Ben Morton (Tangney, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018. This legislation delivers once and for all a permanent fix to WA's unfair share of the GST. It is not a bandaid. It is not a political quick fix. It is a sustainable change to the GST distribution system that delivers the GST share that WA deserves. This is a story of action and a story of inaction: a story of action by Liberals representing Western Australia, and a story of inaction from Labor Party members and senators who represent Western Australia.

WA Liberal members and senators have long advocated for this GST reform. We remember when the Prime Minister announced the Productivity Commission inquiry into the GST. He said it had only happened through the strong advocacy of every single WA Liberal member and senator. I thank particularly my colleague Senator Dean Smith, who has long championed the Productivity Commission approach. In fact, it's the hard work of all WA Liberal MPs and senators, and indeed all Western Australians, that has kept this government and previous governments focused on delivering this real solution.

This legislation will secure $4.7 billion in extra GST for the essential services we need. It will lock in a 75c GST floor so WA gets more of the GST that it pays. The government will rewrite the old GST formula and we will also invest more funding in the system so that WA and every single state and territory are better off. The government's GST plan is fair, reasonable and sustainable. There's a fair go principle to the way the GST is shared around the country, and I think every Australian accepts that. Strong states support the less strong states. We make sure that every Australian, no matter where they live—east or west, country or city—has access to the essential services, the things we all rely on, like frontline nurses, police officers and teachers.

The fair go principle that's used to distribute the GST between the states and territories must also recognise those states that have a go. WA is an amazingly entrepreneurial state. Our state has grabbed hold of the mining resources. We have developed those resources. We have created thousands of jobs for WA families and the many thousands of people who chose to move to WA to make a better life for themselves and their families. WA drove the national economy and contributed an extraordinary amount of revenue to the development of our state and our nation. But, off the back of the mining boom, every Western Australian knows so well that the GST formula didn't keep up with the realities of the economic situation. WA got down to below 30c in the dollar. When introducing this bill, the Treasurer made the following point:

The situation was so ridiculous that Tasmania and the Northern Territory both received more GST revenue than Western Australia, despite having populations that were one-fifth and one-tenth, respectively, of the size of Western Australia's population.

The current system of GST distribution was effective when the Australian economy and the state and territory economies were relatively stable, but the mining boom was a shock to both the WA and Australian economies. It has exposed weaknesses in the system over the last decade—weaknesses that could not have been foreseen when the GST was introduced. So it was time to make improvements to the system.

I congratulate the then Premier of Western Australia, Colin Barnett, who championed GST redistribution and raised WA's abysmal share of GST as the No. 1 issue when he represented WA interstate. Colin Barnett well and truly brought the fight to Canberra, and he's to be credited with the fact that national political attention has been so well focused on this issue. I will defend Colin Barnett—unlike those opposite, who seek to denigrate his time in office. Under Colin Barnett's leadership of the state of Western Australia, 450,000 people came to Western Australia to make WA their home. The families of those 450,000 people had teachers in their schools. The essential services we rely on kept pace with that population growth. Labor accuse Colin Barnett of reckless spending, but they never say which projects Colin Barnett invested in that they would do without. They certainly don't do it when they're celebrating the corporate hospitality they enjoy at Perth stadium.

The national headlines saw Colin Barnett arguing WA's case. Mr Barnett focused the Rudd and Gillard governments day in, day out on a better share of the GST for Western Australia. But federal Labor just weren't interested in helping the west. They were interested in milking WA. That's exactly what they did. Mr Barnett argued that WA should receive no less than 75c of each dollar we collected in the GST, and we have to remember this very strong advocacy for WA, especially when we look at where we are today, after a very long journey. This floor is now included in this legislation to lock into law WA's fair share of GST.

Despite Rudd and Gillard Labor hanging WA out to dry, the first action of this Liberal government when we were elected in 2013 was to put a stop to the drop in WA's GST share. This government, our government, has invested an extra $1.4 billion in additional essential infrastructure and hospitals funding for WA to top up our GST share, the first government to do so. This government took action after years of inaction from the Rudd and Gillard governments. The top-up funding was an invaluable investment in our state. But top-up funding for individual states is never going to be a long-term solution for the GST. I've likened this to a patient who presents at the emergency ward of a hospital. That top-up funding was that patient in emergency getting much-needed pain relief. They welcomed it. It was important. It kept them going. But WA is not a state that wants to rely on welfare or pain relief. We wanted a real structural fix to the distribution of the GST that was fair and reasonable. Those cash injections and top-ups were welcome, but they weren't the solution that we so desired, because we know that the GST formula needed to change. Not once did the Labor Party advocate changing the GST formula. They wanted to keep WA on welfare in just the same way they'd like to keep so many Australians on welfare as well.

