Judi Moylan (Pearce, Liberal Party) Share this | Hansard source

I have listened quite closely to the comments of the parliamentary secretary, the member for Maribyrnong, and I have to say I concur with the concerns that he has expressed about the importance of safe workplaces, especially in such dangerous and remote environments as exist in the oil and gas industry. Like the parliamentary secretary, I believe that there should be no compromise when it comes to the safety of individuals working in this environment, but neither the parliamentary secretary nor the minister in his second reading speech has made a case that would give rise to concern about a high accident rate off the coast of Western Australia. Indeed, the parliamentary secretary quoted major accidents abroad in Texas and in the North Sea. But that case has not been made and I would be very happy to find out more about the accident rate in Western Australia because of its offshore activities.

I digress somewhat. I think there are some more covert agendas going on here. Once, the ever-emotive constitutional lawyer, Greg Craven, observed:

Across the world, constitutions go down like South American currencies, producing mayhem and revolution …

Why am I talking about constitutions in a bill dealing with offshore petroleum regulations? Simple. These seemingly benign issues go to the core of Australia’s Federation.

Over the past few weeks we have observed what is becoming a trademark of the current government—the, ‘I’ll take that, thank you’ approach to federal-state relations. Mining royalties, health care and the school curriculum are all being pondered—or should I say ‘plundered’—for a federal takeover. Now this bill, the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2010 and the accompanying Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Miscellaneous Measures) Bill 2010, which is the one that I am perhaps speaking more to today, join the list.

What does the federal government want? From Western Australia alone it wants $15.3 million in 2010-11; $60 million over a four-year period. What will WA and the rest of the states get in return? Nothing. That is the situation, at least in the short term. That is because this money is going to be used for the federal government to fund a national offshore petroleum regulator, a regulator that has not yet been created, with no firm indication of when it will be created. The government says it will wait until mid-2012 to create the regulator—yet another layer of bureaucracy. Western Australia already has its own regulator. The West Australian government is understandably frustrated. As I indicated before, there are no firm plans to establish the regulator, but the federal government will take the money. In fact, it will be taken from July this year. The WA government submitted to the federal government a letter explaining that the loss of revenue will come at a time when Western Australia will be required to commit funding to infrastructure development for the Gorgon development, and Gorgon will be worth $64 billion over 30 years to this country and will employ 10,000 people at peak. Such a blatant tax grab by the federal government may impede important infrastructure projects in Western Australia. Quality infrastructure rationalises resource projects for the stakeholders, which in turn ensures maximum flow-on returns to both the people of WA and indeed all of the people of this great nation.

We should not forget the difficulty of providing infrastructure in a state as large as Western Australia. It is the world’s second largest subnational administrative division, covering a massive 2.6 million square kilometres. That is roughly the same size as Kazakhstan or five times the size of France, to get it into perspective. The West Australian government is undertaking massive infrastructure projects. Apart from Gorgon, another project is the Oakajee port and rail development. Oakajee is designed to open up WA’s midwest, supporting resource development in the area and ensuring long-term economic prosperity for Western Australia and the nation. The project will cost in excess of $4 billion. Twenty-five kilometres north of Geraldton—that is, 445 kilometres north of Perth—there will be a deepwater multiuse port eventually capable of servicing a number of vessels, including iron ore bulk carriers and dedicated berths for export and import of bulk materials and containers. Five hundred and fifty kilometres of heavy haulage railway will be built to fit into existing railways, and 2,300 hectares will be set aside for an industrial estate and processing facilities. Think then of the further infrastructure needs of the West Australian public, including roads to service these areas, airports, sewerage, electricity and accommodation for workers. With such massive commitments the West Australian government is understandably troubled by the Commonwealth holding money that would otherwise be distributed to the West Australian public, including to industry. But what will the federal government do with the money? Where is it going?

