Premier Colin Barnett has described relations between Canberra and the states as being at a low point, as the controversy over mining royalties and the GST continues.
Premier Colin Barnett has described relations between Canberra and the states as being at a low point, as the controversy over mining royalties and the GST continues.
Speaking at a business lunch in Perth today, Mr Barnett said federal-state financial relations had often been difficult but were usually constructive.
He praised the Council of Australian Governments (COAG) reform process initiated by former prime minister Kevin Rudd, saying initially it was fun.
However, Mr Rudd "lost the plot" and the COAG process had continued downhill under his successor, Julia Gillard.
"It has degenerated into an unsavoury and unfriendly environment," Mr Barnett told The Australian Deutsche Bank Business Leaders Forum.
Mr Barnett continued to defend the increase in iron ore royalties announced last week, saying it removed an anomaly and was affordable.
He also said it was wrong to call royalties a tax.
"A royalty is not a tax, it's the price at which we well the minerals."
In contrast, he accused the federal government of wanting to give away the country's minerals for a zero price.
That was because, under Canberra's mineral resource rent tax, mining companies would receive a credit to fully offset royalty payments.
Mr Barnett said there was some progress on developing a national curriculum, while national health reform was getting back on track after the failure of earlier efforts that he called "a sham, a contrivance".
Overall, he said a major shift was underway, evidenced by the federal government providing, partly by default, an increasingly small portion of the WA government's funding.
Mr Barnett said the implication was that the Commonwealth government was becoming less relevant financially to WA, and the state was being drawn more and more towards Asia.
"We are not seing only an economic shift in this nation, to the west, to the north, we are also seeing a shift in the political balance in this country.
"I'm not a secessionist, I'm not saying Australia is going to fall apart, but there is an unravelling of Australia's Commonwealth state relations and there is an unravelling of the financial relations that have underpinned the federation.
"So we are seeing changes, they may seem slow and tiny at the moment, but I suspect in 10 or 20 years time, there will be a very different economic, political and financial structure in Australia."