House debates

Wednesday, 27 August 2014

Adjournment

Goods and Services Tax

7:54 pm

Photo of Dennis JensenDennis Jensen (Tangney, Liberal Party) Share this | | Hansard source

Constituents tell me that they cannot fathom the scandal that is the current GST carve-up. On the WA Liberal side, we have a united team. There is one simple truth: that money is the lifeblood of the nation. Fiscal infrastructures are the arteries and veins; however, Labor ignorance and intransigence has left a tourniquet on WA. The state is growing economically and demographically, with huge attendant infrastructure requirements. One thousand five hundred people per week move to WA, yet the GST moneys paid back to WA state coffers continues to fall from a high of 98c 11 years ago to just 37c now, and heading to 11c in the dollar. This is lunacy. The whole idea underpinning the GST was that the states would have a revenue growth tax. Yet what one has in WA is a state becoming more and more reliant on the highly volatile iron ore price and less so on GST receipts—exactly the opposite of the intended purpose of the GST. Normally when a product is so unrepresentative of what it says it is on the box, one would just return the product to the shop. One could claim a 'not fit for purpose' warranty. This is where the debate should go in relation to the GST and the carve-up.

I am heartened by the renewed vigour WA state Treasurer, Dr Mike Nahan, has taken to this war. Indeed, those voices calling for reform are growing. Most important though is the voice of the Prime Minister. This is why every Western Australian is eagerly awaiting the white paper on Federation. Judge a man not by what he says but by what he does, and the Prime Minister is demonstrating by actions such as the Perth Freight Link announcement that he gets WA. The white paper must consider issues such as the nature of regressive taxation and its negative impacts of growth, increasing/decreasing the rate, as well as the scope of taxation and broadening the base.

Liberals are never happy with an approach that seeks to slow down the fastest runner. Today it is apt that WA gets the attention of the nation once more, 100 years since troops sailed from Albany to fight for a nation newly born. WA did much of the heavy lifting then, and it continues to do so today: a wealthy state with a gross state product per capita 50 per cent above the gross domestic product per capita; an industrious state with 73 per cent of all Australian exports to China coming from it. Cost-benefit and risk-benefit analyses should be the foundation of public policy decisions regarding questions of capital allocation. Foremost in the minds of the mandarins should be where one can get the highest return on human, physical, financial and social capital.

The system as it is rewards inefficiency, regulatory capture and rent-seeking behaviours. Bad decisions are rewarded under the current system. This is in no-one's long-term interest. Latest figures from the IPA, relating to the dependency ratio for Tasmania—that is, those employed by government—soars over 50 per cent. The principle of fiscal equalisation should not mean all should be equally poor or equally bad. We should strive for that higher ledge. I back the call from the National Commission of Audit that states receive an equal per capita share of the GST revenue, but with additional payments to ensure that no state or territory is worse off. Under the current budget projections, in 2015-16 WA will receive 36c with Tasmania receiving $1.71 and the NT receiving $5.70. More competition, not less: that is the clear message from the Commonwealth Grants Commission's Report on GST revenue sharing relativities 2014 update.WA has shown that it is possible to go from mendicant to mighty; it just takes a leader: a David Brand or a Charles Court.

House adjourned at 20:00