Dio Wang (WA, Palmer United Party) Share this | Hansard source

I am one of many fortunate Australians who have worked in the mining industry, which has been a critical social and economic foundation of this country's prosperity throughout history. I was delighted to hear Senator Back's contribution to Senator Day's bill, talking about mateship. I think we should try to adopt the principle of mateship also on this issue. I look forward to the contributions of Senator Back and Senator Smith on my bill in the future.

I worked in the mining industry and I know it is a very tough game. There have always been peaks and troughs; therefore, in the true spirit of fairness and mateship, the highs and lows should be shared among all states and territories. Distribution of the goods and services tax , the GST, has been problematic because it has not been allowed to evolve while the world economic environment is changing quickly. Western Australia has been a victim of the distribution model's failure to adapt to the new terms of global trading, especially those around the iron ore market. Global iron ore trades shifted to quarterly prices five years ago with a lot of iron ore now traded on the spot market. The commodity market has its ups and downs but this shift has made it less predictable. As a mining state, WA has been hit brutally by the volatility of recent years. What made it even worse was that WA's share of GST kept falling during the same period—a double hit to the state budget.

The Commonwealth Grants Commission calculates each state and territory's capacity to raise mining revenue based on data at three-year intervals. Frankly, this is a 20th century way of thinking and it fails to adjust to the way the 21st century world trades. A bad year is a bad year, but the impact cannot be moderated just because the previous two years were not so bad. So the states and territories should be provided with the means to cope with revenue shortfall immediately, not three years later. Using three-year-old mining revenue data has driven a huge reduction in GST distribution to Western Australia at the same time as the actual mining royalties have reduced.

For 10 years now the issue of the volatility of mining revenue has been raised in the Commonwealth Grants Commission reviews of the GST distribution process. The issue is of particular importance to the people of Western Australia and, to a lesser extent, the people of Queensland. I would like to take this opportunity to thank my fellow parliamentarians from WA, especially Mr Tony Crook, who have all advocated for a fairer treatment of WA's GST position.

The Commonwealth Grants Commission Amendment (GST Distribution) Bill 2015 bill instructs the Commonwealth Grants Commission, when considering the capacity of a state or a territory to raise mining revenue in preparing its annual recommendation on GST distribution, to take into account only the most recent financial year for which data is available. Some may say that using annual assessments of royalty revenue will disadvantage the mining states when these royalties are increasing. The argument clearly shows a lack of understanding of the current impacts felt by Western Australia. My bill offers a real buffer for the states against volatility.

Of course, I am putting this bill forward because the GST distribution has not been fair to my home state. But, more importantly, I am doing so because we now know that the distribution model has a problem which is capable of producing undesirable results, as proven in this case by the unfairness suffered by Western Australia. This problem has to be fixed so that it will not haunt another state or territory in the future as that state or territory's economic circumstances and revenue mix change. It could be Queensland; it could be Tasmania; it could be any of my good colleagues' home state should the mining industry become a bigger part of its economy.

I welcome the $500 million of Commonwealth compensation to Western Australia this year. But the fundamental problem with the distribution remains untouched. We cannot sweep the problem under the carpet and pretend the job is done. Why is it that my home state has to cry every now and then, like a baby crying for milk, for what is rightfully ours? Honestly, I do not like the prospect of WA continually doing so in the future. And, dare I say, if it were a bigger state, population-wise, suffering from this very problem, we would have fixed it in no time.

Yes, unanimous agreement by all states and territories is required for the Commonwealth to change the rate of the GST, but no such agreement is needed to modify the distribution of the GST. Under my bill, if legislated, Western Australia would receive $3 billion additional GST revenue in the 2014-15 financial year and $3.5 billion in the 2015-16 financial year. Queensland would also benefit from this bill. But let me say again that the real benefit will be felt nationwide because, once mining revenues go up, other states' share of the GST will go up immediately in the following financial year. This is true equalisation, true mateship.

I am putting forward this bill for WA, a state I love, a state I am a representative of here in this parliament. I make no apology for doing this because WA has been ripped off for too long. But all states and territories will also be better off from this long-overdue change. I believe this bill represents the best interest of this nation.