Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer confirm that in February this year he directed the Commonwealth Grants Commission not to reduce Western Australia's GST payments as a result of Western Australia's increases in iron ore fines royalty rates? Now that the Treasurer has had a meeting, a phone call, a Treasury brief and in fact wrote to the Grants Commission on the subject, how can he still have claimed last Friday that he had no notice of the actions of the Western Australian government?

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

Very simply, because I did not. It is pretty simple, because when the Western Australian government took this decision they did not consult with us at all, and they took it knowing that when they increased the rate for fines the Grants Commission would take the action of reducing the increase in revenue. They are now acutely embarrassed because the correspondence shows very clearly that they understood that. What that means is that they have been caught out being too smart by half—playing politics and not looking after the interests of the taxpayers of Western Australia. They are not looking after Western Australia but playing politics. We have done the right thing by the people of Western Australia, and the Western Australian Premier has done the wrong thing. He has done the wrong thing because he has produced a bodgie budget based on unrealistic exchange rate evaluations, and what that means is that they are in deep trouble.