Patrick Gorman (Perth, Australian Labor Party) Share this | Hansard source

To stand in this place and provide a fair go for Western Australia is an honour. Too often, Western Australians feel like they are the forgotten state of the Commonwealth. When it came to the distribution of the goods and services tax that Western Australians pay, that was definitely true. Today, the parliament is recognising Western Australia. The parliament is recognising the tax that Western Australians pay and the principle that they should get a fair share of that tax back in their state.

It would be remiss of me not to start by congratulating some of the campaigners who have led to this reform. And it has been a campaign; it's been a campaign that's taken many years. I congratulate my fellow Labor colleagues, the WA Labor members of this place and the WA Labor senators. I also congratulate the Leader of the Opposition, the shadow Treasurer and the shadow minister for finance. They've all listened carefully to Western Australia. They listened to what it is that Western Australians say they need and they listened when Western Australians elected the Mark McGowan Labor government in 2015, saying, 'The current team were unable to deliver a fair share for WA.' I also congratulate the now Treasurer of Western Australia, Ben Wyatt.

It's not just been a campaign that has involved members of state and federal parliaments; it's involved The West Australian and, once a week, The Sunday Times also campaigns for a fair share of the GST for Western Australia. I also acknowledge a range of trade unions have campaigned to ensure that Western Australia gets its fair share so that we can fund the vital services that Western Australians rely on. Equally, the Western Australia Chamber of Commerce and Industry has been a loud and clear voice for change in the distribution of the GST.

The goods and services tax was introduced on 1 July 2000. Back then, I was in year 10. My friends and I thought that, despite not being super keen on the introduction of the GST—effectively a regressive tax—we thought it would be nice to be some of the first Western Australians to pay the GST. So we hatched a plan that we'd go to the local Macca's, we would wait until the clock struck midnight and we would buy ourselves some McDonald's and pay the GST, being some of the first Western Australians to do so. My parents did not think this was as good an idea, and I did not do that. I raise the importance of visiting McDonald's because, when we look at the share of the GST that Western Australia received, it got down to basically 30c in the dollar. Thirty cents doesn't buy you much, but, back in 2000, 30c would buy you a McDonald's ice cream. Thirty cents no longer even buys you a McDonald's ice cream. In fact, in preparing for this speech, I struggled to find much that you can buy for 30c these days, so I had to do some maths instead. Thirty cents will buy you three kilograms of iron ore; 30c will buy you, roughly, 612 staples; and it will buy you less than 500 millilitres of Coca-Cola. So it's no surprise that Western Australians thought that 30c in the dollar was completely unfair. It was a pittance and it was unacceptable.

The need to provide Western Australia with a fair share of the GST is also a need for us, at the federal level, to make sure that we are providing what that state needs to run a state economy. When it comes to the suffering that Western Australia experienced during this time, we cannot understate that suffering. The anger is well highlighted by the fact that I've been able to count—and I'm sure this is an inaccurate number; it probably vastly understates the number of editorials—78 editorials in the past six years in The Western Australian alone calling for the reform of the GST. In fact, one report in The West Australian revealed that Western Australia had lost almost a third of the GST collected since the inception of the GST in 2000. In other words, one-third, or $30 billion, was taken out of Western Australia and redistributed to other states as we saw that share of the GST decline below 70c, decline below 50c and go down to that embarrassing figure of just over 30c.

Thirty billion dollars taken out of Western Australia is a huge sum. With $30 billion, Western Australia could have purchased the entirety of Caltex Australia, Seek Limited and Coca-Cola Amatil and still have had change to buy Domino's Pizza, although I don't think there's much of an argument that I can make in this place to have any government, state or federal, in the pizza-delivery business. But, nonetheless, there is no doubt there is a need to redistribute some money to other states to accommodate for the different challenges that different states face at different points in the economic cycle.

However, no-one ever expected that we would get to this point of unfairness. Indeed, former Prime Minister and the architect of the goods and services tax—he proudly says it's one of his greatest achievements—John Howard, said that top-up payments of the GST were never going to be necessary. In fact, when he announced the goods and services tax, Mr Howard said:

For as long as any of you can remember one of the least ignobling characteristics of government in this country has been the annual begging-bowl pilgrimage to Canberra by the States.

Well, the system that was created by the introduction of the goods and services tax led to exactly that on a grand scale. It led to my state of Western Australia having to beg for top-up payments just to make sure they could keep the essential services of the state running. It's not good enough. It has not been good for any part of our Commonwealth to see that be part of our distribution of funds across our states and territories.

I'm going to follow on from the member for O'Connor and commend former Prime Minister Turnbull for his work on this package. Mr Turnbull had a cooperative approach. He recognised that, when Western Australians voted for the Mark McGowan Labor government, they were sending a message all the way to Canberra. They were sending a message that we needed to address this problem. It was the No. 1 issue on the minds of many Western Australians when they thought about what fairness from a federal government means to them. Prime Minister Turnbull was listening to Premier McGowan, and I'm pleased that, with the passage of this legislation, we'll see Premier McGowan and Treasurer Ben Wyatt begin to return the state's budget to a surplus position and begin to repay debt.

