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Tuesday, 23 October 2018
Page: 10773


Dr ALY (Cowan) (17:26): I've often stood up in this place just to remind the House that 'WA' does not stand for 'wait a while', so it's great to see that the government is finally listening. Four weeks ago, the mighty, mighty Eagles won the grand final—against some team from Victoria that nobody's ever heard of! Those around me know that I'm not a huge fan of football. In fact, I'm not a fan of any kind of 'sports ball'. I do find it difficult to coordinate blue and yellow into a stylish outfit! But I am a proud Western Australian, a very proud Western Australian. Just as the grand final cup was brought home to WA by the Eagles, the GST is now on its way home to WA. Every Western Australian member in this House and, possibly, also in the Senate is going to claim some kind of credit for this momentous occasion. Indeed, every one of the Western Australian members of the coalition will crow about how great they are and pat themselves on the back for this. But let's not forget just how we got to this point.

Labor support the introduction of the GST bill, and we support the introduction of the bill because it brings the government into line with what Labor have been advocating for some years now regarding the GST. The government has followed Labor's lead at every stage of this process. Bill Shorten first introduced a floor for WA—

The DEPUTY SPEAKER ( Mr Howarth ): Order! Please use the correct titles.

Dr ALY: Sorry, Mr Deputy Speaker. The Leader of the Opposition introduced a floor for Western Australia; the government followed our lead. Labor said that the GST floor should be legislated. The government first dismissed this and then adopted the exact same position. Labor committed to ensuring that no state was worse off. The government scoffed at that and then, again, adopted the exact same position.

The reality is that Labor has been leading on this issue of GST distribution for years. It was Labor that announced the Fair Share for WA Fund in August 2017, an announcement that made the Liberal Party take seriously the concerns in Western Australia about GST distribution, even though at the time they had a lot of criticisms about that solution. In fact, the then Treasurer, who is now Prime Minister, said, 'Top-ups forever is a mug's game.' It was Labor that committed to legislating for a 70c floor in July of this year, July 2018, and again this government ridiculed it. The former Prime Minister, Mr Turnbull, first raised the prospect of a GST floor two years ago, but we saw nothing. Western Australians saw nothing—after he came to WA and promised it. If the coalition had introduced a floor back then, when the previous Prime Minister said he would or committed to it, WA would have been $3.5 billion better off by now—$3.5 billion—and I know that all of those in Western Australia know exactly what a difference that would've made to our state.

Now the government has accepted a legislated floor and top-ups—showing, of course, that Labor had it right all along, despite their opposition to and criticism of the various measures that Labor has proposed over the years. When Labor and state and territory treasurers unanimously called for a guarantee within this legislation so that no state or territory would be worse off, this government said there didn't need to be one. And now, guess what? There's a guarantee within the legislation.

So this bill finally legislates the government response to the Productivity Commission's report into horizontal fiscal equalisation—that's a bit of a mouthful, I must say. It will change the model of equalisation, meaning that it will no longer be measured against the strongest state or territory but the stronger of either New South Wales or Victoria. A 70c floor—which Labor has been calling for, all this time—is proposed for all states and territories, for the year 2022-23 and 2023-24, followed by a floor of 75c for all states and territories for 2024-25 and beyond.

The bill also provides a mechanism for the Commonwealth to provide an additional top-up to the GST pool in perpetuity. On top of this, it contains a legislated guarantee that no state or territory will be worse off. This guarantee is cumulative, meaning that, if a state or territory's entitlement over the transition period from '21-22 to '26-27 is less than what they would have received, the guarantee will then activate. Labor support this part of the bill, but we do have some concerns and reservations. The first of those is that the guarantee is for the transition period only. So the question is: what happens beyond then? What happens if a state or territory is worse off after the transition period? The answer to that is unclear. Would this result in a future Liberal government making cuts to schools and hospitals, as they've done before?

The bill requires also that there be a review by the Productivity Commission as to whether the changes are operating effectively, efficiently and as intended, and as to the fiscal implications for each state and territory as a result of this legislation. Labor has no issues with this review. But it is worth noting—and this is a very important point, I might say—that the last time the government initiated a Productivity Commission review into the GST, it rejected the commission's findings, and rightly so, given that the commission's preferred model would have been unacceptable.

The bill has been referred to a short Senate inquiry, which is to report by 8 November this year. This review will enable the states and territories to make submissions. In Labor, we will be awaiting the outcome of this review to ensure that we're listening to all Australians on how this legislation will affect them.

Overall, though, it is good to see the government finally following in Labor's footsteps and recognising that the current GST system results in an unfair deal for states like Western Australia. Of course, WA is predominantly the state to gain most out of this, but it is also the state that has suffered immeasurably over the last few years, receiving only 30c in the dollar of GST.

Labor takes the needs and concerns of Western Australians seriously. The WA state government is cleaning up the financial disaster that they were left with when the Barnett government left WA's state government. The Leader of the Opposition has visited Western Australia so many times that I have lost count. He's taken his obligatory selfie with a quokka, which makes him an honorary Western Australian! He has visited much more than either the previous Prime Minister or the current Prime Minister.

We know that WA needs leadership on the GST. Labor has led this government all the way to this legislation. It's great that they're following Labor's lead. It's important to also note the unique position that WA is in. No other state or territory has had its GST share fall below 86c, but WA's share of GST fell to 30c in 2015-16 and in 2016-17. It's heartening to see that the government is finally taking action to ensure that WA is no longer suffering the after-effects of the disastrous Barnett government. In comments made after the government made its about face, the New South Wales Treasurer said:

WA (is) being rewarded for poor financial management.

That was referring to the Barnett government's failure to manage the rewards of the mining boom.

These comments are an indictment of the Barnett government's management of the WA economy. They are also, and perhaps more importantly, an indictment on the role of the then Treasurer of WA, who in early 2011 decided to raise royalties in an attempt to force a change to the GST distribution so that they could keep most of the money. That then Treasurer is now the Attorney-General of Australia, the member for Pearce, who left WA high and dry for the federal parliament. The Attorney-General might be interested to know that the failures of his then WA government have delivered hard times on the people of Western Australia, including in my electorate of Cowan and no doubt also in his electorate of Pearce.

After a record boom, Western Australians were right to expect that their government would not squander it away on their pet projects. They were right to expect that their government would make sure that the state was resilient to the effects of a downturn in the mining and construction industry, like we are seeing now. Instead, Western Australia has no buffer to show for the boom. In my electorate of Cowan, I hear every day from people who are doing it tough in the face of the recession of the mining and construction boom. These are people who are qualified professionals, such as engineers, who can no longer find work because the work just isn't there. Ensuring that the GST system works well for all states and territories, especially my home state of Western Australia, is key to ensuring that those people can prosper again, despite the missed opportunity of the mining boom.

In closing, I just want to reiterate that this side of the House will always speak for the people of Western Australia. We have shown that in advocating for a GST system that works for Western Australia but that also leaves no other state or territory worse off. We've shown that we advocate not just for Western Australians but for all Australians in proposing top-ups where they're needed and in proposing a legislated floor. Labor has led this government all the way to this legislation, and I'm sure that we will continue to do so.