Grylls fights for regions fund

Gareth Parker State Political EditorThe West Australian

Nationals WA leader Brendon Grylls has vowed to defend Royalties for Regions to his "last political breath" but acknowledges changes may have to be made as the Barnett Government tries to win back the State's AAA credit rating.

But he has ruled out any changes to the program's legislation, which has 25 cents in every dollar of projected mining royalties each year directed into the fund.

With the State Budget increasingly reliant on mining royalties as they displace the GST as a major revenue source, appropriations to the Royalties for Regions fund have grown much more quickly than the State's revenue.

When he developed the policy, Mr Grylls envisaged a program that would deliver about $500 million a year to a regional development fund but because of the mining boom, appropriations to Royalties for Regions are expected to total $1.5 billion in 2013-14.

In September 2008, with Mr Grylls still negotiating with Alan Carpenter and Colin Barnett about which party the Nationals would join to form Government, Under-Treasurer Tim Marney warned the Royalties for Regions policy could put the State's AAA credit rating at risk unless there were offsetting savings in the Budget.

At the time, Mr Grylls said: "We understand this project only has longevity if it's financially responsible."

Treasurer Troy Buswell's State Budget in August shifted the mix of Royalties for Regions spending away from infrastructure and towards recurrent services.

"I think you saw in this Budget we already started to make some (corrective) decisions," Mr Grylls told The West Australian.

"I sit on the economic and expenditure review committee. Royalties for Regions is an important program. We will defend it to our last political breath. But we also participate in, and help deliver, the objectives of Government."

Asked how flexible he was prepared to be, Mr Grylls said: "Well, I'm not about to change the legislation."

Mr Buswell said he had not considered changing the legislation but the process of adjustment was "ongoing".

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