You can't spend all of these funds on just repaying debt. You have to build for the future. You have to invest in the future. There are many projects in Western Australia that may be able to get off the ground because Western Australia now have a stronger budget position and can think about what else might be needed to grow the Western Australian economy. One would be the investing in a light-rail system across our city and through my electorate of Perth, connecting places like Curtin University, the Burswood peninsula and Elizabeth Quay, and going all the way up to Kings Park, a beautiful tourist attraction, and onto the medical precinct and the University of Western Australia. This may also allow the state government and their body, the Metropolitan Redevelopment Authority, to finally fix the eyesore and the disgrace that is the rotting of the East Perth Power Station and turn it into a national tourist icon, possibly full of art, culture and music, or a museum of national significance.

We could also invest and reinvest in our community at a local level. I know that other members will be speaking on a range of things that we could invest in, including community sport and community infrastructure. Whatever the case, when we get to the point of looking at how the nation has got to this point of debating this legislation, you have to accept that it's only because Labor has led this debate time and time again that we've got the legislation that we have in front of us today. Indeed, it was the Leader of the Opposition and Labor who first proposed significant and serious top-up payments to lift Western Australia's share of the distribution of the goods and services tax. It was on Saturday, 26 August 2017 that the Leader of the Opposition, Bill Shorten, announced that a Shorten Labor government would invest $1.6 billion in a Fair Share for WA Fund. That was carefully considered policy aimed at making sure we delivered a fair share for WA without making any state worse off. It was the first time we'd seen a concrete proposal to deliver an effective floor of GST for Western Australia, delivering a 70c floor.

It was then at my campaign launch in July this year that the opposition leader said we should 'make the floor the law'. It was a great initiative to say: if you're going to have a floor on the GST, you have to legislate it. It's the only way that you can give certainty to the state that, in fairness, had some pretty good reasons for not trusting that they were going to get a fair share from Canberra. The opposition leader said:

… we also have … a plan for the GST. We have a plan which Labor has led, working with the McGowan Government and Labor nationally, to establish a floor. And what we say today is that not only do we support there being a 75 cent floor, we want to turn the floor into law.

It was a promise that was eventually adopted by the government, and it was good that the government listened to the opposition leader and agreed to legislate. It was also the opposition leader, and the shadow Treasurer, who said that we must legislate to make sure that no state is worse off. I'm joined in the chamber by a number of colleagues from Tasmania, who saw what happened to Western Australia. They saw the state have its budget smashed by an unfair distribution of the GST and they said: 'What happened in Western Australia is pretty bad. It would be terrible if, in fixing one state's problem, we were to start smashing another state's budget.' One of the things I commend my Tasmanian colleagues for is looking to the future. What former Prime Minister Howard and Colin Barnett, the then Treasurer in Western Australia and later the Premier, failed to do was look to the long-term effect. They could see that there was a huge mining boom on the way. The distribution formula was already on paper, but no-one thought: what will happen in different economic circumstances? I commend my Tasmanian colleagues for actually thinking through the implications of what we do and, again, I commend the shadow Treasurer for making sure we looked at the legislation and called for a no-state-worse-off guarantee. And I give credit to the current Prime Minister and the current Treasurer: they have listened and enacted that in the legislation before us today.

There are, of course, other tax policies that the Prime Minister and Treasurer may wish to look at in developing a fair economy for all Australians. One is Labor's tax refund for working Australians. Labor's policy would deliver a bigger, fairer tax cut for 10 million working Australians. Labor have proposed reforms to dividend imputation, ensuring that we deliver billions of dollars back to the bottom line of the budget and remove excess cash refunds from dividend imputation credits. We have proposed reforms to capital gains tax and negative gearing, limiting where you can claim those negative gearing amounts and reducing the discounts to ensure our tax system is fair and equitable. Probably most importantly when it comes to making sure we collect a fair share of tax here in Australia for all Australians, we have proposed a comprehensive package on multinational tax avoidance, which would improve the budget bottom line by $3 billion over the decade. In addition, Labor will restore integrity to Australia's tax system and stop Australian profits being stashed away in tax havens. Labor will cap the deductions for managing tax affairs at $3,000 and introduce discretionary trust reforms.

I mentioned earlier the need to look to the future and look to the long term to make sure that errors don't happen again. But I've also got to mention that the member for Pearce, the Attorney-General, must take some responsibility for his role in failing to act and failing to campaign hard enough for a fair share of the GST when this problem emerged in 2011-12. The Attorney-General, when he was Treasurer of Western Australia, said:

What we reasonably anticipate is that in 2013-14 the CGC will have brought in a new GST system.

That did not happen. It took many years. It took strong advocacy from my colleagues in the Labor Party, strong advocacy from the shadow Treasurer, strong advocacy from Premier Mark McGowan, strong advocacy from Treasurer Ben Wyatt and creative policy to ensure WA gets a fair share of the goods and services tax.

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