Treasurer Jim Chalmers cools Labor MPs’ nerves, vows WA will always get ‘fair share’ of GST

Jim Chalmers has moved to placate nervous Labor MPs in Western Australia with a rushed assurance that the resources State will always get its “fair share” of GST. The Treasurer’s vow that Federal Labor were “big, enthusiastic backers” of the State came after his decision to broaden the scope of a review into the funding deal caused disquiet in the west. The year-long investigation will examine the 2018 deal under Scott Morrison which secured a 75-cent floor in GST revenue, which is projected to funnel WA an extra $60 billion in tax revenue over a decade. But the terms of reference released on Wednesday for the Productivity Commission’s probe gives it the opportunity to come up with alternatives arrangements. WA Treasurer Rita Saffioti said the State Government was already readying its arsenal to “fight”, including tallying top business leaders prepared to back their pitch to the east. “We’re not considering any changes to the GST deal with WA and I’ve been clear about that repeatedly,” Mr Chalmers told The West Australian. “We are big and enthusiastic backers of Western Australia. “The people and businesses of this State make a really big and important contribution to our national economy. The West will always get its fair share of Federal funding under Labor, and we’ll make sure of it.” Federal Labor have romped-in the WA vote at the last two elections on repeated promise they would protect WA’s fair share of the GST. Anthony Albanese even went as far to sign a reporter’s arm with the assurance while in Perth in February last year and facing questioning about whether he’d give a water-tight guarantee. Labor now hold 11 of the State’s 16 Federal seats — a whopping increase from the 2013 poll when Coalition held 12 of the then-15 WA electorates. Both Mr Chalmers and a string of WA Labor MPs contacted by The West on Thursday reiterated the review was routine and legislated by the Morrison Government. Perth MP Patrick Gorman — Assistant Minister to Anthony Albanese — was among those that gave assurances. “I have said before that the WA GST deal is rock solid. I will say it again, the WA GST deal is rock solid,” he said. “We have been very clear on a number of occasions that it is the Australian Government sets policy, not the Productivity Commission.” Veterans’ Affairs Minister and Burt MP Matt Keogh repeated the guarantee: “We back the WA GST deal. This is a routine review that is legislated by the previous government, there’s no plan to change current GST arrangements.” Fellow WA frontbencher and Resources Minister Madeleine King told ABC on Wednesday: “The Government has committed to maintaining Western Australia’s fair share of the GST, and that will remain the case, absolutely”. Pearce MP Tracey Roberts echoed “WA’s GST deal is rock solid” while Swan MP Zaneta Mascarenhas assured it was “iron clad”. The State’s newest Bullwinkel MP Trish Cook said she was “proud” to continue Labor’s commitment to protect WA’s fair share. “Everybody knows that WA is the engine room of the national economy, and Labor will always ensure WA gets its fair share,” she said. “The Prime Minister and Treasurer have been very clear — there won’t be changes to the current arrangements where WA gets our fair share.” Hasluck MP Tania Lawrence added: “WA’s GST deal is not up for grabs.” Premier Roger Cook even chimed into the intensifying debate from his trade mission in Japan — expressed trust in the Albanese Government’s “repeated assurances that our GST deal is rock solid”. “However, there is no doubt that other States are eyeing off our share,” Mr Cook said. “That’s why my Government will continue to advocate that our GST deal remains unchanged, and to highlight how important it is in funding the economic infrastructure that Western Australia needs to drive the national economy.” However, shadow treasurer Ted O’Brien expressed scepticism that the Federal Labor will refrain from exploiting the deal to aid fiscal mismanagement. Mr O’Brien accused Labor of breaching the faith of WA voters so soon after they returned Mr Albanese to The Lodge at the May 3 federal election. “Just four months ago, Jim Chalmers said reopening the GST deal was off limits. Now he’s launched a process to do just that,” Mr O’Brien said. “The good people of WA are right to be concerned this Government is coming after them to pay for its spending spree. Time and again, this Government has shown it can’t be trusted to deliver on its promises.” Despite the floor to increase WA’s share after it had fallen below 30 cents of every dollar — the State continues to receive the lowest proportion of GST compared to its own-source revenue. Mr Chalmers said the review was routine and the Productivity Commission would “do its job independently”. So standard according to Labor — that their Assistant Minister on Productivity Andrew Leigh labelled it “about as dull and process as you can imagine” in Sky News interview on Thursday. The final report must be presented to Dr Chalmers by the end of next year. Initial submissions will close on February 27 with an interim report due by August 28. Australian economist and well-known critic of WA’s deal Saul Eslake said it had become the biggest drain in the Federal Budget with exception of the NDIS. He labelled it “the worst public policy decision” after blowing out from a projected $9b cost over eight years to $60b in just over a decade. And if the iron ore price continues to outperform expectations the blowout could extend. Mr Eslake credited the Treasurer for broadening the scope of the review beyond what was legislated, adding he could see how the Productivity Commission couldn’t recommend another system. “He has given the Productivity Commission, the opportunity to come up with a system of achieving that goal in a simpler, more transparent and more easily predictable for state treasuries,” Mr Eslake told Sky News on Thursday. Mr Eslake’s continuous commentary in east coast newspapers could soon be accompanied by WA Government adverts as part of a PR blitz Ms Saffioti is hoping will change the minds of critics she claims are ill-informed about “WA’s story”. Ms Saffitoi also has a team of GST “fairness fighters” assembled in the Government to lobby the east, which is lead by former under treasurer Michael Barnes. It’s expected the former high-profile guard who helped WA’s case for a GST floor back in 2018 will aid the State’s case — including mining magnate Andrew “Twiggy” Forrest, prominent Perth businessman John Poynton, developer Nigel Satterley, and ex-Wesfarmers chair Michael Chaney. Ms Saffioti has also name-checked the resources sector’s peak body Chamber of Minerals and Energy WA among sector support. CME policy director Anita Logiudice echoed Ms Saffioti’s call that a successful State shouldn’t be penalised for helping prop up the economy. “The GST system should incentivise States and Territories to grow their economies and develop the resources at their disposal,” she said. “Returning to a distribution that punishes economic growth would fly in the face of both logic and the Federal Government’s pursuit of productivity.” Labor’s remaining Federal members in the west — Tangney MP Sam Lim, Moore MP Tom French, Curtin MP and new frontbencher Anne Aly and Fremantle MP Josh Wilson — are yet to declare their support after the release of the terms of reference.