So the Prime Minister tasked the Productivity Commission with reporting on the impact of the GST distribution on national productivity and economic growth. I remember that meeting well. Treasurer Scott Morrison, now Prime Minister, explained to me and my colleagues that as the Treasurer for this Federation, the Commonwealth of Australia, he needed to act in the best interests of the Commonwealth and of our nation as a whole, not in the best interests of one state over another. That's why he set in place this process for the Productivity Commission to gather the evidence that was so required to prove that the GST distribution was bad not only for Western Australia but for our entire nation. As we predicted, the PC inquiry confirmed that the system for distributing the GST was broken and needed to be fixed. The Productivity Commission review gave us the pathway to reform and the evidence we needed to make critical long-term GST reform that sticks.

States that have a go will get a go with the new GST formula. Entrepreneurial states that seize and develop their opportunities, as WA does so well, will no longer be penalised. Reforms outlined in this legislation will deliver an additional $9 billion in extra untied funding to all states and territories over a 10-year period, and an additional $1 billion in perpetuity, once fully implemented, will be CPI linked. Payments will be verified annually by the Commonwealth Grants Commission and adjustments made accordingly. The government's additional contribution to the GST pool will not be offset or see a decrease in other grant funding to the states. This is more funding to invest in schools, hospitals, roads and transport.

To assist the transition to the new GST distribution system, the Commonwealth will provide short-term funding to ensure no state receives less than 70c per person per dollar of GST. This rises to 75c from 2024-25. Benchmarking all states and territories to the broad-based economies of our two largest states, New South Wales and Victoria—whichever is higher—will remove the extreme circumstances like the mining boom from Australia's GST distribution system.

The productivity inquiry gave the government the evidence it needed to make critical GST reform. The Chamber of Commerce and Industry of Western Australia and in particular its chief economist, Rick Newnham, also played an important role in ensuring that other states and territories best understood the impact that this failed GST formula had in relation to WA and in relation to the national economy.

This legislation provides the certainty that is needed for the new GST distribution system in the long term. We are committed to transitioning to a new GST system and a new GST formula in a way that's fairer and sustainable and that benefits all Australians. With this legislation, Australia will have a GST distribution that protects against economic shocks and provides a more stable source of revenue for all states and territories. Every Liberal member across the country is backing hardworking Australians and backing this government to fix the GST.

This commitment to backing hardworking Australians isn't always shared by members opposite, because Labor say a lot and do nothing. The Rudd and Gillard governments did absolutely nothing to fix the GST. After holding out for so long, the current Leader of the Opposition has been dragged reluctantly to support the GST reform. There has been much confusion about where Labor actually stand on fixing the GST, including fixing the GST formula in the long term. For so long, Labor clung to a policy to fix the GST formula that in fact didn't change the GST formula in any way.

The member for Burt said that Labor would just have to consider top-ups, recognising the political reality that actually changing the GST is almost impossible. So said the member for Burt. The member for Burt also said that, if the government did adopt a change to the formula, it might happen in the land where pigs might fly. Well, the pigs are flying, Member for Burt. You gave up; we delivered. We got on. We are reforming the GST. You weren't. You were going to keep WA on welfare, and that was wrong. So, Mr Deputy Speaker, I hope the member for Burt is looking very closely at this government's real fix to the GST that locks in a floor, changes the GST formula and guarantees additional funding for every state and territory. Through the confusion, Labor gave up. For Labor, it all got too hard. But this Liberal-National government and this Prime Minister are not scared of the hard decisions. We've stayed the course, and we've delivered the real GST reform that we need, in this legislation.

Australia is seeing strong economic growth, record job creation and a federal budget that is on track for a return to surplus. That's not good luck. Good management and fair economic policies put in place by this government have contributed to the work of so many hardworking Australians and the jobs created by small businesses in this country. The Prime Minister's leadership and determination on fixing the GST; tax relief to encourage hardworking, aspirational Australians; backing small business to create more jobs; and getting electricity prices down are delivering for all Australians.

This government's GST plan is real. It's long term. It's a permanent fix to the GST solution, which the WA people deserve. It is a plan that has been delivered by the Liberal and National parties, not a plan that has been delivered in one way by those members from the Labor Party opposite, particularly those members from Western Australia from the Australian Labor Party, who have made no practical contribution at all to this real fix. As I said, the member for Burt thought it was all too hard. He explained this legislation as occurring only on the day that pigs might fly. Well, Member for Burt, the pigs are flying. The government's plan to fix the GST is real: a long-term, permanent solution that WA deserves and the plan that will benefit every state and every territory.

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