06/05/2015 - 10:28

Abbott provides $500m for WA roads

06/05/2015 - 10:28

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Prime Minister Tony Abbott flew into Perth today to announce $500 million of extra Commonwealth funding for WA roads, while his finance minister Mathias Cormann kept up pressure on the state government to reciprocate by privatising more state-owned assets.

Abbott provides $500m for WA roads
Prime Minister Tony Abbott with Finance Minister Mathias Cormann and Premier Colin Barnett at Main Roads WA office in Perth today. Photo: Attila Csaszar

Prime Minister Tony Abbott flew into Perth today to announce $500 million of extra Commonwealth funding for WA roads, while his finance minister Mathias Cormann kept up pressure on the state government to reciprocate by privatising more state-owned assets.

Mr Abbott said Canberra would provide $499 million towards WA roads projects, including work on the Mitchell Freeway, in response to the state’s issues with the GST revenue carve-up.

Speaking at the Main Roads WA Traffic Operations Centre today, Mr Abbott said he recognised the particular circumstance facing WA at this time.

"Without additional Commonwealth support, there were important road projects of national significance that might have not gone ahead," he said.

"I am conscious of WA’s particular position and it is important for a Commonwealth to respond in its time of need."

He said the decision was what a sensible federal government did, in recognition of particular difficulties that individual states from time to time might find themselves in.

“Because of changes to the iron ore royalty stream and because of changes to the GST, these are sensible government-to-government arrangements," he said.

Other states have said WA shouldn't get extra money until it undertakes economic reform, but Mr Abbott said the state faced revenue issues never before seen by any state and has, in many respects, led the country on fundamental economic reform.

Of the contribution provided by the commonwealth, $209 million will go towards work on the Mitchell Freeway between Burns Beach Road and Hester Avenue, while $84 million will be provided for grade separations on Tonkin Highway.

There will be a total of nine projects to receive funding assistance, including a $67 million allocation for grade separation on Roe Highway/Berkshire Road.

Premier Colin Barnett said the state's share of GST, which had fallen down to a level of 38 cents in the dollar, had never happened before in Australian federation.

“I have been complaining about that for several years, and finally a prime minister has listened and acted," Mr Barnett said.

He said the federal assistance meant that WA would stay at 38 cents on the dollar, although the state’s share would fall next year to 30 cents.

“It helps us get through a very difficult period as a state,” Mr Barnett said.

WA opposition leader Mark McGowan said the additional money didn't fix the long-term GST problem facing the state.

"The (original GST) deal was shocking, it should have never have been signed in the way it was - Colin Barnett was part of that," Mr McGowan told ABC radio.

Curtin University professor of sustainability Peter Newman said the federal government was wasting the cash injection on the wrong projects.

"It's raining road projects while the MAX Light Rail project dies and the rail projects outlined in the Perth@3.5m plan are being put off until 2050," he said.

Finance minister Mathias Cormann said he had encouraged the WA government to pursue further micro-economic reforms.

"These should include progressing further privatisations, including in relation to ports, the TAB and poles and wires; the abolition of the Potato Marketing Corporation; and further deregulation of trading hours," he said.

He said asset sales would enable Western Australia to access further federal incentive payments.

Senator Cormann told ABC radio he was pushing for faster change in WA.

"The treasurer and I are both on the public record as saying that we would like to see the Western Australian State Government be a bit more ambitious and have a bit more of a sense of urgency when it comes to pursuing microeconomic reform," he said.

"On the basis of the conversation that I’ve been having with Mike Nahan, I’m very confident that there will be some further progress in coming weeks and that will be good for the Western Australian economy and it will be good for the national economy."

Mr Barnett said today major utilities would remain in public hands, although parts of them were under consideration for sale.

He also said getting the sale of betting agency TAB through parliament was going to prove troublesome.

“I and other ministers are spending a lot of time talking with the racing industry,” he said.

“This is the opportunity to modernise the industry. People don’t go to the races because they don’t find it attractive anymore.

“The industry can’t ignore that issue.”

Tony Abbott with Mathias Cormann and a transport worker. Photo: Attila Csaszar

Mr Barnett said he still believed the previously announced $4 billion to $6 billion asset and land sales target was realistic.

Senator Cormann said the state would be able to access significant federal incentive payments towards further investment in job-creating economic infrastructure, when re-investing the proceeds of any privatisations into such infrastructure projects.

In late April, the state government announced its decision to abolish the potato industry regulator, the Potato Marketing Corporation, after the 2017 election, but said it was willing to consider changes to eliminate some of the most controversial legislation governing their trade.

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