Labor faces upper house highwire act

Mark McGowan will be strongly tempted to fast-forward plans to reform the Legislative Council if key budget revenue-raising strategies are blocked in the upper house.

The Labor Party has only 13 members on the floor of the 36-member chamber, and needs a further five votes for the passage of its controversial revenue-boosting measures, which are a key part of its budget repair strategy.

The strategy includes the increased royalty on gold, which has the industry up in arms, and a hike in payroll tax designed to hit the big companies rather than small business. These and other measures are tipped to raise an extra $3.5 billion over four years.

The Nationals WA leader, Mia Davies, was first out of the blocks to express her party’s opposition. She claimed the government’s broken election promise not to increase taxes would destroy jobs in regional Western Australia and have little impact on the budget bottom line.

The crossbench parties – One Nation, Shooters Fishers and Farmers, and Liberal Democrats, which have five members in total – joined the Nationals, with four upper house votes, in rejecting the government’s plan. The position of the four Greens could be vital in the final outcome.

The Liberal Party, with nine MLCs, is still deliberating. Treasurer Ben Wyatt sought to turn the heat up on the Liberals, claiming their big-spending ways when in government created the budget problem, and they now need to be part of the solution.

The same applies to the Nationals. But their attitude to the past eight years in government with the Liberals seems to have been all care, no responsibility. They’ll take the accolades but walk away when the tough decisions have to be made.

The issue will play out over the next few weeks, but there is plenty of action behind the scenes. Mr McGowan, Labor’s upper house leader Sue Ellery, and Regional Development Minister Alannah MacTiernan recently held an hour-long meeting with crossbench representatives at Parliament House in an attempt to find common ground.

One Nation leader Colin Tincknell said he urged the government to adopt a softer position on payroll tax for regional employers to help save jobs, and lift the proposed threshold for the increased gold royalty; only then would the small parties consider supporting the measures.

The downside for Messrs McGowan and Wyatt is that a compromise would delay the plan to achieve the elusive trifecta of restoring the budget to surplus, arresting the increase in state debt, and regaining the coveted AAA credit rating.

More such meetings are expected, with the small parties seeking extra resources and also better access to ministers.

The upper house has one luxury that the federal Senate, when it blocks legislation, does not. MLCs have fixed four-year terms, and there is no provision for double dissolutions, as can occur federally. So MLCs can stall legislation with impunity.

This has led to some brinkmanship for previous Labor governments, but nothing to match the events that led to the constitutional crisis in Canberra in 1975 and the sacking of the Whitlam government.

Labor could seek to change that if the MLCs are obstinate. At present, six members are elected from each of six regions – three regions from the metropolitan area and three from country WA. That was the result of a compromise between Labor and the Greens so that Labor could have its one vote, one value policy implemented for the Legislative Assembly in time for the 2008 election.

For many Labor MPs, however, upper house reform remains unfinished business. They believe the current arrangement, under which 1,195,943 metropolitan voters elect 18 members while just 397,279 country voters also elect the same number (nowhere near ‘one vote, one value), is a relic of the past and must be confronted. The issue for them is timing.

But any reform needs support from other parties, and they won’t be rushing to volunteer. The Liberals under Mike Nahan are probably the best prospects, but he would be reluctant to risk alienating support in the bush.

What is undeniable is that the budget challenge was exacerbated by the profligacy of the Liberals and Nationals in government. Spending helps ‘buy’ popularity, even if you have to borrow the money. Taking responsibility to fix the resulting financial mess is much harder.