Main Committee Speech - GST Relativities

Main Committee, August 17 - I rise today to highlight to the house how my home State of Western Australia is being unfairly penalised for its disproportionate contribution to our national economy, through GST.

As Western Australia has grown and prospered, it has proudly contributed more and more to our federal economy.  However, Western Australia has received less and less of the GST pool in return. 

In the last financial year, Western Australia received just 68% of what it would have received if GST revenue were distributed across Australia on an equal per capita basis – this is the lowest relativity applied to any State or Territory since the GST was introduced some 12 years ago.

In contrast, every other State and Territory, received not less than 91% of what it would have received if GST revenue was distributed evenly across Australia.

The future outlook for Western Australia’s GST revenue share is even more dire.  WA Department of Treasury and Finance modelling indicates that by 2014-15, WA will be receiving just one third of the GST it would otherwise be receiving if GST was distributed on a per capita basis.  This would result in WA receiving $4 billion less than its equal per capita share. 

While I am prepared to see Western Australia continue to contribute to the GST distribution to other States and Territories, there has to be some limit to the rip-off.

As such, I have tabled a motion in this Parliament that proposes the introduction of a reasonable 75% floor to GST relativities.  

A 75% floor would preserve the principles of Horizontal Fiscal Equalisation, and would preserve the formula used by the Commonwealth Grants Commission, without unfairly penalising any state for its disproportionate contribution to our national economic prosperity. 

This floor is forecast to add an additional $1.8 billion to WA’s GST grant in 2013-14, and an estimated $2.5 billion the following year. 

To put this in perspective, the savings in 2014-15 alone would be enough to fund the development of our State’s biggest public country hospital development, the “Albany Health Campus”, 14 times over.

As an elected representative of the people of O’Connor, it is my duty to stand up for the rights of my constituents, and I intend to do this by spearheading the move to reverse the GST rip-off of Western Australia. 

The Leader of The Nationals WA, the Hon Brendon Grylls MLA and the WA Premier the Hon Colin Barnett MLA have already indicated their support for establishing a floor on GST relativities. The Opposition Leader in Western Australia the Hon Eric Ripper MLA has also expressed his concerns relating to the GST distribution.

I call on all Western Australian members of this place to properly represent their constituents and properly represent their State by supporting reform to the GST revenue distribution.