Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

Today I want to talk about the budget. I acknowledge that there are some positives in the budget. The economy has been tanking and the reintroduction of accelerated depreciation will be a positive fiscal stimulus. But like the member for Denison, I cannot support things such as the family tax benefit cuts once children reach the age of six. That is completely unjustified. This could have been more than covered by the superannuation tax concession cutbacks to high-wealth individuals, as promoted by Labor. So we could get the same budgetary outcome but with a much fairer spread of the tax concessions. I want to focus on the situation in Western Australia.

WA's fiscal and economic future remains bleak. The federal budget offers only little relief. WA's share of Commonwealth funding will fall to just 6.9 per cent of total government payments to states and territories in the coming financial year. This is despite the fact that we have over 11 per cent of the population and we are 16 per cent of the economy.

WA's GST revenue could fall as low as 18c for every dollar collected in the state, according to the forecast of the Commonwealth Grants Commission. The GST share this year is a record low of 29c in the dollar, but, when we look at the Commonwealth Grants Commission projections, it shows it falling further to 23c and then subsequently to 18c. We see in the budget a secondary set of projections that have been made by Treasury, and these have been based on an iron ore price of $38 a tonne. Under this scenario, we do see WA's share recovering slightly to 32c and then ultimately to 51c. But this is predicated entirely on there being a sustained iron ore price of $48 a tonne, which of course is significantly lower than the current iron ore price. So, I would put it that either way it is a lose-lose for WA.

Mining investment is projected in the budget to fall by around 25 per cent next year and 30 per cent the year after. This is going to have a particularly adverse effect on WA. (Time expired)