28/08/2017 - 14:03

Forced out with its own money

28/08/2017 - 14:03

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OPINION: Held hostage by an inequitable GST allocation system, WA risks losing its national place in the sport of rugby where the financial field is far from level.

Forced out with its own money
Western Force supporters turned out in their thousands on August 20 to protest the ARU decision.

The Western Force’s struggle for survival and the GST debate have a lot in common.

It seems Melbourne has outbid Perth in terms of hosting a professional rugby union side because the Victorian government has splashed some cash to win over the Australian Rugby Union.

And where does that money – a reported $20 million – come from? It could easily be argued that it is from the GST, where Victoria enjoys hundreds of millions of resources-derived funds at Western Australia’s expense while it refuses to extract wealth such as gas from its own jurisdiction.

Victoria has, so far, kept the Melbourne Rebels by promising a development centre and rectangular fields for junior teams built in conjunction with La Trobe University, among other things.

The greater irony is WA’s government has already spent way more than this on rugby, even without the GST funds being returned to this state. It spent $10 million on rugby’s headquarters near Perry Lakes and $95 million on expanding nib Stadium for the benefit of rugby and soccer.

Perhaps our state government ought to have received some guarantee from the ARU before spending that money. Imagine being gazumped by another state, which not only spends your money, but spends less.

This is not the first time and it won’t be the last that WA’s massive one-way contribution to the GST pot of gold is used to poach business from here.

Quickstep Holdings is a good example. In 2011, the company agreed to leave WA to establish a large-scale manufacturing operation at Bankstown, in south-western Sydney, which could create up to 400 jobs. While the trigger for the move was access to an existing workforce with the specialist skill sets, there was also a big accommodation deal from the NSW government.

Similarly, in late 2015, One Atmosphere was lured from Perth by the Tasmanian government, which provided all sorts of financial incentives for the business to relocate the manufacturing of its buoyancy systems for challenging marine environments (including emergency events).

Perth doesn’t do high tech? Well obviously, not if every other state has an incentive to poach them; and we pay for it.

I could add that Victoria spends millions on luring foreign students to its campuses, a business once dominated by WA. How do they afford to do that?

It is time that state and federal governments called for a fair go. If a state needs a helping hand then fair enough, but using Commonwealth funds to steal business from other states is well and truly against the spirit of why the Commonwealth Grants System was established in the first place.

Ever-needy Victoria has spent the past two decades building up an envied position as the national leader in sports and events. Surely that boost to its economy must start paying dividends so it can pay its own way.

Stalin once said: “We will hang the capitalists with the rope that they sell us”. It didn’t exactly work out that way, but it took more than a half a century and a costly Cold War to prove him wrong. Perhaps we ought to stop funding the theft of enterprises, industries and major events before we have nothing left.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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