Clause 2 in the schedule of the miscellaneous measures bill simply repeals subparagraph 76 of the Offshore Petroleum and Greenhouse Gas Storage Act, removing registration fees from the list of fees that the federal government normally would collect and then pay out to the states the following month. So the federal government will collect the money but not give it back. No mention is made, however, that the money will go to infrastructure projects. Approximately two-thirds of Australia’s offshore oil and gas resources and 80 per cent of offshore titles are based off the coast of Western Australia. Yet no guarantee is given that any money will flow back to Western Australia. On the contrary, we have just seen the Prime Minister announce—and I will talk about that a little later should time permit—the carve-up of the GST, and Western Australia has been the loser in that carve-up.

The Australian Petroleum Production and Exploration Association have argued that the industry should not pay any registration fees as it is essentially stamp duty which should have been abolished with the introduction of the GST. While I understand their advocacy for their industry, the massive infrastructure investment required in Western Australia overshadows and outweighs the fees collected. Of course it could be argued that private industry may invest that money back into resource projects, but we have seen the problems of privately controlled infrastructure already in the north of Western Australia. What will the federal government do with this money? We do not know. The federal government does not seem to worry. It cherrypicks state revenue and responsibilities, removing local decision making to the faraway corridors of Canberra. Pru Goward, the New South Wales shadow minister for community services, wrote in the Australian this month:

The home-insulation tragedy demonstrates once more the dangers of federal governments believing their own rhetoric and thinking that they can run the country.

She continues, noting:

… the further government are from services, the worse they are at delivering. There is nothing like immediate and local accountability to keep public administration on its toes.

I say hear, hear to that. Pru is worried about how the federal government, just two hours drive down the road from her, can manage to do what is best. Madam Deputy Speaker, I am sure you can imagine how people in Perth, five days drive away, feel.

Some people wonder what all the fuss is about. But each time the federal government takes responsibilities away, it is chipping away at the foundations of Australia’s federal system of governance. As an example, Greg Craven points to ‘the usefully rich West Australians’, arguing:

With their small population, they would have little say over their own circumstances in a unitary Australia.

Western Australians already feel this is true. For instance, the recent changes to the GST returns I just alluded to mean that for every dollar paid in GST in WA, only 68c will be returned. But New South Wales will get a return of 95c, and Victoria will get 93c. People in WA feel that the state is being plundered.

Premier Colin Barnett—responding to the recent federal carve-up of the GST, where there were large increases to the revenue of other states, whilst the revenue for WA contracted—put it bluntly when he said:

This country depends on WA for the future growth of the whole nation ... It’s not good for this state but it’s not good for Australia. This is slowing down the growth part of our economy.

We all know that resources are, and will continue to be, the fuel for Australia’s economic growth. We also know that they are finite. Ensuring the economic potential is maximised will require much cooperation between the federal government and the states. I stress that cooperation, not compulsion, is the key. If there is disagreement, the Prime Minister needs to communicate more effectively with the state governments, as he promised to do before the 2007 election, and we see little commitment to that.

This legislation is a case in point. It is true that the federal government consulted the Western Australian government on this legislation. However, WA was given just one week to comment on the loss of $60 million over a four-year period. Where is the fairness in that? Where is the cooperative spirit so often spoken about by the Prime Minister?

Bill Tinapple, the Executive Director of the Petroleum and Environment Division of the Western Australian Department of Mines and Petroleum, even made that point in his letter to the government. Writing on the proposed tax grab, he stressed:

I do not believe that to unilaterally impose this amendment is in the spirit of cooperative federalism publicly embraced by the Federal Government.

Federalism is not perfect—I acknowledge that; it is like democracy in that sense—but it has served us well. Lord Acton, the 19th century British historian and politician reasoned:

The true natural check on absolute democracy is the federal system, which limits the central government by the powers reserved, and the state governments by the powers they have ceded.

Balance is the key. Increasingly, however, the balance of power is going to the federal government.

