Dean Smith (WA, Liberal Party) Share this | Hansard source

Over the last year, one of the things that has disturbed me as a senator for Western Australia is the rather gloomy prognosis about the performance of the economy in my home state of Western Australia. I make it clear from the outset that things are far from perfect at home. I am under no illusion about the scale of some of the challenges and know that there will need to be further economic reform undertaken in order to deal with them. Likewise, I understand that there is a state election in the offing in March next year and that some of what we are seeing and hearing amounts to the usual politicking—and that is of course to be expected.

But my impression is that, as significant as some of the challenges are, some of the commentary is unduly negative. We do not need to be down on ourselves in Western Australia. The one thing we know about Western Australians is that they are tremendously resilient. We have met challenges in the past, and I am confident in our ability to meet our current economic challenges as well. Indeed, the WA state government and the Turnbull government are both working to deal with these challenges, in marked contrast to the approach of the Labor Party both here in Canberra and in WA. But I will come to that a little later. There are some aspects of WA's present economic circumstances which have been well ventilated in public discussion—most particularly, the impact the fall in commodities prices has had on our economy. But there are other aspects of the story that are less well understood, and it is those that I want to detail today.

In particular, it is time to correct the myth that the WA state government is not doing anything to deal with the challenges that confront the state's fiscal position. That is plainly wrong. Indeed, late last month we saw some very interesting data that I think is worth examining. The annual report on state finances which was released on 22 September confirmed that spending growth in Western Australia for 2015-16 was down to 2.4 per cent—the second-lowest level in more than two decades. The report also found that salaries across the general government sector grew by just 2.6 per cent in 2015-16, which represents the lowest increase in 17 years. It also highlighted that total public sector net debt came in $513 million lower than in 2016-17 and a substantial $3.6 billion lower than what was originally predicted in the 2015-16 budget forecast. Bear in mind the context in which this has been achieved: during unprecedented revenue downturns over the past two financial years. There has been a significant fall in royalty income, which is down $477 million on the 2014-15 figure.

Despite the fact that economic conditions are certainly more difficult than they were two years ago, WA's GST grant share has fallen a further $377 million on what it was two years ago. This is what I mean when I consistently say in this place and elsewhere that the GST distribution system is broken. I will not talk about it at length today—there will be other opportunities—but suffice it to say this statistic alone makes it clear that WA's entitlement is being calculated by the Commonwealth Grants Commission using outdated data that does not reflect economic reality of Western Australians.

There has also been a $249 million decline in WA's North West Shelf grants, reflecting the significant weakening in the oil price. Yet despite these challenges, the WA state government has managed to significantly rein in spending growth. This has been done though a mix of measures that have been implemented to improve efficiency in the public service. And it has also been done whilst continuing to deliver the high-quality services that the people of Western Australia have come to expect.

Those pressures are significant. Let us remember: during the time the current WA state government has been in office, the population of our state has grown by some 400,000 people. That is almost equivalent to the entire state of Tasmania moving to the state of Western Australia. Now, many of those people were attracted by opportunities in the resources sector when commodity prices were higher, but they did not all suddenly pack up and move back from whence they came when commodity prices started to fall. Whether commodity prices are high or low, these new residents still need roads to drive on. They still need public transport services. Their children still need good schools to attend. They still need to be able to access hospital services when they are needed. They still need and deserve to feel safe and secure in their own communities.

And despite the financial challenges, the Barnett government has worked to meet this burgeoning demand. Just look at some of the results in one of those key areas of state service delivery: education. During its time in office the Barnett government has invested more than $2.8 billion on 32 new primary schools, nine new secondary schools, 15 replacement schools, 1,424 new classrooms in other schools and a host of upgrades to laboratories and workshops. And more than ever before, these are schools which are determining their own destinies. By the start of the next school year, around 83 per cent of Western Australia's public school students will be attending independent public schools. Under this initiative, the WA government has stripped away the barriers that used to shackle principals and staff from doing their teaching jobs effectively. With more autonomy, principals can hire the teaching staff that best fit their school's needs, run their own budgets and make their own operational decisions. In other words, these are schools that work for students and local communities rather than for teaching unions and bureaucrats. Perhaps this is why Western Australian students are leading the nation in the National Assessment Program—Literacy and Numeracy.

There have been other significant economic achievements. The value of business investment in Western Australia has grown by $424 billion since the Barnett government took office, compared to only $159 billion under Labor. Gross state product has grown by an average of five per cent per annum, exceeding the national average and growing WA's share of GDP to 15.4 per cent. The value of exports from Western Australia has increased by over $40 billion and, most importantly of all, around 200,000 jobs have been created.

It was heartening to see today's news regarding the Chamber of Commerce and Industry's consumer sentiment survey in which 54 per cent of respondents said they expect WA's economy to improve or remain stable over the next year. Add to this the fact that we have, for the first time, an agreement between the WA government and Canberra to finally establish a floor below which no state's share of GST revenue can fall. One can see that, after some dark days, there is optimism returning.

However, the election of Labor governments in Western Australia and indeed at the national level will put all this progress and all this prosperity at risk. I cannot help but notice that, while the federal Labor Party has been quick to criticise the Prime Minister's announcement of GST revenue floor, they have not actually committed to that themselves. Western Australians know what that means: Bill Shorten will sell Western Australia out at the first opportunity. And WA Labor leader Mark McGowan—a man who as education minister could not even manage to make sure there were enough teachers across Western Australia's classrooms—is hardly going to stand up for Western Australia.

I also noticed this week that the Labor treasurers of South Australia and Victoria said WA's unfair share of GST was WA's own fault. Well, I suppose they would say that. But I would be embarrassed if I were in their position—especially South Australia, which would simply go under if it were not for WA's contribution of significant GST revenue to its state coffers. Grateful as I am sure my WA colleagues are for the lectures on economic reform from state Labor governments, I would note they are coming from a state which paid $1.1 billion not to build a road, in the case of Victoria, and a state which cannot even keep its lights on, in the case of South Australia.

The one thing Western Australia cannot afford now is to hand the responsibility for managing its state economy to people who think in that way. Labor's economic program in Western Australia gives no cause for hope. Indeed, those few elements of WA Labor's economic policy we do already know about would risk crippling the WA economy. These include Labor's plans to close the gate on future onshore gas projects, closing off opportunities in an industry that has operated safely in Western Australia since 1958. They include Labor's plan to ban uranium mining before it even begins, which would cost more than 2,000 local jobs and kill an industry that could be worth more than $1 billion to WA by 2020. Add to this WA Labor's promise to reintroduce bans on GM canola, something that has been safely grown and harvested in WA over several years now, as well as other promises for additional red and green tape— (Time expired)