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Tuesday, 23 October 2018
Page: 10711


Mr HART (Bass) (13:22): I would like to make some observations with respect to the member for Forrest's contribution that's just been delivered. Of course, the elephant in the room that she hasn't mentioned is the fact that she's been part of a government that's been in power for over five years. It's taken it over five years to address what's certainly been an urgent issue as far as the Western Australian voting public is concerned. I think it's disingenuous and it's not appropriate for this government to ignore the efforts that have been made on a bipartisan basis to deliver GST equity for WA. It is vitally important for the government to take a moment to reflect, in a positive manner, upon the fact that this has been achieved by co-operation at both a state and a Commonwealth level, and indeed finally to reflect the concerns expressed by all state premiers and all state treasurers with respect to the legislating of a guarantee that no state will be worse off.

With that introduction, I'm pleased to be able to speak in support of the Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018. I'm particularly pleased to rise to support the comments and observations of the shadow Treasurer, the member for McMahon. The history of Commonwealth-state relations, particularly Commonwealth-state financial relations, is long and complex. Sometimes that relationship can be encompassed in throwaway lines. I can't go past, for example, the observation attributed to Paul Keating: 'Never get between a Premier and a bucket of money.'

This legislation is required to address shortcomings in the system of horizontal fiscal equalisation, a system which has evolved since the 1930s and was most recently overhauled with the introduction of the GST in the year 2000. But, in practical terms, the effect of horizontal fiscal equalisation, the distribution of GST and the allocation of grants to states can materially affect the ability of states within our federation to address the provision of services, construction of vital infrastructure and, of course, planning for a secure future for that state.

Western Australia has prosecuted a case—particularly with the sound advocacy of my caucus colleagues from that state—for the present arrangements to be amended to reflect the shortfall in GST derived from economic activity within that state but lost to the state under the current system of horizontal fiscal equalisation. In very real and practical terms, Western Australians have felt that they have not received a fair share of the GST revenue which has been generated within their state.

But it's important to acknowledge that, as a federation, each of the states will, from time to time, as will the territories, prosecute a case for particular recognition as to challenges facing that state or territory. In the case of Western Australia, the simple fact of the matter was that GST revenue generated by the resources boom over an extended period depressed the amount returned to the state to a historic low.

It can also be fairly said that the former Western Australian Liberal state government and its then Treasurer squandered the proceeds of the mining boom with an almost contumacious disregard for the likely effect of the GST distribution formula on future state finances. I say this not to justify the lack of action with respect to addressing the cause of Western Australia receiving a fair share of GST, but rather to emphasise that the present Attorney-General, in his then role as state Treasurer, proceeded on the basis that the GST distribution formula would be adjusted, without in fact prosecuting that case with any particular vigour. That was either, in my submission, recklessness or blind disregard for the financial stability of his state.

My home state of Tasmania is disproportionately reliant on GST revenue. In 2018-19, Tasmania's total general government revenue is expected to be approximately $6.2 billion. Tasmania's largest source of revenue is GST revenue, estimated to be almost $2.5 billion in 2018-19, or approximately 40 per cent of our state's total revenue. This is a larger proportion than for any other jurisdiction except the Northern Territory. Tasmania will receive $1.1 billion more in GST revenue than its population share of $1.4 billion in 2018-19 because of the current distribution under horizontal fiscal equalisation. The current distribution of revenue represents 64 per cent of Tasmania's health expenditure, or 71 per cent of education expenditure, based on 2017-18 figures. These figures demonstrate the seriousness of protecting Tasmania's fair share of the GST.

The backdrop to this threat is the legacy of the Abbott government's cuts to health and education in the 2014 budget, estimated to be $2.1 billion for Tasmania, over 10 years, at the time. Tasmania's health and education systems are already behind the rest of the nation. Saul Eslake's Tasmania report presented data from the ABS National Health Survey conducted in 2014-15, which showed that a lower proportion of Tasmanians assessed their health status as 'excellent' or 'very good', and a higher proportion as 'fair' or 'poor', than of the general population of any other state or territory. Tasmanians are notably more intensive in their use of hospital facilities than people living in other states and territories. Conversely, Tasmanians are, in general, less well educated than people living in other parts of Australia or, indeed, other regional parts of Australia.

Tasmanians' reliance on GST revenue is not the product of fiscal recklessness or incompetence. It is the inevitable consequence of a small state, a federation state, that has been constrained—in some cases, by decisions imposed upon the state by the operation of federal law, in order to constrain particular decisions, including the development and exploitation of resources of the state. Tasmania has a significant proportion of its land mass in reserves. That should ensure that the beauty, heritage value and unique aspects of Tasmania are preserved for future generations. That is a good thing. It is something for all Tasmanians and, indeed, all Australians to be rightly proud of and to celebrate. But this inevitably means that some development, whether appropriate or not, may not proceed and, indeed, should not proceed if there are adverse consequences to the natural heritage of Tasmania.

There are also other factors like the age profile of Tasmanians, their health profile and their lack of educational attainment, which I have referred to previously, which is reflected in significant social disadvantage and which in turn means there are additional demands upon services.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.