Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

It is with some disappointment that I rise to note the Commonwealth Grants Commission's Report on GST revenue sharing relativities: 2012 update. I go to section 2, the recommendations, and it is incredibly distressing to notice that, in the first place, my home state of Western Australia is on a relativity of only 0.71, that being 71c in the dollar, this current financial year. That is against others such as New South Wales, on 96c; Victoria, 90c; Queensland, 93c; South Australia, $1.27 per dollar; Tasmania, $1.60 per dollar; the ACT, $1.11; and the Northern Territory, no less than $5.35. That in itself is distressing enough, but, when you look towards the recommendations for 2012-13, Western Australia's share of 71c in the dollar decreases to 55c in the dollar, and further into the out years—and the understanding by our Treasurer is that that figure will decline even further.

What does that translate to in dollars? I am pleased that my colleague Senator Sterle from Western Australia is here to hear these figures. He may need to get his handkerchief out for his tears. What it means for Western Australia is a decline of some $820 million, and the beneficiaries—for whatever reason I do not know—are the ACT, who get an extra $50 million next year; and the Northern Territory, an extra $82.6 million, although as I mentioned they are already on $5.35 per dollar that they actually earn; and the other states in the main—New South Wales lose a bit. Queensland do gain, and one can understand that with the floods of last year, although they did fail to take out insurance, as all the other mainland states did.

I say this is distressing for one reason—that is, in calculating the formula for horiz­ontal fiscal equalisation, the commission looks at the income-earning capacities and activities of each of the states. It is true that in my home state of Western Australia 20 per cent of its revenue comes from mining, and that is taken into account in the distribution. But what is, I think, absolutely annoying is the fact that, in many of the other states of Australia, 10 per cent of their revenues come from gambling, yet gambling is excluded in the formula calculating the GST carve-up amongst the states and territories. There is no logic to 10 per cent being overlooked when, in the case of mining, 20 per cent is not.

The other point that I have made—and, Madam Acting Deputy President Moore, I think you may have been on the committee under the chairmanship of then Senator Trood—is that one of the other problems with the formula calculating GST is that there is nothing in the formula that actually looks at the capacity, willingness or ability of each individual state or territory to either maximise its revenue or contain its expenditures. I think that is totally illogical.

Premier Barnett, from Western Australia, refers to Tasmania—somewhat disparag­ingly, perhaps—as 'Australia's national park', but he is right in many ways. Having lived and worked in that state, having invested heavily in that state, I know that it is a state with enormous capacity to earn revenue. And yet at every turn, mainly through the agency of the Greens political party, those revenue-earning streams are continually being cut. It is fine if there is no imposition on the people of that state. We can all understand horizontal fiscal integration. We can all understand that wherever you go around Australia you want equivalence—not equal­ity but equivalence—in roads, transport, health, education and safety. But there has to be an obligation on each state and territory to actually optimise and maximise its revenue and to try and minimise its expenditures.

Of course, as I have said before and as I said in my first speech in this place, it is an old veterinary fact that, if you fail to feed the cash cow, one of the first things that will dry up is the milk at the other end of the cow. If we do not invest in infrastructure towards improved productivity, then we are not going to be able to maximise and optimise the very necessary revenues that are required for each of the states and territories. I seek leave to continue my remarks later.

Leave granted.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to rise and enter the debate on the Commonwealth Grants Commission Report on GST revenue sharing relativities: 2012 update, especially following Senator Back, who raises the very important issue of horizontal fiscal equalisa­tion. It is not horizontal fiscal anything else; it is equalisation. I think he said 'integration'. We certainly do have what has been over a number of years an economy that we are trying to integrate to make the economy work effectively for everyone. Horizontal fiscal equalisation is about making sure that the GST grants are shared equally and effectively and fairly across the country.

I can understand why ordinary people in Western Australia look around and say, 'We've got a significant problem in Western Australia because of the stresses and strains that the mining industry and the boom in Western Australia have put on the Western Australian economy.' Fellow senators like Senator Sterle have raised these issues consistently and eloquently on the floor of this chamber. What Senator Sterle and others from Western Australia understand is that royalties are the second-best way to deal with the mining boom.

Even the Minerals Council of Australia, with the major miners and the smaller miners involved in it, have said clearly that a minerals resource rent tax is the way to go. They have said that it is the way to go and that it is the most effective way of dealing fairly and equitably with the miners. But, again, it comes back to this fundamental problem for the coalition: they are addicted to the income from Clive Palmer, Gina Rinehart and 'Twiggy' Forrest for their electoral war chest. As long as the coalition are addicted and reliant on the war chest of Gina Rinehart, 'Twiggy' Forrest and Clive Palmer, they will act in the interests of these multibillionaire miners and not in the interests of this nation. We see them stand up and defend the multibillionaire miners day in and day out on the floor of this Senate and in the other place.

The coalition say that these miners should not be forced to pay one extra cent for the good of the nation. Why are they doing that? There is only one logical reason, and that is that the coalition are addicted to the electoral funds that are flowing into them from these multibillionaires. They do not care about the national interest. They do not care about what that $10.8 billion over three years can do for this nation. They do not care about small business and reducing the tax for small business. They do not care about making sure that ordinary workers out there get an extra $100,000 when they retire because of the increase in the superannuation levy that this tax will fund. They do not care about the extra infrastructure it will fund. The mining companies have not cared about infrastructure in this country for decades.

All the coalition want to do is be the puppies of Clive Palmer. They want to do the bidding of the mining industry magnates and put the national interest behind their own electoral interests. This is an absolute disgrace. Not only are they illiterate when it comes to what is in the best interests of the country; they are economic incompetents when it comes to knowing what is the best way to deal with the mining boom. They are absolute economic incompetents. Every economist of any standing who has looked at this issue, including even the economists who advise the mining industry itself, the Minerals Council, says that the MRRT, a tax on profits, is better than a tax on royalties. A tax on royalties is an inefficient, unfair way of trying to get a share out of the mining industry. Yet the economic incompetents on the other side follow in the footsteps of that economic incompetent, Peter Costello, and do not understand these issues.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I seek leave to continue my remarks later.

Leave granted; debate adjourned.