Kim Wilkie (Swan, Australian Labor Party) Share this | Hansard source

I rise to speak on this matter and to give an accurate view of the Western Australian fiscal position, as opposed to the fairytales put forward by the members opposite. In my view, the members for Stirling and Hasluck have misrepresented the situation. So let us get down to a few facts.

In dollar terms, Western Australia provides the highest subsidy to other states of any state or territory. The subsidy provided by Western Australia has grown strongly since the mid-1980s. This reflects the strong growth in Western Australia’s economy, which has boosted the Commonwealth tax collections from the state. Our subsidy amount to the other states is around $2,000 for every man, woman and child. But, as a result of the strong performance of our economy, our share of Commonwealth grants is likely to fall by about $700 million from where it would otherwise be by the time we get to 2009-10. We get extra revenue as a result of our economic performance, but then the Grants Commission says, ‘You’ve got more revenue raising capacity so we’re going to reduce your share of Commonwealth grants.’

Meanwhile, the Commonwealth raises much more revenue than it could possibly ever require for its own responsibilities. Not only does the Commonwealth raise much more money than it needs, but also it raises much more money from Western Australia than it spends in our great state. The Commonwealth collects $28 billion from Western Australia, but it only spends $24 billion in WA; that is $4 billion taken away and spent in other states. To their credit, New South Wales and Victoria also subsidise the rest of the country, but ours—$2,000 per Western Australian per year—is the largest per capita subsidy. My view is that a portion of that $4 billion should be spent by the Commonwealth directly on infrastructure—for example, upgrading the Great Eastern Highway between Orrong Road and Perth airport, which many of us know so well.

The recent federal tax cuts were really based on the sterling performance of the WA resources sector. Mr Deputy Speaker Haase, I am sure you would be aware of that. The Commonwealth has reaped enormous revenue from company and income taxes generated by the resources boom. Our subsidy to the rest of the nation is growing. Twenty years ago, there was a slight subsidy to Western Australia. In the 20 years since 1986, the subsidy Western Australia provides has grown to $4 billion per annum and, given the performance of our economy, we can expect that subsidy to quickly grow to $5 billion and beyond.

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