Rick Wilson (O'Connor, Liberal Party) Share this | Hansard source

It's great to follow the member for Rankin. I was going to ask him later on if I could borrow his copy of Kevin Rudd's new book when he's finished with it; I'm sure it will be very interesting reading!

The member for Rankin spent a lot of time during the debate claiming credit for the GST fix, which I'm very much aware started late in 2016, when we, the Western Australian members, met with the Prime Minister and the Treasurer in the then Prime Minister's office, and we spoke about a way forward and the process to get some political agreement. That set off the Productivity Commission inquiry process, which, ultimately, led to the outstanding result today. The member for Rankin claimed that this was all the Labor Party's work. But the member for Burt—and I'm a very good friend of the member for Burt, and we worked together just last week, putting on a wonderful Showcase WA event—back in February of this year, speaking to The West Australian on The Whip podcast, said that fixing the GST system was 'almost politically impossible'. Obviously, the member for Burt wasn't on the same page as the member for Rankin as to how easy it was going to be to fix the GST.

But Australia is a federation of states. I am a proud Western Australian. We accept our responsibility to make our contribution to the federation, and most Western Australians would recognise that, for many, many years, Western Australia was a net beneficiary of the horizontal fiscal equalisation scheme, and we were quite prepared to make our contribution when the time came.

However, there was a unique set of circumstances, starting post global financial crisis, where we saw iron ore prices double, from around US$60 a tonne to around US$120 a tonne; a massive construction boom in Western Australia, with the opening of many new mines; and the north-west shelf gas project, which saw Western Australia's revenue rise almost exponentially. That was good for Western Australia. It was great that the Western Australian government at the time, the Barnett government, had resources and money to spend. However, it also came with costs.

We had a huge influx of people into Western Australia. We had to build new schools; we had to replace hospitals and build new hospitals. I think the Fiona Stanley Hospital was around several billion dollars. We also needed community amenities as well, like the new Optus Stadium, which was over a billion dollars and was criticised by many people at the time. But, like the Sydney Opera House, I think in 40, 50 or 60 years, people will come to appreciate what a magnificent community asset that is. Elizabeth Quay and many large road projects were all funded through that period. Then, of course, we saw the end to the mining and construction boom. We saw iron ore prices come back to their long-term average of around US$60 a tonne. The Western Australian government's revenue collapsed, and that led to some serious problems for our state and the then Barnett government. Those problems were inherited by the new Western Australian government, led by Mark McGowan.

So obviously Western Australians were very aware of the fact that our GST share, through the horizontal fiscal equalisation system, had fallen progressively and in 2015-16 reached 30c in the dollar. Prior to that, as the member for McMahon pointed out in his contribution, the previous low had been around 86c in the dollar. Western Australians obviously felt that we weren't getting a fair go out of the GST deal. We accepted that we needed to make a contribution, but 30c in the dollar put our state budget into serious deficit of I think up to $4 billion at its worst, and the brunt of that was being borne by everyday people in Western Australia. So there was a great deal of anger across the Western Australian community. The government has responded, and in some respects I agree with the member for Burt: this was a politically diabolical problem to fix. How do you make sure that WA gets its fair share of the GST distribution without disadvantaging the other states? Obviously, no state is going to stand by and watch the system change and reform if it's going to mean that their people and their governments have less money to distribute. The then Treasurer, Mr Morrison, now Prime Minister, I think has come up with a very neat solution which has kept everybody happy, and I know that Western Australians are particularly happy.

Under the new arrangements, every state and territory will be better off. There'll be an extra $9 billion in untied funding over the next 10 years, which will go into schools, hospitals, roads, police—all of those services that the state provides which are so important to our communities. By the time the system is implemented, there'll be more than $1 billion extra each year in perpetuity. The government can only do this because the economy is growing strongly. We have economic growth running at 3.4 per cent. Unemployment is down to five per cent, and since the government came to power in 2013 over 1.15 million jobs have been created. So we can afford to do this because we've run a good economy—we've run a very strong economy—and we've been able to find that extra $9 billion to make this happen.