Michelle Grattan, in her piece ‘Federalism turns on financial carrots and Canberra’s big stick’ quotes AJ Brown, a professor of public law at Griffith University who runs a federalism project. Professor Brown remarks that ‘the debate we are not having is what should be devolved, how we are going to get more diversity.’ Professor Brown is correct. Where is the debate about diversity? Have we forgotten that our Federation was established to reflect the vast diversity of this enormous country? Why is it always thought that being the same is good? Where is the recognition that the states and their administrations are competent?

The wonderful thing about our democratic system of governance is that if the people do not like the way their specific jurisdiction is governed they will sack the incumbents. The state governments go to the polls every four years and the public, the voters, get to have the ultimate say. If the state governments are not administering the affairs of the states fairly and in a proper manner, they lose government. That is the ultimate sanction that the public has a right to impose. If the people are unhappy with the way their state is administered, they can express it at the polls. The question ‘Can Canberra do it better?’ does not always need to be asked, but increasingly it is.

There is nothing that we have done in this place in terms of administering programs out in the communities that demonstrates that we are any better at it. In fact, I hasten to say that the insulation program can demonstrate that we were much worse than we should have been, and that is costing this nation millions of dollars now to rectify. There is a perception that the federal government is the ‘better’ government. With more money, resources and national reach at its disposal, it can appear that the federal government is better equipped to handle significant issues facing Australians. The reality was proven, as I said, by the insulation scandal. The federal government cannot always manage programs effectively, and the cost to the nation can be very high.

The tragedy of the insulation program shows us that centralising more power in Canberra should not be the default position. If there are problems with federal-state cooperation, work at it—do not just ditch it; do not just seize power; do not just deny states the revenue for them to be able to govern effectively. We are seeing this in the health debate. It is like shifting the chairs on the deck of the Titanic while it is sinking. This is about inadequate revenue to the states to run the health system effectively. I do not believe that the federal government are going to be able to make any difference by just grabbing the money back off the states and then reallocating it to suit their priorities. That is not necessarily going to deliver better health care to Australians. But I digress. I just think that we should give the state governments more than one week to comment on proposals that have such an impact on them. It is not a good situation. There is continual talk of cooperative federalism, but I am afraid the rhetoric does not match the actions of the government in this respect.

The Western Australian government has raised concerns with this legislation and with the national offshore petroleum regulator that this fee grab is supposed to fund. These concerns are not insurmountable. More consultation is required. The views of the Western Australian government should be heard and should be taken notice of. Listen to the states. Respect the framework of the Constitution. Realise that the solutions do not always lie in Canberra. There is a reason that we do not have the mayhem and revolution described by Greg Craven, which I quoted at the beginning of this speech: our Constitution is well drafted and provides the balance that Lord Acton describes. That balance should not be so whimsically and carelessly upset.

There have been mining royalties, health care and the school curriculum, and now there is this blatant tax grab. What are the states getting in return? From this legislation, Western Australia are not getting anything for their money—certainly not at the moment. The federal government, in the minister’s second reading speech, indicated that there will be a delay in the appointment and establishment of a regulator. So why start plundering the funds that are currently going to the state government of Western Australia in July this year when there is no intention of doing anything about a regulator until some time in 2012? I think the public have a right to be cynical about these kinds of moves by this government. I urge the federal government to properly consult with the Western Australian government, to listen to their concerns and to find a solution that is agreeable to all.

I know that under the leadership of Colin Barnett, the Premier of Western Australia, a lot of progress was made early on in this. I know that there has been cooperation between the state of Western Australia and the Australian government on establishing the Oakajee port and a number of other infrastructure projects. But I think we have seen in the last year a major breakdown in proper communications with the states and this blatant grab for power and whatever money can be extracted. One has to question how this money might be distributed in the future, certainly given that Western Australia is the loser in the recent re-carve-up of the goods and services tax.

See this speech in context