Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to draw the attention of the Senate to the ongoing negative impact the current method of GST distribution is having on my home state of Western Australia. As senators will be aware, on 9 March Western Australia had a state election which resulted in a resounding win for Premier Colin Barnett's Liberal team. During the campaign, the Premier said that, if he were re-elected, he would loudly and clearly be raising the issue of GST carve-up with the federal government. I believe the election result is a vindication of Premier Barnett's stance on this issue and a clear sign from the people of Western Australia that something needs to be done to address this inherent imbalance in the current system.

Right on cue, less than a week after the state election, the Commonwealth Grants Commission issued its recommendations for GST distribution. Their recommendation is another slap in the face for all Western Australians. For the first time since the GST was introduced, a state will receive less than 50c in the dollar as its share. The Commonwealth Grants Commission recommendation for 2013-14 is that Western Australia be slashed to an unprecedented low of 45c in the dollar, down from an already low 55c in the previous year. That represents a $370 million loss on the previous year for Western Australia, money that this federal government expects Western Australia to find elsewhere.

Of course, Western Australians recognise that we are part of a successful federation and that our economic success means that there is some responsibility to support those states not doing as well. That is not an issue. But the overwhelming sense of people in Western Australia is that the pendulum has swung too far and that reform of the distribution model is urgently needed to ensure a fairer deal for WA taxpayers. Even the Prime Minister's Western Australian Labor colleagues admit as much. Last year WA Labor leader Mark McGowan came to Canberra to plead Western Australia's case for a fairer share of GST to the Prime Minister. Yet his pleas seem to have fallen on deaf ears. If that is how the Prime Minister treats her own colleagues, it is small wonder he banned the Prime Minister from setting foot in Western Australia during the recent state election campaign.

In contrast, I was pleased to note a report in the Australian Financial Review on 16 March which stated that the leader of my own party, the Hon. Tony Abbott, the member for Warringah, has been speaking with Premier Barnett about this particular issue. The Premier noted that, while Mr Barnett is open to discussion, the Prime Minister has simply ignored this significant issue for Western Australians. I think that speaks volumes about the Prime Minister's utter contempt for Western Australia. That contempt was on full display during the Prime Minister's recent camping trip in Western Sydney, where she offhandedly dismissed Perth's economy as 'not big'. Next week a significant event will take place in Western Australia: we will at last have a visit from our Prime Minister. By my reckoning, this will be the first time in 135 days that Ms Gillard has dared to set foot on Western Australian soil. Among other things, she will be holding a community cabinet in Perth on 27 March. I am sure all those attending will be pleased to hear the Prime Minister's justification for her remarks and to hear her explain why they should only receive 45c of every dollar of GST revenue the state contributes.

I think it is important to place on record a number of important facts about Western Australia and its 'not big' economy, to use the Prime Minister's words. In 2011-12, Western Australia accounted for 16 per cent of Australia's economic activity. We have 11 per cent of the nation's population residing in Western Australia.

Senator Carol Brown interjecting—

Tasmanian senators, I am sure you would love to live and represent Western Australia.

GDP per capita in Australia is $64,000. If you look at just Western Australia, our gross state product per capita is $93,000, 50 per cent above the national figure. In 2011-12, Australia's national GDP rose by 3.4 per cent. Western Australia's GSP rose in the same period by 6.7 per cent. That is the highest level of GSP growth recorded since the ABS started measuring it in 1989-90.

Western Australia s exports 46 per cent, almost half, of Australia's total exports. It is estimated by the by the end of this decade that figure will be closer to 60 per cent. Seventy-three per cent of all Australia's exports to China come from Western Australia. However, according to Prime Minister Gillard, this does not amount to much. Western Australia's economy is 'not big', to use her words. I do hope that when the Prime Minister finally touches down in Perth next week she takes the time to have a quick glance around her. That would make it immediately obvious that Western Australia's economy is rapidly growing.

With that growth, of course, comes serious challenges. Chief among these is infrastructure. With over 1,000 people moving to Western Australia every week, the state is having to make major investments in roads and public transport. These were significant issues in the state campaign that has just concluded.

Senator Carol Brown interjecting—

I can understand and have sympathy for the interjections of Tasmanian senators. You are welcome to visit Western Australia to see it for yourself.

Of course, all these new residents have the same need for services, meaning significant investment is having to be made in health and education, in particular. Yet at the very time when the Western Australia state government is having to invest more heavily than ever in these, we are continually having our GST revenue slashed. Surely senators from other states can see the basic unfairness of what is now occurring. Just remember, 10 years ago Western Australia received 98c in the dollar from its GST payments. Today that figure is 55c in the dollar, moving to 45c next financial year. If the system is not significantly reformed, in two years' time, on current forecasts, that number will be around 25c in the dollar.

It should be obvious to all those in this place that such an arrangement is simply not sustainable. As I said earlier, no-one in Western Australia has an objection to making some contribution to those states, including Tasmania, not performing as strongly, but there needs to be some semblance of balance restored to these arrangements.

Premier Barnett has proposed moving to a model based more on population. Given that Western Australia has around 11 per cent of Australia's population this would help restore a significant proportion of the estimated $2 billion we are currently missing out on.

During my first speech to the Senate in June last year I urged my party to rise to the challenge of undertaking reform in this area. I am pleased that our leader has been holding discussions with Premier Barnett on this issue, and I trust that that will continue. I am confident there can be a win-win on this critical issue to WA's future prosperity. In the GST reform debate, what is good for Western Australia is actually good for all of Australia.

I also hope that the Prime Minister uses her visit to Western Australia next week to revisit her own inaction on this significant issue. The people of Western Australia are punching far above their weight in terms of their contribution to our nation's economy. All they are asking in return is for a fair hearing and a correction of the imbalance in the current approach to GST distribution. I am sure that, even in Tasmania, people will not think that this is too much to ask.