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Tuesday, 23 October 2018
Page: 10693

Mr BOWEN (McMahon) (12:01): Labor supports every state and territory getting their fair share of GST, and Labor supports this legislation, the Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018. In fact, we're glad this legislation is being brought in, because we called for this legislation to be brought in. When we announced our position, of making the floor—which will apply to every state and territory, but of course is particularly relevant to the people of Western Australia—we called for this law to be introduced and, as the Leader of the Opposition put it, to make the floor the law.

The now Prime Minister, the then Treasurer, said that that was unnecessary. He said that this legislation wouldn't be needed. And then, a few weeks ago, he backflipped and changed position and announced that this legislation would indeed proceed.

So we very much welcome this legislation. We do think the people of Western Australia in particular—and the people of every state and territory, which I'll come to—deserve the certainty of having this legislation in place to ensure there is a floor in GST distributions.

In fact, we also will support this legislation because the government has backflipped again and accepted another Labor position, which is that the distribution to every state and territory should be guaranteed in this legislation and that no state and territory will be worse off—again, something I called for when the government announced that they would legislate. It was something the Treasurer said was unnecessary and something he said wouldn't happen. He said it would be complicated; he said it would be two systems running in parallel. But, about this time last week, he backflipped and accepted the Labor Party's position.

So of course, we welcome the legislation. We welcome the backflip to have the legislation. And we welcome the backflip to include the guarantee for every state and territory. Accordingly, we will be passing this legislation through this House and the other house without amendment.

I'm not going to detain the House with a long history of GST distributions, and particularly the saga of GST distributions to Western Australia, but I will say this. We have said consistently that the people of Western Australia have a right to be annoyed about the GST distribution. We have said consistently that the people of Western Australia should have a better deal from the GST than they've been getting. It was previously the case that no state or territory had fallen below 86c in terms of relativity—that happened to Victoria not long after the GST was introduced; they hit 86c in the dollar in terms of returns to them—until Western Australia, which got as low as 30c in the dollar in 2015-16 and 2016-17. It's fair to say: this is a matter which causes considerable anger to the people of Western Australia, and they have a right to be angry.

I want to pay tribute to all my West Australian colleagues, as the member for Brand joins us in the chamber, and the other colleagues in the federal parliamentary Labor Party, who have been assiduous in their lobbying of me, of the Leader of the Opposition and of the shadow cabinet, to see this matter fixed. I pay tribute to the Western Australian government, Premier McGowan and Treasurer Wyatt in particular, who have also been leaders on this matter. Of course, there will always be a distribution between states and territories, not a per capita system, and nor should it be and nor, in my view, will it ever be. We are a Commonwealth. We're federation where every citizen is entitled to a basic level of services, and that means distributing funds between states and territories. But it has to be done in a matter which is fair.

Mr Rick Wilson interjecting

Mr BOWEN: This issue arose, in part—and the honourable member opposite, as he walks out, raises Premier Barnett and praises him. Well, Premier Barnett has a lot to answer for, and his succession of treasurers have a lot to answer for, but perhaps none more so than the current Attorney-General, who has two issues to deal with in relation to his role as Treasurer of Western Australia. In 2011, it was he who decided to raise royalties at the state level, not considering perhaps that that would be reflected in the GST distribution and would lead, at least in part, to this imbroglio that both sides of politics have been dealing with since. Perhaps even worse, the then state Treasurer thought he had a magic answer for the GST distribution problem—he thought of it. He assumed it would be fixed. He assumed it could be dealt with. But, worse than that, he built those assumptions into the Western Australian budget. He brought down a budget which was predicated on an assumption that the Commonwealth would improve the GST distribution for Western Australia and then was surprised when it didn't happen. As a result, the state budget of Western Australia was a complete and utter mess. I think that goes to show, perhaps, that the current Attorney-General should never come anywhere near the Commonwealth Treasury portfolio. If that ever happens, the country is going to be in a very big mess indeed. This is a man whose answer to GST distribution was simply to assume that the GST distribution could be fixed.

It has been a long process to get here. In Perth in August 2017, the Leader of the Opposition and I announced the Fair Share for WA Fund, which was to ensure that Western Australia got a fair share without making any state or territory worse off. Now, it's taken until today to get here, and it's through a slightly different mechanism. Of course, when we announced that fund, the then Treasurer—the now Prime Minister—said, 'Top-ups forever is a mug's game.' This legislation reflects top-ups. On this, as in so many matters, the current Prime Minister has adopted a multitude of positions. But, nevertheless, we are very glad we're here today and finally have seen this matter dealt with.

