make
a few comments, I want to congratulate a group of very dedicated public
servants who have worked for consecutive governments in the Department of
Treasury and who have done all the modelling work and put all the effort into
the drafting of submissions—everything. Some of them go back as far as
32 years in the revenue and intergovernmental relations team within the
Department of Treasury and are led by its very able director, Kirsty Laurie. I thank
Alex Scherini, who has been there for 30 years; Michael Schipp; Peter Cox, who
has been there for 32 years; Rebecca Gale; Bruce Horwood; Jake Prendergast;
Mark Spencer; and Reyno Seymore. Anyone who has been a minister certainly
appreciates the effort that our public servants put into making the case on
behalf of the government of the day. It is not just these people who will,
hopefully, revel and celebrate, albeit briefly, this significant victory by the
Western Australian government because this is an ongoing challenge that we face
vis-a-vis the Commonwealth Grants Commission. The Commonwealth Grants
Commission at no point accepted there was a problem with the system—none.
It would come over here and defend it day in, day out, which is why it required
political leadership to get this outcome. Indeed, the Commonwealth Grants
Commission sent a signal to Western Australia the day after the bill passed the
Senate, by releasing its latest discussion paper that suggests that it will
return to a very flawed method of considering our iron ore royalties by
grouping them with coal. That will effectively assume a higher royalty rate for
iron ore, and if that comes in post-2020–21 it will see a couple of
hundred million dollars a year taken out of the WA budget. The Commonwealth
Grants Commission is going to do all it can to unwind this political solution
that has been resolved between the state and federal governments, and people
within Treasury will be protecting Western Australians from the black box that
is the Commonwealth Grants Commission.
I want to make one point, because I have
been intrigued by a vast array of advice to the government about where the
money could be spent. I think perhaps the member for Churchlands was most verbose
by saying it should be spent on health, education, law and order, regional
services and reduced debt! Once the money is spent, member for Churchlands,
there is not much left to reduce debt! According to my notes, the shadow
Treasurer said —
Mark McGowan must now commit to
easing pressure on household charges in future budgets.
The Leader of the Opposition said it
should pay down debt and ease financial pressure on households. But the Premier
has already outlined the best one: the wonderful media statement —
Several members interjected.
The SPEAKER : Member for
Churchlands, I have warned you three times. I call you to the order for the
first time.
Mr B.S. WYATT : It was a wonderful
media statement of 5 July 2018—I think the Premier might be right; it
might have been put out by the office without any consultation with the Leader
of the Opposition—with a headline in bold ''McGowan must use GST
windfall to pay down debt''. The first sentence reads —
The McGowan Government should
allocate any � revenue from the Federal Government's planned changes to
the GST distribution to pay down debt, the State Opposition said today.
The state opposition said that! I assumed
that was what all the opposition said, but they are all now running around
finding all sorts of wonderful things upon which to spend the money. However,
what we learned under the term of the former government is that you cannot
spend a dollar twice, so we will not be doing that—or three or four times,
as the former government's budgets did, Liberal Party of Western Australia.
We are allocating those top-up
payments to the debt reduction account. That is the one sure-fire way every
single Western Australian will benefit from
this significant reform to federal–state relations. That will hopefully
ensure that we do not get a sort of
rapacious Liberal Party in the future, wanting to get its hands on it and
spending it on all sorts of different
things—oh, and at the same time paying down debt. That is why the
former government lost government with the authority that it did. We
will be treating this money with the respect it deserves. It sounds like a lot
and it is a lot, but let us put it in perspective; it is about six months'
funding for the health budget of Western Australia. Let us take that and put it
to good use by ensuring debt gets paid and interest payments are therefore
reduced.
the question.
I feel a little as though my thunder
has been stolen by the Premier on a couple of points, but it is the right of
the Premier to steal the thunder of other members of cabinet. I congratulate
all members in Western Australia, as the Premier has already done. Before I make
a few comments, I want to congratulate a group of very dedicated public
servants who have worked for consecutive governments in the Department of
Treasury and who have done all the modelling work and put all the effort into
the drafting of submissions—everything. Some of them go back as far as
32 years in the revenue and intergovernmental relations team within the
Department of Treasury and are led by its very able director, Kirsty Laurie. I thank
Alex Scherini, who has been there for 30 years; Michael Schipp; Peter Cox, who
has been there for 32 years; Rebecca Gale; Bruce Horwood; Jake Prendergast;
Mark Spencer; and Reyno Seymore. Anyone who has been a minister certainly
appreciates the effort that our public servants put into making the case on
behalf of the government of the day. It is not just these people who will,
hopefully, revel and celebrate, albeit briefly, this significant victory by the
Western Australian government because this is an ongoing challenge that we face
vis-a-vis the Commonwealth Grants Commission. The Commonwealth Grants
Commission at no point accepted there was a problem with the system—none.
It would come over here and defend it day in, day out, which is why it required
political leadership to get this outcome. Indeed, the Commonwealth Grants
Commission sent a signal to Western Australia the day after the bill passed the
Senate, by releasing its latest discussion paper that suggests that it will
return to a very flawed method of considering our iron ore royalties by
grouping them with coal. That will effectively assume a higher royalty rate for
iron ore, and if that comes in post-2020–21 it will see a couple of
hundred million dollars a year taken out of the WA budget. The Commonwealth
Grants Commission is going to do all it can to unwind this political solution
that has been resolved between the state and federal governments, and people
within Treasury will be protecting Western Australians from the black box that
is the Commonwealth Grants Commission.
I want to make one point, because I have
been intrigued by a vast array of advice to the government about where the
money could be spent. I think perhaps the member for Churchlands was most verbose
by saying it should be spent on health, education, law and order, regional
services and reduced debt! Once the money is spent, member for Churchlands,
there is not much left to reduce debt! According to my notes, the shadow
Treasurer said —
Mark McGowan must now commit to
easing pressure on household charges in future budgets.
The Leader of the Opposition said it
should pay down debt and ease financial pressure on households. But the Premier
has already outlined the best one: the wonderful media statement —
Several members interjected.
The SPEAKER : Member for
Churchlands, I have warned you three times. I call you to the order for the
first time.
Mr B.S. WYATT : It was a wonderful
media statement of 5 July 2018—I think the Premier might be right; it
might have been put out by the office without any consultation with the Leader
of the Opposition—with a headline in bold ''McGowan must use GST
windfall to pay down debt''. The first sentence reads —
The McGowan Government should
allocate any � revenue from the Federal Government's planned changes to
the GST distribution to pay down debt, the State Opposition said today.
The state opposition said that! I assumed
that was what all the opposition said, but they are all now running around
finding all sorts of wonderful things upon which to spend the money. However,
what we learned under the term of the former government is that you cannot
spend a dollar twice, so we will not be doing that—or three or four times,
as the former government's budgets did, Liberal Party of Western Australia.
We are allocating those top-up
payments to the debt reduction account. That is the one sure-fire way every
single Western Australian will benefit from
this significant reform to federal–state relations. That will hopefully
ensure that we do not get a sort of
rapacious Liberal Party in the future, wanting to get its hands on it and
spending it on all sorts of different
things—oh, and at the same time paying down debt. That is why the
former government lost government with the authority that it did. We
will be treating this money with the respect it deserves. It sounds like a lot
and it is a lot, but let us put it in perspective; it is about six months'
funding for the health budget of Western Australia. Let us take that and put it
to good use by ensuring debt gets paid and interest payments are therefore
reduced.
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