Talk tough on Royalties for Regions

Gareth Parker State Political EditorThe West Australian
Terry Redman.
Camera IconTerry Redman. Credit: Danella Bevis/The West Australian

Royalties for Regions scheme should be abolished or overhauled, trading hours restrictions axed and the taxi industry deregulated under recommendations in a landmark report on WA's economy.

The Economic Regulation Authority's inquiry into microeconomic reform also advocates sweeping reforms of the State's taxation system, widespread reduction of State Government red tape and much more rigorous analysis of infrastructure spending decisions before governments commit to projects.

The ERA says the Potato Marketing Board should be axed and the domestic gas reservation policy, which mandates that 15 per cent of a project's LNG production be set aside for the local WA market, should also go.

Many of the ERA's recommendations in the 356-page draft released yesterday are politically contentious. Treasurer Mike Nahan said the Government would not scrap Royalties for Regions or the gas reservation policy.

Nationals leader Terry Redman dismissed outright abolishing Royalties for Regions and said there were "no-go zones" including taxation reform, which would be difficult given the State's Budget challenges, and a recommendation to abolish the Keystart low income housing loan scheme. Opposition Leader Mark McGowan, who went to the last election with a policy to axe the potato board, said it would be a mistake to scrap the gas reservation policy because it would send a "bad signal" about the importance of local needs.

He also ruled out axing Royalties for Regions but said Labor would spend it more wisely.

The ERA calls for a trial of congestion charges for city roads and advocates the sale of government enterprises including Western Power, Synergy, the Water Corporation and Fremantle Ports.

The ERA estimates the benefits of the changes could be worth nearly $600 million a year, or $234 for every WA resident.

ERA chairman Lyndon Rowe said the watchdog was not saying money should not be spent in the regions, but there were perverse incentives in the legislation to "get the money out the door".

"Given limited resources, all of those projects, whether they are in the regions or in the metropolitan area, need to go through a proper process," he said.

"It is increasingly apparent that we cannot rely upon continuing strong economic growth from our natural wealth to raise our living standards. Therefore productivity will have to come from reforms that address hidden waste in our economy and remove unnecessary burdens on business and consumers."

The ERA's inquiry was commissioned by former treasurer Troy Buswell and the final report is due in June.

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