Senate debates

Wednesday, 22 March 2023

Statements by Senators

Goods and Services Tax, Trade

12:25 pm

Photo of Slade BrockmanSlade Brockman (WA, Liberal Party) Share this | | Hansard source

enator BROCKMAN () (): I rise to speak about a couple of issues that are vitally important to my home state of Western Australia. I'll start with the GST sharing arrangement. The GST sharing arrangements are not top of mind for people across Australia. In fact, if you talk about GST relativities, most people's eyes probably start glazing over. But that's certainly not true in my home state of Western Australia, and it's certainly not true amongst the Western Australian Liberal team.

For those who are interested, I think this is really important point to make: what does a GST relativity mean? We hear these numbers bandied around: 70c, 15c and $1.01. A relativity above one means that a state is effectively subsidised because it receives more than its population share of the GST. It's a pretty straightforward concept: it receives more than its population share of GST if that number is above one. In the past, Western Australia was in danger of falling to a catastrophically low level, a number of 10c in the dollar and a relativity of 0.1 or even lower. The WA Liberal team fought very hard indeed to ensure that that system was repaired, that the failures within that system to take into account the unique attributes of Western Australia were repaired and that there was a change in the ridiculous circumstance where, literally, one-tenth of the GST revenue delivered from Western Australia to all the other states was returning to WA.

In government, we fixed that problem. The whole WA team, led by then finance minister, Senator Mathias Cormann, fought hard and convinced the government that that needed to be changed, and it was changed. That was a team effort, and I was very proud to be a very small part of that team, having newly arrived in this place. But we delivered for the people of Western Australia. We delivered the 70c—going to 75c—floor in the GST sharing arrangements. We are watching this government. Senator Matt O'Sullivan, who's in the chamber with me now; my colleague Senator Dean Smith, who's doing some great work on this issue; Senator Michaelia Cash; and Senator Linda Reynolds—we are all watching the government and are 100 per cent committed to ensuring that the fair GST carve-up that we put in place stays in place.

Why are we watching so closely? Because we can see pressure building in the Labor Party. The New South Wales Labor leader, Chris Minns, went to WA recently and met with Mark McGowan. They did a nice friendly visit in WA but didn't really get into the GST; that would have been a bit too touchy. But, once he got back to New South Wales, what did he say about the GST? 'We're entitled to more.' That's an implicit criticism of the current arrangement. 'It's all up for negotiation in the next few years, and I'm not going to take a backward step'—that's what the putative Premier of New South Wales said just after he had his friendly visit with Premier McGowan in Western Australia.

Let's look at Western Australia and New South Wales in the current circumstances. Under an assessed relativity—remember what we're looking at when we're looking at relativity; if a number is above one, a state is being subsidised in terms of its GST share—New South Wales would actually be at $1.01. New South Wales would actually be getting more GST than its share by population. What would Western Australia be getting under straight assessed relativity at the moment? It would get 15c in the dollar—0.15. Thanks to the deal secured by the Liberal WA team in this place, that is being boosted to the floor of 70c, ensuring that 70c in the dollar of GST population share is returned to Western Australia—70c! Mr Minns, the putative Premier of New South Wales, described that as unfair, that 'we are entitled to more' because WA gets back 70c in the dollar. So every Liberal member of this place and in the other place is watching this government very closely in terms of its actions in relation to GST.

I also wish to discuss trade. Australia is a trading nation and Western Australia is a trading state. If we draw lines on a map, the start and finish of those lines are invariably in Australia. Be they plane routes, sea routes, telecommunication flows or monetary flows around the world, Australia is at the start and the end. We're a trading nation, and Western Australia is a trading state. Be it our major commodities, like iron ore, gas or agricultural commodities, Western Australia's lifeblood is our ability to trade with foreign nations and foreign purchasers, but we're seeing those relationships and the great reputation Australia has as a reliable training partner being undermined by this Labor government—and we've seen it across a few different areas.

I think we'd all agree in this place that Japan is an extremely important and extremely reliable trading and strategic partner. It's probably up there with the US and the UK as one of our top four relationships in the world. But this Labor government's tinkering intervention in the gas market has seen the Japanese government and its representatives respond in a way that's very unusual. They're very, very reluctant to criticise and very reluctant to talk about relationships. They're always keen to keep a positive relationship. And yet we've had Japanese trade representatives going to trade magazines with comments like, 'We're concerned that the government's short-term market intervention could possibly threaten LNG business practice, which has been established over many years, and investment in the future.' This could put current markets at risk and stifle investment. This is what we said—many people on this side, including me, said—that there was a major risk from the Labor government's intervention in the energy market, particularly in the gas market. We said this would happen, and now we can see a clear demonstration from Japanese government representatives that this is affecting our trade relationship with Japan.

The other clear example which affects my home state of Western Australia—not that the gas industry doesn't affect my home state, because at times we are the largest exporter of LNG in the world—is, obviously, the live export trade. The live export trade, particularly to the Middle East, has been a significant part of the WA agricultural industry for decades. It's very important to those markets, and those markets are saying clearly that this has the potential to impact beyond just the trade in live sheep itself. It could impact on other aspects of our agricultural supply relationships with those countries and impact on other aspects of our broader trade relationships with those countries.

Those countries considered us to be a reliable supplier of protein to their domestic market. Not only are we putting that market at risk and the sheep farmers of Western Australia under extraordinary economic pressure but we are damaging Australia and our trade relationships. The rest of the world is looking at us and saying: 'Is Australia the same trading partner it used to be? Is Australia the reliable, dependable trading partner for gas and agricultural products that it used to be?' I personally find that extraordinarily dangerous for the future of Australia in this world because we are a trading nation and Western Australia is a trading state.