Of course, the government has now accepted a 70c floor and a 75c floor, which was reflected in Labor's policy position for some time. They've now accepted the guarantee for other states and territories, which every single state and territory Treasurer called for, including the Treasurer of Western Australia. When I called for it, the Treasurer and the Prime Minister said that this was an outrage. They said it was an anti-Western-Australian point of view. They said that it was reflective of a lack of commitment to Western Australia. The fact of the matter is: the Treasurer of Western Australia agreed with us that every state and territory should receive that guarantee. The Liberal Treasurer of New South Wales agreed with our position. The Liberal Treasurer of Tasmania agreed with our position. The Liberal Treasurer of South Australia agreed with our position, let alone, of course, the Labor treasurers of Victoria, Queensland, the ACT and the Northern Territory, who, of course, agreed with federal Labor's position. So it is good that the pressure became so much for the Treasurer that he had to agree with our position.

This is the virtue of the policy work that Labor has put into this matter—that we can say the same thing in Perth as we say in Hobart. We can say, as I've said many times at press conferences in Hobart: the people of Western Australia have a legitimate concern. The people of Western Australia have a right to be angry. But the people of Tasmania also have a right to be concerned. I want to spend a few moments on the people of Tasmania, because this is a matter of particular concern to Tasmania. It's a matter of particular concern because Tasmania is so reliant on GST revenue. It is estimated that Tasmania's largest source of revenue is in fact GST revenue. It is estimated to be $2.5 billion in 2018-19, or 40 per cent of that state's total revenue, which is a larger proportion than for any jurisdiction, apart from, obviously, the Northern Territory. Again, there are all sorts of reasons why this is the case, but I mentioned before that we're a Commonwealth. We're a federation where individuals have the right to a basic level of services, and the people of Tasmania are more reliant on GST for those services than any state and any other jurisdiction, apart from the Northern Territory.

To put this in perspective, the current distribution revenue represents 64 per cent of Tasmania's health expenditure or 71 per cent of their education expenditure, based on 2017-18 figures. Again I pay tribute to my Tasmanian colleagues, who have also been assiduous in talking to me about this matter. I completely understand the concerns of Tasmania to ensure that guarantee was written into legislation. The people of Tasmania were in many senses at the forefront of our thoughts as we insisted on that guarantee going into the bill. We absolutely insisted that this bill should include that guarantee. And that is right for the people of Tasmania.

I'm sure my Tasmanian colleagues, in their contributions, will rightly point out that there will be another review in 2026 and that this guarantee only applies for the transition period. They will lay down some long-term concerns for the people of Tasmania, and I share their concerns to ensure that the people of Tasmania have those services going forward. I want to see the Tasmanian economy growing, I want to see Tasmanian sources of revenue, but I also want to see Tasmania's access to those basic services through the GST guaranteed. Of course, we'll continue to work with our Tasmanian colleagues, and, indeed, the Tasmanian government, regardless of its political persuasion, to ensure that that can be the case.

Accordingly, the Labor Party will be happy to facilitate the legislation through both chambers. This debate has gone on for long enough. I've been involved in it; members on this side of the House have been involved it. It has meant that two successive Western Australian governments have had to struggle with it in their different ways. It's time for this debate to come to an end. It is time for this debate to be concluded in a way which is satisfactory to the people of Western Australia and the people of Tasmania. This would not have been expected when the GST was designed. I have no criticism or quarrel with the original system, which I know, Mr Speaker, you were involved in setting up with your then employer, the then Treasurer. You could not have been expected—the Treasurer could not have been expected—to see this situation emerge. This is one of the things about GST distribution which could not have been accurately predicted in 2000. The vagaries of the minerals cycle, the minerals boom, and the Western Australian government putting royalties up in the middle of that would mean that we reached the extreme position that the people of Western Australia received only 30c in the dollar—a position in extremis. But we know about it now and it's got to be fixed now.

Finally, if this legislation receives passage through both houses of parliament, we'll be able to deal with it, to put this issue to bed, and people of every jurisdiction, members of this great Commonwealth of ours, will know that they have a basic access to at least 70c in the first instance and then 75c for every dollar they spend on the GST. This bill does not undermine the principle of fiscal equalisation, but it does make it fairer. Accordingly, we will support its passage through each chamber.