21/03/2017 - 06:20

Grylls’ courage not enough

21/03/2017 - 06:20


Save articles for future reference.

OPINION: There is no denying that Brendon Grylls has left his mark on Western Australian politics.

Grylls’ courage not enough
No-one can accuse Brendon Grylls of failing to stand up for his beliefs.

OPINION: There is no denying that Brendon Grylls has left his mark on Western Australian politics.

First and foremost, he is a courageous politician. At the 2013 election, Mr Grylls stood down from his safe seat in the Wheatbelt to run for the Labor-held seat of Pilbara so the Nationals WA could extend their footprint and increase their influence in the coalition.

It was brave and visionary move, but one that was rendered irrelevant by the Barnett landslide victory that year.

Mr Grylls’ other courageous act was to campaign for an increase in the lease rental payments from the major iron ore mining companies. However, that led to the Nationals losing both their resources-based seats of Pilbara and Kalgoorlie in the 2017 election.

Despite these setbacks, Mr Grylls’ strategy to extend the Nationals’ heartland from agricultural regions to resources regions remains compelling, because it provides a means for the party to grow rather than be anchored to a declining agricultural base.

The Royalties for Regions program, which underpinned the strategy, was political genius. It had clear branding and appealed directly to the Nationals’ target voter base.

There was, however, a major problem with it.

Putting aside issues around the allocation of funds, whereby some councils were gifted community assets they could not afford to run or maintain, the timing of the policy was wrong.

Royalties for Regions was implemented as population growth in Perth was increasing. Even the Nationals, when explaining the size of the debt run up by the state government, pointed to WA’s growing population and the need to fund more teachers, policemen and nurses, and more public infrastructure.

So while billions of dollars were being spent meeting the needs of the growing population in Perth, billions of dollars of revenue was being diverted to building facilities in country towns under Royalties for Regions.

The excessive size of the government’s debt, which became a major 2017 election issue, is in part a result of the deal the Liberals did with the Nationals on Royalties for Regions to form government.

Net government debt is currently forecast to reach $40 billion in 2020, with forecasts suggesting $10 billion (a quarter of the net debt) will have been spent on Royalties for Regions.

If Royalties for Regions had not been implemented, net debt would currently be running at $26 billion and forecast to peak at $30 billion. Take away $8 billion for Western Power’s debt and $6 billion for the Water Corporation’s debt, and the residual net debt is starting to look quite modest.

It could be said that the scheme that made the Barnett government contributed to its destruction.

Mr Grylls’ other major policy initiative did not get off the ground. The proposal to increase the lease rental payments by the two major iron ore companies from 25 cents per tonne to $5/tonne met resistance from every quarter.

The Nationals presented the proposal as a means to fill the GST hole, when they should have argued the bigger picture. WA has more mineral, oil and gas resources that almost any place in the world, yet our standard of living is no higher than anywhere else in Australia, including states with no resource base.

It’s not a result of GST theft. WA has only recently moved from being a long-term recipient of GST receipts from other states to being a contributor to the other states.

It’s because government after government has been content to allow companies to extract and sell this state’s resources for a small royalty and the employment that comes will resource extraction.

It is the kind of arrangement that a colony in a 19th century empire might have had imposed upon it, along with assurances about the trickle-down effect, while the riches are exported to other countries.

Mr Grylls is the first politician to try to do something about it. His message was that it was clear to anyone who cared to look that the major resource companies had not contributed enough to this state.

However, the message didn’t get through.

When the Nationals review their election performance, they should think very hard about how they presented this policy and whether they should stick with it. If they keep it, they will have to work out how to sell the idea to mining communities in the seats they need to win back.

At the very least it is a point of difference from the other parties, and one that resonates with many of their target voters. More important, it is an idea whose time has not yet come, but that might change at the next election.

As things stand, Brendon Grylls’ legacy is a Royalties for Regions program that is diverting money from the metropolitan area where it is most needed. The program, however, faces an uncertain future under Labor and it might be discontinued as a cost cutting and debt reduction measure.

Longer term, if the Nationals stick with his proposal to increase the contributions to this state by the major resource companies, at some point they will be able to make its implementation a condition of forming a coalition government, as Brendon Grylls did with Royalties for Regions.


That would have a very positive impact on this state and it would be a truly great legacy.

• Simon Withers is a former investment banker.


Subscription Options