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

My question is to the Treasurer. Will the Treasurer direct the Grants Commission not to reduce Western Australia's share of the GST and not to penalise Western Australia as a result of its removing the concessions on iron ore fines?

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

I thank the shadow Treasurer for the question. No, I will not direct the Grants Commission to do that, and for the shadow Treasurer to try, as he has done in this House in the past few days, to draw some comparison between a previous direction and the current situation represents a complete misunderstanding by those on that side of the House of what is going on in terms of the taxation of fines in Western Australia.

There are fines which are covered by state agreements, and the direction I gave to the Grants Commission related to fines covered by state agreements; it did not relate to other fines. Now that the Western Australian government itself has decided to treat all fines equally—that is, the fines covered by state agreements and the other fines—so should the Grants Commission. That is the factual situation that those opposite have not understood at any stage through this debate. They have been on a frolic about it, but the situation is now clear to everybody: the Western Australian government on eight occasions leading up to its budget a couple of weeks ago said to the public that it would not be increasing the royalty on fines. Eight times it said that prior to the budget, when it increased the royalty for fines. It even made a submission to the Grants Commission at the end of last year saying that it would not do it and that, if that action were taken, it would lead to a sovereign risk.

That is why those on the outside of the House are so embarrassed at the moment. This time last year they were running around Australia claiming that we were going to tax the mining companies too much and that they were being taxed too much already, but now we have the Western Australian Premier going out and doing precisely what they have opposed: taxing the mining companies by increasing royalties, and that has been denied by the Western Australian Premier on eight occasions.

Those opposite simply do not understand what they are talking about in this area, and they are acutely embarrassed by the behaviour of the Western Australian government and by their own behaviour in this House. Of course, on this question they are divided. We can see that every day. They are even too divided to turn up to their own divisions.