Michaelia Cash (WA, Liberal Party, Shadow Parliamentary Secretary for Immigration) Share this | Hansard source

I rise to address the Commonwealth Grants Commission's CGC report on state revenue sharing relativities,2013 update, published last week. Senators will be aware that the Treasurer, pursuant to sections 16, 16A and 16AA of the Commonwealth Grants Commission Act 1973, refers annually to the CGC for inquiry into and report, the question of the per capita relativities to be used to distribute GST revenue among the states, the Northern Territory and the Australian Capital Territory in 2013-14. In response to the terms of reference conveyed by the Treasurer to the CGC on 8 March 2013, a report titled Report on state revenue sharing relativities, 2013 update, was forwarded by the CGC to the Treasurer on 12 March 2013 for the consideration of the government which has the capacity to either accept, reject or amend the CGC's recommendations.

I have read the report and, as a senator representing Western Australia, I have to say that should the government accept the CGC's recommendations, the financial outcome will have disastrous consequences for the state of Western Australia. The report recommends a reduction of $549 million in GST distribution for 2012-2013 and a further reduction of $379 million for 2013-2014. These proposed reductions come on top of significant reductions in previous years that have already been borne by the state of Western Australia.

I should also say that given the contempt this Labor government has for the people of Western Australia, it is highly likely the Labor government will continue to punish Western Australia by adopting the recommendations in the report. The Prime Minister's well-known contempt for the people of WA was no doubt a contributing factor for the significant loss that WA Labor suffered at the recent state election, and: these sentiments were expressed by the former Labor Minister Alannah McTiernan who last week, just two days after the election, on the ABC program The World Today, said:

There is absolutely no doubt from a West Australian point of view you would say, you would plead with Julia Gillard to stand down. That the people just do not accept her as the Prime Minister—

In their latest 2013 relativities report, the CGC is recommending that Western Australia's share of the 2012-2013 GST distribution be reduced by $549 million. That is just over half a billion dollars, by far the greatest reduction of any state or territory and in fact more than twice the amount of any other state or territory. Our Premier, Mr Colin Barnett, has already expressed his frustration with Canberra and has indicated that Labor's attack on Western Australia's finances will cost us projects and jobs. Only last Friday, ABC News reported that West Australian Premier Colin Barnett had described the proposed $549 million reduction in the state's GST return as 'outrageous and galling', saying that the decision is a huge blow to Western Australia's finances and cuts will have to be made. Mr Barnett said:

… for the first time in Australian history, a state's share has fallen below 50 cents in the dollar.

That means we've got to cut back on expenditure and education and health, those services.

That's grossly unfair for a growing state where over 1,000 people a week are coming to live in WA.

How can the WA state government be expected to plan with certainty when it is faced with the uncertain outcomes from the CGC methodology, method reviews and annual updates? How can WA continue to be the economic powerhouse of the nation when it is faced with these fiscal distortions which impact on its economic decision making and destabilise those making investment decisions intended to generate future economic growth, not just for Western Australia, but also for the benefit of the nation as a whole?

Even the most ardent of Labor supporters would have to concede that Western Australia is making a massive contribution to the national economy and that contribution assists in providing improved living standards across Australia. Why then does Labor want to destroy opportunities for growth in WA which will ultimately benefit all Australians? We know that the Gillard Labor government has nothing but contempt for the people of Western Australia and that Labor's mining tax and carbon tax were aimed at our mining industry and have had a detrimental impact of Western Australia. But you have to ask the question: why does Labor want to kill the goose that has been laying the golden egg and providing the federal coffers with much-needed funds so Labor can introduce its failed schemes and programs like the $3.5 billion pink batts disaster, or the $275 million Green Loans debacle, or the massive wastage identified in the $16 billion Building the Education Revolution? That one was identified by Labor's own BER Taskforce headed by Mr Brad Orgill, which recommended the program cease in its current form because of the wastage and failure by Labor to properly manage it.

I ask why is Labor on a political suicide mission because the CGC report, apart from recommending that Western Australia lose $549 million of funding in this financial year, goes on to recommend that Western Australia lose an additional $379 million in the next financial year, 2013-2014? This is from a projected GST distribution of $2,870 million in 2012-2013 down to $2,491 million, representing a reduction of $379 million for the state that works hard to produce national wealth that benefits all Australians.

WA is the only state that will see a fall in its GST revenue in 2013-2014. All other states and territories will see an increase in their GST revenues, and I refer to table 2 on page 4 of the CGC report which shows the following net increase or decrease for fiscal 2013-2014 compared to fiscal 2012¬2013 as follows: New South Wales will receive an additional $974 million; Victoria an additional $444 million; Queensland an additional $1,379 million; South Australia an additional $142 million; Tasmania an additional $118 million; the ACT an additional $79 million; the Northern Territory an additional $23 million; and Western Australia is the only state which is receiving a negative $379 million.

Again I reiterate that the only state to show a reduction in GST distribution is Western Australia. I can assure you from the conversations I have had in the last week that the people of Western Australia are not happy with this situation given the massive contribution that Western Australia makes to the gross national product.

Western Australia has argued for years that the CGC needs to recognise the flaws that exist in the present system. Western Australia has consistently said—I refer to WA's 2007-2008 economic and fiscal outlook budget paper, which has set out some of the obvious flaws in the CGC process—that WA continues to be penalised for the work it has done in the past in encouraging mineral and petroleum exploration, which has now matured into economic benefits for the whole of Australia; and the current CGC formula fails to take into account the real costs of economic success and in its present form has the effect of rewarding failure or non-achievement rather than rewarding success and recognising the costs associated with achieving that economic success.

We need a CGC formula that rewards best performance and embraces the principles and concepts of competition and productivity. This formula must avoid ambiguity and be able to respond promptly to changes in economic issues and changing economic circumstances. Success must be encouraged and rewarded; failure must be discouraged. We need a CGC formula that rewards best performance, embraces the principles and concepts of competition and productivity and does not destroy the opportunities for growth in Western Australia that will ultimately benefit all of Australia. (Time expired)