Tony Crook (O'Connor, National Party) Share this | Link to this | Hansard source

My question is to the Treasurer. I refer to the Commonwealth Grants Commission's recent report and I ask: does the Treasurer think that it is fair that WA will receive just 55 per cent of its per capita GST share, while no other state or territory receives less than 90 per cent? Why does the GST formula penalise WA to the tune of millions of dollars for its mining royalties and yet New South Wales and Victoria's GST share is not affected by their gaming machine revenue?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his very important question. As Treasurer and as a Queenslander, I can say that I am a very strong supporter of what is termed horizontal fiscal equalisation. What do we mean by that? It is a very important principle, whereby stronger states and wealthier states throughout the life of the federation have supported weaker states. Queensland and Western Australia have been very significant beneficiaries of horizontal fiscal equalisation over the whole of our history. Indeed, you would not have the modern Western Australia or the modern Queensland of today if it had not been for all the financial support that has been provided by New South Wales and Victoria to those two states over a very long period of time. I am a strong supporter of this, because there are other states in our federation that are somewhat weaker when it comes to their capacity to raise revenue and their capacity to deliver services to their citizens. That is why we need to continue to support the independent Grants Commission, as we have done for dozens of years—20, 30, 40 or 50 years. We have continued to support that principle of the independent decision and distribution of moneys by the Grants Commission.

There has been a decision recently by the Grants Commission which does take down the per capita amount that goes to Western Australia, and it certainly has made additions to other states. For example, in this decision Queensland does a lot better, because of the huge impact of the floods in Queensland. I do not think anybody would deny the importance of that decision. But there is a principle that the member refers to, and that is why the Prime Minister has appointed a committee to look into the issues raised by the member, within the context of continuing to have horizontal fiscal equalisation.

I would just make this point. We await the outcome of that committee and we will study its report, but we know that, when you throw in all of the other financial assistance that states get apart from the GST, if you throw in the infrastructure funding and lots of other grants, the figure for Western Australia, even now, is 88c in the dollar, so there is still considerable assistance going to Western Australia. What I have to do is look after the national interest. That is what a national government has to do. We have appointed this committee to come down with their assessment of the proposals put by the member for O'Connor and the Western Australian Premier, but at the end of the day we will do what is right for all Australians.