Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

The member for Makin has actually raised a very important issue: the review by the Productivity Commission of the GST carve-up. Unfortunately, after his initial comments in the motion, he digresses and falls into the trap of the South Australian government. In fact, he follows their lead and links South Australia's long-term underperformance on almost every level to the federal government. It is not a thesis or hypothesis that stacks up. The federal government runs a federal system, and all states are basically treated the same. Yet all the ailments of South Australia and its underperformance seem to be, at least in the Premier's view and in the view of the members opposite, the fault of this federal government.

It's been 16 long years of Labor in South Australia. They have misjudged the economics of the day and badly misdirected infrastructure investments, including very expensive opening bridges down at Port Adelaide, the O-Bahn extension and a desalination plant that hasn't been seriously utilised since it was built in 2011. While it has spent the taxpayers' hard-earned dollars on these projects, the state government has ignored the infrastructure that would boost the economy, particularly in the regions. I make the point that South Australia does not have a serious deep-sea port, and it's been holding us back for many years. The government should have invested in this area. The state government's status quo is to blame the Canberra coalition for all its failure and, unfortunately, the member for Makin has joined them.

Let me say from the outset that I'm totally committed to the principles of horizontal fiscal equalisation. This country has been built on the premise of equality and equity. It's not possible to support a system where children, our aged or our disabled are treated with less generosity from state to state. That's why I think it is completely correct that the Productivity Commission should review the mechanisms that address horizontal fiscal equalisation. It is the vehicle that delivers social equity across Australia, but currently the GST is meeting the entire scope of that fiscal equalisation, and this is leading to distortions. The member for Barker touched on them when he spoke about the Penola bypass.

I, too, after some lobbying efforts, was allocated some amounts of money for South Australia in 2016 to help the state government upgrade some of their infrastructure. In particular, I got $400,000 for an upgrade of the Kulpara to Kadina road, which is an increasingly busy and rough-as-guts bitumen road carrying 2,000 to 3,000 vehicles a day on Upper Yorke Peninsula. It's interesting that the state government are actually paying for works on parts of that road at the moment, but they could have had an extra $400,000 from the federal government. All that was required was a 20 per cent contribution from them, which they rejected because they said it would affect their GST payments. Similarly, I received an $800,000 contribution towards the Tod Highway on Eyre Peninsula. These are very important transport routes. Once again, the state government would have had to come up with 20 per cent, or a little less than $200,000, and they refused the money because it would downgrade their GST allocation.

I make the point here that something is wrong. When state governments are rejecting money from other sources because it will affect their GST allocation, clearly the incentives in the system are wrong. I applaud the review by the Productive Commission, and, like others, I look forward to their final report. But I hope they address this issue.

In my mind, we will have to look at a system that is somewhat different and that shares the load further outside the GST boundaries. We cannot have member states making decisions because they're worried about losing money from other states. I have some sympathy for the view that the Western Australians put up—that there ought to be a minimum rate that states pay. The suggestion has been 70 per cent; so, if your state contributes a dollar through GST, you are guaranteed at least a 70 per cent return. It's going to take a little time before we get to that position, I believe. I am willing to support that premise but only if it does not disadvantage my state and my issue is addressed in other ways.

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