Joe Spagnolo: WA battle begins to save our GST deal

OK WA foot soldiers, it’s time to fight. On behalf of all West Australians, I would like to give this message to all WA’s Federal politicians: We expect each and every one of you to fight like hell in Canberra to keep the GST deal. The threat from those Muppets in the east is very real, as they argue that the GST deal in 2018 that finally delivered WA a fairer slice of the multibillion-dollar national GST pie should be reviewed — and scrapped. “Hopefully, the Treasurer has today opened the door to reversing the worst public policy decision of the 21st century thus far,” economist Saul Eslake squeaked to media in the Eastern States this week. Eslake was reacting to Jim Chalmers firing the starters’ gun on the long-anticipated review of the deal that delivered WA no less than 75¢ for every dollar of the tax sent to Canberra from the west. Chalmers released the terms of reference for a Productivity Commission inquiry into the changes made by his Liberal predecessors seven years ago. “The PC will investigate whether the current arrangements are working efficiently, effectively and as intended, while being cognisant of the Commonwealth’s policy commitments in relation to GST distribution and with terms of reference that are deliberately broad enough to enable it to look into issues raised by States and Territories,” Chalmers said this week. So, why are Eslake and Co whining so much about the 2018 GST deal? Before this deal, WA was being completely and utterly shafted. While other States and Territories (who don’t have an entrepreneurial bone among them) enjoyed squillions in GST receipts, WA was receiving less than 30¢ for every GST dollar it sent to Canberra. And this was largely due to the fact that WA and its entrepreneurs had developed the State’s vast iron ore deposits, which delivered billions in royalties for WA governments. But in the years Colin Barnett was premier, not only was WA being dudded on GST receipts, but iron ore royalty royalties were also down because of global prices. Successive WA treasurers, starting with Eric Ripper in 2007, began arguing that WA should be getting a fairer slice of the huge national GST pie. At one stage, our GST take went below 30¢. Reading the political tea leaves in 2018, then PM Scott Morrison decided he needed to fix the situation in WA before the 2019 election. Along with the 75c floor for WA, the legislation also ensured States and Territories would not be disadvantaged by the new deal, with the Commonwealth each year topping up GST takes to the tune of billions. Originally anticipated to cost taxpayers about $2.3 billion over four years, this is now on track to slug us in excess of $60 billion by 2029. But why should WA be penalised because it has invested billions in developing its iron ore deposits and other minerals? So far, Prime Minister Anthony Albanese and Chalmers have made the right noises about not changing WA’s GST deal. But the fear is that the Commonwealth will find other ways of clawing back billions paid to other States in GST compensation by cutting back on infrastructure spending and the like in WA. And this is where we need the State’s Federal Cabinet ministers Madeleine King and Anne Aly, and assistant ministers Patrick Gorman, Matt Keogh and Josh Wilson, to fight like hell for WA. When approached by the media, our WA pollies make the right noises about protecting their State’s GST take. But we need them to fight for the west in party room meetings, in Cabinet, in the corridors of the Parliament and in the parliamentary chambers. Our Federal politicians would not be in the positions they are in were it not for the voters of WA. They must remember that as our GST fight begins.