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Thursday, 22 March 2012
Page: 2667

Senator BACK (Western Australia) (18:38): It is with some disappointment that I rise to note the Commonwealth Grants Commission's Report on GST revenue sharing relativities: 2012 update. I go to section 2, the recommendations, and it is incredibly distressing to notice that, in the first place, my home state of Western Australia is on a relativity of only 0.71, that being 71c in the dollar, this current financial year. That is against others such as New South Wales, on 96c; Victoria, 90c; Queensland, 93c; South Australia, $1.27 per dollar; Tasmania, $1.60 per dollar; the ACT, $1.11; and the Northern Territory, no less than $5.35. That in itself is distressing enough, but, when you look towards the recommendations for 2012-13, Western Australia's share of 71c in the dollar decreases to 55c in the dollar, and further into the out years—and the understanding by our Treasurer is that that figure will decline even further.

What does that translate to in dollars? I am pleased that my colleague Senator Sterle from Western Australia is here to hear these figures. He may need to get his handkerchief out for his tears. What it means for Western Australia is a decline of some $820 million, and the beneficiaries—for whatever reason I do not know—are the ACT, who get an extra $50 million next year; and the Northern Territory, an extra $82.6 million, although as I mentioned they are already on $5.35 per dollar that they actually earn; and the other states in the main—New South Wales lose a bit. Queensland do gain, and one can understand that with the floods of last year, although they did fail to take out insurance, as all the other mainland states did.

I say this is distressing for one reason—that is, in calculating the formula for horiz­ontal fiscal equalisation, the commission looks at the income-earning capacities and activities of each of the states. It is true that in my home state of Western Australia 20 per cent of its revenue comes from mining, and that is taken into account in the distribution. But what is, I think, absolutely annoying is the fact that, in many of the other states of Australia, 10 per cent of their revenues come from gambling, yet gambling is excluded in the formula calculating the GST carve-up amongst the states and territories. There is no logic to 10 per cent being overlooked when, in the case of mining, 20 per cent is not.

The other point that I have made—and, Madam Acting Deputy President Moore, I think you may have been on the committee under the chairmanship of then Senator Trood—is that one of the other problems with the formula calculating GST is that there is nothing in the formula that actually looks at the capacity, willingness or ability of each individual state or territory to either maximise its revenue or contain its expenditures. I think that is totally illogical.

Premier Barnett, from Western Australia, refers to Tasmania—somewhat disparag­ingly, perhaps—as 'Australia's national park', but he is right in many ways. Having lived and worked in that state, having invested heavily in that state, I know that it is a state with enormous capacity to earn revenue. And yet at every turn, mainly through the agency of the Greens political party, those revenue-earning streams are continually being cut. It is fine if there is no imposition on the people of that state. We can all understand horizontal fiscal integration. We can all understand that wherever you go around Australia you want equivalence—not equal­ity but equivalence—in roads, transport, health, education and safety. But there has to be an obligation on each state and territory to actually optimise and maximise its revenue and to try and minimise its expenditures.

Of course, as I have said before and as I said in my first speech in this place, it is an old veterinary fact that, if you fail to feed the cash cow, one of the first things that will dry up is the milk at the other end of the cow. If we do not invest in infrastructure towards improved productivity, then we are not going to be able to maximise and optimise the very necessary revenues that are required for each of the states and territories. I seek leave to continue my remarks later.

Leave granted.