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Wednesday, 26 March 2014
Page: 3238


Mr PORTER (Pearce) (15:58): This motion, as was last week's, is all about a reference to the impending Senate legislation that Western Australia will face alone. Poor old WA—I understand that when you win a lottery, not that I have ever had that pleasant experience, you find all of these estranged relatives coming out of the woodwork and being your best mate. That is pretty much how Western Australians feel at the moment, because every conceivable minor party is all of a sudden the best friend of the state.

Labor are having their crack as well, and I will say this for Labor: they are much improved from last week's effort of pretending to be the best friend of the state of Western Australia. In last week's motion on WA, they could not manage to rustle up a single speaker from Western Australia; in fact, with all of the speakers and all the time they had, they only managed to mention Western Australia twice. Maybe it is just me but I think, 'If you're going to try to move a motion that pretends you're the best friend of a state before an impending Senate election, you might want to at least find a Western Australian or, in the absence of one, try and mention the state perhaps more than twice.' It is much improved, best improved performance on-ground: we did actually find a Western Australian this week. Unfortunately, she forgot about it and was late turning up for the motion. Nevertheless, it is a significantly improved effort from last week.

I want to sum up what I think, from my brief political experience, is emblematic of the attitude of Labor to Western Australia. It goes back to a story in 2011 when I had the great privilege of delivering a budget as state Treasurer for Western Australia. I increased a tax, or, as I indicated at the time, I removed a concession that existed on a tax, which is a much more pleasant way of putting it than 'increasing a tax'. I will admit that when I was at university I thought all tax was theft, but I took a slightly different view when I became the Treasurer of Western Australia. It is a necessary part of any economy. This was a tax that applied to iron ore royalties. There was a longstanding 40-year discount that had been offered to a type of iron ore called fines iron ore. The rate on fines iron ore was 5.625 per cent and the rate on lump iron ore was 7.5 per cent. They are as they sound: their ferrous content is essentially the same but lump iron ore is lumpy while fines iron ore is more like a powdery substance. Traditionally the reason one was valued more highly than the other was that smelting mills in China and Asia and elsewhere were geared up for lump ore. That had changed over a 40-year period and fines was just as valuable, but this discount remained.

We removed the discount. We thought we gave Labor proper notice of the fact that that was an impending move. It was a logical, common-sense move and removing the discount brought in over the four out-years of the budget $2 billion worth of much-needed revenue to the state of Western Australia. There is much complaint in WA, of course, and I have been part of that complaint, about the distributive system of GST. But as the Commonwealth Grants Commission operates, that removal on that fines iron ore could have been treated as either a low-royalty mineral or a high-royalty mineral. This is one of those bizarre complexities of the Commonwealth Grants Commission. If the removal of the discount on fines were treated as a low-royalty mineral then, over the longer sweep past the out-years, WA probably would have lost in the diminished GST receipts about 60 to 65 per cent of that $2 billion worth of revenue. That would have been shared with our brethren from the other states and would have built hospitals in South Australia and other structures in Tasmania. If it were categorised in the high-royalty mineral rate, WA would have lost in excess of the total amount raised; it would have lost more than the $2 billion that was raised in revenue. I think that points out that one of the difficulties with the Commonwealth Grants Commission is that if WA had thought that would happen then what incentive would there have been to remove the discount, raise $2 billion and share 65 per cent of it with the rest of Australia? What a bizarre system.

In any event, the then Treasurer, the member for Lilley, made public statements that he would ensure that no direction was given to the grants commission, which would have the effect of ensuring that that change would be counted as a high-value royalty mineral and that WA would lose all $2 billion. In addition, both the then Prime Minister, Julia Gillard, and the then Treasurer, the member for Lilley, of federal Labor, indicated that because of the move they may withhold hundreds of millions of dollars worth of infrastructure funding that had been earmarked for the state. So, the new best friend of the state today, not that long ago—when there was a legitimate increase in royalty rates to earn revenue for both the state and the rest of the nation—threatened to direct that all of those be taken back from the state and that previously earmarked funding to the tune of hundreds of millions of dollars be withheld from the state. So when we hear the member for Perth and the member for Fremantle get up with what looks like a straight face and try to pretend that Labor is all of a sudden, on the eve of a Senate election, a great friend of the state that it imposed a mining tax on, that it imposed a carbon tax on and that it extraordinarily directly threatened to remove revenue from previously earmarked, I think that is unbelievable.