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Wednesday, 2 March 2016
Page: 1610

Goods and Services Tax


Senator WANG (Western Australia) (14:29): My question is to the Minister for Finance representing the Treasurer. For years now the call for a fairer distribution of GST has gone unanswered. The Western Australian Treasurer has warned his federal Liberal colleagues to stop pussyfooting around, or both Liberal governments would be held accountable over repeated promises for reform. As one of the WA cabinet ministers in the Liberal federal government, which has been in power for some years now alongside a Liberal WA government, can the minister explain to his fellow Western Australians why the government has not already made a change to the method of sharing GST revenue among states to make the distribution fairer?


Senator CORMANN (Western AustraliaMinister for Finance, Deputy Leader of the Government in the Senate and Special Minister of State) (14:30): I thank Senator Wang for his question. I remind Senator Wang that it was this government that last year stopped the drop in GST revenue for the great state of Western Australia. Indeed, the way we did this—I believe at the time with some supportive comments from the Leader of the Opposition—

Senator Lines interjecting

Senator CORMANN: You would not think that Labor was supportive when you listen to one of the few remaining Labor federal members of parliament from Western Australia, Senator Lines. We have had four out of six pull the pin—what a vote of no confidence in the current leadership of the Labor Party! There are only two of them left, Senator Sterle and Senator Lines, and Senator Lines is jumping up and down complaining about the fact that this government invested an additional $500 million into infrastructure projects in Western Australia to ensure that the share of the GST for Western Australia effectively did not continue to drop. We said that once the GST relativities were released by the Commonwealth Grants Commission this year, we would assess what, if any, additional funding would be required in a similar fashion to ensure that the GST share for WA did not continue to drop below the 37.6 per cent that it was in 2014-15.

The truth of the matter is that GST is a tax that is collected for the states. 100 per cent of it is shared across all the states. You cannot just take away money from one state in order to give it to another state. That is not the role of the national government. But we do recognise the particular challenges faced by Western Australia and we have responded to them positively. That is our commitment to the state of Western Australia: to continue to work with them to ensure that we can respond in a similar fashion this time round. The expectation, sadly, is that because of the significant drops in iron ore prices the current problem will start to subside. (Time expired)



Senator WANG (Western Australia) (14:32): Mr President, I ask a supplementary question. When I asked the minister about this issue almost 2 years ago in this chamber, he said:

… any changes to our tax system would have to flow from a tax review white paper process …

Minister, what has happened to the comprehensive and strategic tax white paper the government promised? Will you commit to taking a fair GST distribution to the next election, whether or not the government chooses to go to the polls in a double dissolution election to avoid scrutiny of its budget papers?


Senator CORMANN (Western AustraliaMinister for Finance, Deputy Leader of the Government in the Senate and Special Minister of State) (14:32): I thank Senator Wang for that supplementary question. Of course a lot has happened since Senator Wang asked me that question. The government has done a lot of work to improve our tax system. For example, the government got rid of Labor's mining tax, which was very good news for the great state of Western Australia. That helps to strengthen growth, attract investment and generate more jobs in Western Australia. The government got rid of Labor's carbon tax, which is very good news for Western Australia—for families, small businesses and the resources sector in Western Australia. It helps attract investment, it helps generate growth and it helps create more jobs.

As I indicated in my answer to the primary question, the government has provided an additional $500 million investment in infrastructure projects in Western Australia in order to ensure that the WA share of the GST did not drop to the inappropriate 30 per cent that the Commonwealth Grants Commission recommended last year. Our commitment to Western Australia is that we will assess what might be required in a similar fashion this year. (Time expired)


Senator WANG (Western Australia) (14:33): Mr President, I ask a further supplementary question. The big GST revenue recipients, South Australia and Tasmania, are on track to budget surplus soon. Yet WA, as a net GST contributor, is struggling to control its widening deficit. Does the minister realise that every single day that WA is denied its fair share of GST revenue the state's employment and growth prospects deteriorate even further?


Senator CORMANN (Western AustraliaMinister for Finance, Deputy Leader of the Government in the Senate and Special Minister of State) (14:34): Every single day those of us on this side of the chamber are focused on strengthening growth and opportunity in Western Australia and, indeed, right across Australia. Western Australia is responsible for about 45 per cent of our merchandise exports. Western Australia is the ultimate trading state. When we pursue an ambitious free trade agenda by entering into free trade agreements with China, Japan and South Korea, that is particularly good news for the great state of Western Australia. For example, the opportunities for the cattle industry in Western Australia from our free trade agreement with China are enormous. The opportunity right across the services and manufacturing industries in Western Australia out of our various free trade agreements that we have been able to enter are enormous. Of course, Western Australia right now is going through a transition in the same way that Australia is going through an economic transition. Western Australia is facing particular challenges because of what has happened to the price we can attract in global markets for our key commodities. (Time expired)