Under this bill, the amendments to the Commonwealth Grants Commission Act 1973 and the Federal Financial Relations Act 2009 will create a new equalisation benchmark of the stronger of New South Wales or Victoria, whichever is higher. All states will transition to this new equalisation standard over the six years from 2021-22 to 2026-27. The benchmarking states' GST distributions to the economies of the two largest states remove the effect of the extreme volatility that we saw when Western Australia had a mining boom. The second part is to introduce a permanent in-system relativity floor of 0.7 from 2022-23, increasing to 0.75 from 2024-25. In the interim, the Commonwealth will separately provide short-term top-ups to Western Australia and the Northern Territory—and, in Western Australia's case, to keep our relativity above 0.7 per cent. So, in 2019-20, Western Australia on the current projections will receive $814 million. In 2020-21, we'll receive $585 million, and in 2021-22 we'll receive $305 million. So the WA government will receive considerable additional money there. It's around $1½ billion over the next three years with which to repair their budget.

When the Western Australian government came to power, they were faced with a difficult financial situation, and they made cuts. I've been in that situation. In 2013 we came into government and were left with a very difficult situation, and you do have to make cuts. You do have to look for savings. But unfortunately the Western Australian government only looked outside the metropolitan area, and they really did go after the little fish—like the School of the Air. Two hundred and fifty kids access the School of the Air in Western Australia that is based out of Kalgoorlie, in my electorate. They went after the School of the Air.

The Moora Residential College has 30 kids in a boarding college a couple of hours out of Perth, and they said they couldn't find the money to do some refurbishment and keep that college open. I mean—really. These are country kids. They obviously, apparently, don't count as much as city kids.

They went after camp schools. There's a camp school in Kalgoorlie and a camp school in Bridgetown, both in my electorate. When I go to school graduations at the end of the year, what those kids say to me, when I ask, 'What was the highlight of the year?' is, 'Going on the school camp.' But they closed down the camp schools. Yes, they managed to palm it off to a third party, but they closed down those camp schools for a period.

We've also seen money pulled out of regional development in the little town of Tambellup and the small communities across the Great Southern. They were successful in accessing $10 million through the Building Better Regions Fund to complement the $11 million that they'd been promised by the previous state government to build not only some decent housing for their own employees but age-appropriate housing for older people in the community. The new Minister for Regional Development in Western Australia pulled that $11 million back out, so that project's now on hold. Hopefully we can get it back up and running again.

Now that more money is available for the Western Australian government, I've got some things that I want to see happen in my electorate of O'Connor. At the state election, the member for Albany and the WA government promised a new ring road for Albany. It's a $175 million project. They've only put $35 million on the table. This is a great opportunity for them to find that extra $140 million to complete that ring road, which they promised at the election.

Also in the town of Albany, the Commonwealth government have promised $6.6 million to fund the purchase of a radiation oncology machine. For the people in the Great Southern, if they can't access cancer treatment in Albany, it's a 400-kilometre trip to Perth. Sometimes that treatment runs for up to six weeks. That's six weeks away from home, family and loved ones, and of course there is the cost of being away from home.

Also, in Kalgoorlie, we've issued a licence for an MRI machine, and the people at Kalgoorlie are now waiting for the state government to install the machine in the hospital there so that they can access MRI scans instead of having to travel 600 kilometres to Perth. These are some of the opportunities that are opened up by the increased money that Western Australia will receive out of our GST fix.

I just want to close by congratulating the Prime Minister and the work that he did as Treasurer for bringing about what has been a very, very comprehensive overhaul of the GST system, which protects all states, not just Western Australia. Of course, we are the primary beneficiaries in the first instance, but who knows what will happen in the medium to distant future?

Other states may well see the sort of windfall revenue gains that we saw in Western Australia with the mining boom. It may be other types of booms that see other states receive those sorts of windfalls, and this system protects them from the sort of damage that was done to the Western Australian economy by the previous system. I endorse this bill to the House and, once again, congratulate the Prime Minister and the Treasurer on the work that they've done. Thank you very much.

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