Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

I want to talk about a grave matter which is of increasing concern to the people of the Northern Territory. We see this government's apparent unwillingness, as evidenced by the Prime Minister's response to a question in question time today about the outcomes and the recommendations of the royal commission recently released in the Northern Territory, to let the Commonwealth provide any substantial financial support to the Northern Territory to fund the recommendations that have been made, which will be at a substantial cost to the Northern Territory taxpayer. I'm raising this because part of what the Commonwealth is doing around Commonwealth-state financial relations has the potential to have a great impact on the Northern Territory—that is, the review of the GST.

The distribution of GST to the states currently provides each state with the capacity to provide its citizens with comparable levels of government services. We know that the Western Australians have been bleating about their GST share for some time. What we are seeing now is a response by the Commonwealth, which is asking the Productivity Commission to undertake a review of horizontal fiscal equalisation. The report is due by the end of January 2018.

In its draft report, the Productivity Commission says:

… [reform] should aim to provide States with the fiscal capacity to provide a reasonable level of services.

− Equalisation should no longer be to the highest—

or strongest—

state, but instead the average or the second highest State …

Not surprisingly, the Northern Territory opposes this change, as I'm sure other smaller jurisdictions do too. The Northern Territory government says there is no evidence in the draft report to support the proposed change to the equalisation process from 'equal' to 'reasonable'.

I might just point out that in its post-draft submission correspondence to the commission, the Northern Territory government has made it very clear to the commissioners that it thinks this is a really inappropriate and unfair act. It has said in its submission to the report:

The Territory strongly objects to, and is extremely concerned with, the Productivity Commission Draft Report's recommendations to diminish the level of equalisation achieved in Australia without a strong evidence-based policy rationale to support such a fundamental change to Australia's federal financial relations.

If adopted, the Draft Report's recommendations will result in a change to the fabric of the federation in a way that would entrench inequity and result in one state's fiscal capacity being allowed to rise above national levels.

We urge the Productivity Commission to carefully consider the implications its recommendations will have on states fiscal capacities and the achievement of equity of access to government services for all Australians, before it provides its final recommendations to the Commonwealth.

The Northern Territory is dependent upon the formula which currently is provided to make sure it can get a reasonable level of services, an appropriate level of services, to its citizens across the Northern Territory. One of the key determinants of the Territory's assessed expenditure needs includes remoteness; the Territory's small population of 245,000, only one per cent of the Australian population, is dispersed over a large land mass and isolated from the main population centres in Australia.

Despite its small population, the Territory still needs to fund the same range of services as large states, so it faces higher per capita costs in providing those services. This is especially true in the provision of services to remote parts of the Northern Territory. Things like roads, schools, health, infrastructure and housing all cost a damn sight more in the Territory than they do in other jurisdictions.

Aboriginal people make up 30 per cent of the Territory's population—in my own electorate of Lingiari, around 42 per cent—while only three per cent of the national population. And we know that the majority of the Territory's Aboriginal population reside in remote and very remote communities. The Territory's Aboriginal population, like the rest of the Australian population, deserves access to the same level of services as other Australians. Those services are only provided if there is an adequate level of funding provided through the GST distribution—that is, through the horizontal fiscal equalisation formula. We should not change it to diminish the opportunities that exist for people who live in parts of Australia other than Western Australia.