There are plenty of political points available when talks about a new GST carve-up get under way.
PRIME Minister Julia Gillard was desperate for a circuit breaker on her recent three-day visit to Western Australia. And you’d have to agree she found it.
The last thing she wanted was to be dogged by questions as to how the planned new mining tax would affect new local projects. On top of that was the strong hint to the states – attention WA – that they should not even think of increasing royalty rates once the new tax comes in.
So the announcement in Perth of a major review of the allocation of the proceeds from the goods and services tax, which Premier Colin Barnett had been seeking, came well and truly out of left field.
It has sparked an unexpected contest between Mr Barnett and the leader of the opposition, Eric Ripper, as to which leader really has the state’s interests at heart.
As noted previously in Political Perspective, the premier has expressed alarm that the state’s share of its goods and services tax contributions has dropped to 68 cents in the dollar, and is expected to decline further, because of strong royalty revenue, especially from iron ore.
He’s conceded that WA needs to help financially weaker states, through the Commonwealth Grants Commission. But a floor of 75 cents in the dollar would be a fairer share, and help introduce financial certainty for future planning. All very reasonable.
Enter Mr Ripper. He supports the Barnett position in principle, but has gone one better. He wants the WA GST refund to be no lower than 90 per cent of the contribution – 15 points more than the premier. In effect, in for a shilling, in for a pound.
It’s a big call, and is unlikely to succeed. But Mr Ripper has created a point of difference with Mr Barnett; and if the prime minister is serious about rebuilding Labor’s disastrously low vote in WA, perhaps she should give it serious attention.
A former head of the WA Treasury, John Langoulant, has welcomed the review as being long overdue. He says the machinery for the redistribution of the GST revenue needs to be simpler and more transparent.
He’s also noted that it is a ‘zero-sum game’. There’s a fixed amount of money to be carved up and if WA is to get a better deal then another state will be worse off. And that is Ms Gillard’s political challenge.
But Mr Langoulant also notes that the terms of reference for the review will be crucial. He says the major emphasis has always been on a state’s revenue-raising capacity. Not enough attention in the past has been paid to the capital side, such as the demands for new infrastructure.
That issue was effectively ignored during the Howard years. If it hadn’t been, the state’s rail and ports network would probably be better placed to handle even more exports.
The message here is that growing states not only generate more revenue, they need major capital works to service the resultant demands.
These include the essentials for industry linked with power and transport, as well as housing, schools, hospitals and other services for an expanding population.
The timetable for the review invites comment. The three-member panel – including former premiers Nick Greiner (Liberal) and John Brumby (Labor) – has been asked to present a draft report next February, and the final report by September.
Then the issues are to be debated before a final decision in the first half of 2013.
That’s roughly when, in the normal course of events, speculation will be rife as to the date of the next federal election.
Presumably WA will get a better deal. But will it be closer to Colin Barnett’s target or Eric Ripper’s ambitious goal?
There will be lots of votes riding on the result.
Move down the car
FULL marks to Transport Minister Troy Buswell for quick action to take some of the heat out of the row over Perth’s crowded peak hour trains.
That he was only able to act after revelations the Public Transport Authority had 12 extra carriages up its sleeve provides a window into the operations of the bureaucracy.
Apparently the carriages were considered surplus to requirements until the opening of the extension of the northern line to Butler in 2014.
But when the public outcry about packed trains on the northern line – and passengers left stranded on stations and being late for work – built up, and amid growing media pressure on Mr Buswell, action was taken.
It’s not the first time bureaucrats have kept their minister in the dark, nor will it be the last.
I recall in Canberra in 1983, commercial television crews started operating with new cameras that eliminated one crewmember and enabled the vision to be processed faster. ABC crews continued with the old gear.
The new communications minister was assured in general briefings that there were no major industrial issues at the ABC, but the industrial relations minister, Ralph Willis, got a different story when he asked why the ABC wasn’t using the new gear.
‘We’ve got the gear but it’s locked up because some of the staff have banned it,” the minister was told by a senior journalist. “They’re trying to work something out but they’re not pushing it to avoid a confrontation.”
The ministerial advice to the bureaucracy was to sort it out, quick smart. It was, and the ABC has kept abreast of the times.
Hopefully the Buswell edict will ease the pressure on the northern line as the latest fuel price surge makes public transport more attractive.
And as a new regular commuter on the strongly patronised Fremantle-Perth line, I can support Mr Buswell’s claim that one of the congestion problems is linked with passengers congregating around the doors.
In the days of conductors, that would have been solved by the request to “move down the car please”.
But of course the conductor’s job was eliminated years ago, in the never-ending quest for improved efficiency.
