Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

The Commonwealth Grants Commission revenue-sharing formula is often a matter of continuing stoushes between various states about the way that different Commonwealth revenue is divided up between the states and territories. Not surprisingly, each state and territory tends to think they should be getting more and some of the others should be getting less. Certainly, in recent times there has been a fairly continual propaganda campaign from governments, in New South Wales in particular and to a lesser extent in Victoria, targeting in particular Queensland and to a lesser extent Western Australia saying that Queensland basically is getting too much, we are getting more than our fair share, and that is at the expense of states like New South Wales.

I do not want to turn the Commonwealth Grants Commission revenue-sharing relativities issue into a state of origin contest but I do think it should at least be based on something more solid than jingoistic parochialism. To that extent I think this report is valuable. It is often talked about as though there is some simple formula, X divided by Y times Z, which gives so much money per state. That is not particularly accurate because the principle that the commission bases its calculations on is horizontal fiscal equalisation, and there are actually a range of mathematical formulae that the commission uses, simply as the means by which the commission seeks to implement that principle. To define or clarify what that principle of horizontal fiscal equalisation is: it is that state governments should receive funding from the pool of goods and services tax revenue and healthcare grants such that, if each made the same effort to raise revenue from its own sources and operated at the same level of efficiency, each would have the capacity to provide services at the same standard. That is the principle and there are a range of formulae that go to ensuring as much as possible that that principle is implemented.

States have different capacities to raise revenue and different spending needs and obviously people also have different ideas about what is a need and what is a bit of vote-buying profligacy. For example, of course, Western Australia has a relatively large capacity to raise revenue from the mining industry compared with Tasmania. A state with a young population needs to spend more on primary education; states with older populations may need to spend more on health services. So, to provide states with equal capacity to provide services, states with below average revenue-raising capacity or above average spending needs receive a larger share. The commission needs to take account of factors that a state cannot control. When you start to look at the complexities of it and the attempts of the commission to make its assessment of revenue-raising capacity and spending needs so-called policy neutral, it is a fairly difficult task. The commission also has to take into account revenue-raising efforts which compare each state’s actual revenue with its assessed capacity. The issue here is really to try to make sure that, when we are talking about the Commonwealth Grants Commission formulae and the various relativities, it is not some nice simple measurement of total number of population equals X number of dollars per head and we all should get that mix.

The Northern Territory of course gets a significant amount extra per head because of a variety of factors, not least distance. Frankly, I think each state including my own state of Queensland could make a very strong case for all those different issues and criteria that come to implementing the formula that could be just as credible. If you look at, frankly, the pretty lamentable record of the New South Wales government when it comes to basic infrastructure and even getting that to work properly then I do not think really they can suggest that somehow or other they are making full value of the dollars they get. In saying that, I do not suggest the Queensland state government have a perfect record by any means but I do think that, when we have these debates, we need to recognise the need for them to be based on facts, substance and information rather than just blithe jingoistic parochialism. Wasting money, as state governments have done, buying big newspaper advertisements trying to promote their case is hardly the way to go. It is not going to influence the commission and it is not going to influence an informed debate. Certainly, from my point of view, I think Queensland very much has a case for saying that it is not getting any less than it should be. (Time expired)

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Unlike Senator Bartlett, who has given a very statesmanlike and learned address on the report on state revenue-sharing relativities, I intend to be a bit parochial. I have to say that the relativities, whilst they do not unfairly favour Queensland, do result in Queensland getting a substantially beneficial share of the Commonwealth revenue. Of course, Queensland gets it under the formula as it is, and I think that the formula is still appropriate. I have been very conscious, particularly in the time I was Minister for Regional Services, Territories and Local Government, that some of the states, particularly the old rust bucket states of New South Wales, Victoria and South Australia, always complain about how much Queensland and Western Australia receive from these grants. But Queensland is a very decentralised state and it does have difficulties with infrastructure that perhaps other states such as New South Wales, Victoria and South Australia do not have.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

And Tasmania?

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I dare not say Tasmania with a Tasmanian in the chair and two other Tasmanians sitting around me! Although, perhaps I will take Senator Marshall’s interjection and include Tasmania in that. Whilst Queensland has not done better than it should, it has done pretty well out of the relativities.

One of the things that I am continually distressed about is that, with the huge amounts of money coming in from the Commonwealth through the financial assistance grants and the GST—which is based on the same sort of formula—Queensland still has enormously high taxes, particularly in the area of stamp duty and payroll tax. Senators will recall that, when we introduced the GST, there were all sorts of commitments, although never real commitments, from all of the Labor state premiers that, once they got their hands on every single cent of the GST—which, as we know, they have—they would address the state taxes that have really inhibited business growth and employment creation. Foremost amongst those was payroll tax. Some of the states have made some attempts to reduce taxes, but Queensland is one of the worst when it comes to the taxes that it continues to collect in spite of the fact that it is getting enormous revenues from the GST and the financial assistance grants delivered by the Commonwealth Grants Commission.

The Queensland government has criminally wasted money that has come to it and it has continued to accept more and more revenue from its own sources as a result of the property boom over the last few years. What has it done with its money? It certainly has not spent it on infrastructure. Most of the roads infrastructure in Queensland, be it at the local government level, national highway level or roads of national significance level, comes from the Commonwealth government. The contribution of the Queensland government is very small by comparison.

The Queensland government certainly has not been putting the money into health infrastructure. The health system in Queensland, once the envy of every state of Australia, is now a basket case. It is an absolute tragedy. Money has not been put into it where it counts. Certainly, there are an enormous number of spin doctors employed in the health system, as well as everywhere else in the government. There are a hell of a lot of pen pushers—people who fill in reports and do surveys and questionnaires. But the contribution to the medical staff, the doctors and nurses who actually do the work of looking after the health of Queenslanders, has been almost pitiful. Then there was the scandal of the Dr Death saga, when Dr Death was going to come back into Queensland to face the music. But he would have arrived in the middle of the election campaign, so what did Mr Beattie say? That he did not want him back. This is the sort of rubbish you have in Queensland. (Time expired)

Question agreed to.