05/08/2010 - 00:00

Mine tax funds for Perth Gateway

05/08/2010 - 00:00

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While Colin Barnett is pleased with federal Labor’s $480 million commitment to the Perth Gateway Project, he remains opposed to the tax that will be levied to provide the funds.

Mine tax funds for Perth Gateway

ONE positive result from this federal election campaign will be that the frequent traffic snarls around Perth Airport will be tackled, whichever side wins.

The Labor Party has pledged to kick in $480 million towards the cost of the $600 million Perth Gateway Project, aimed at easing the worsening bottlenecks for both freight and private transport. The state government will put up the remaining $120 million.

Julia Gillard had plenty of ministerial support when she made Labor’s announcement, surrounded by stacks of containers in a Forrestfield freight yard, adjacent to the airport.

On hand were her Transport Minister Anthony Albanese, Defence Minister John Faulkner, and Foreign Minister Stephen Smith. Naturally the Labor candidates for the highly marginal seats of Swan and Hasluck, which adjoin the airport, were there too.

The prime minister made the point that one reason for the snarls around the airport was the rapid growth in the resources sector and the explosion in the fly-in, fly-out workforce.

But there was a sting in the tail for opponents of Labor’s planned mining tax. The Commonwealth contribution will come from the revenue raised by the tax. In other words, as the prime minister stressed, part of the proceeds from the tax will be ploughed back into the state that generates the money. In fact the fly-in, fly-out workers will be direct beneficiaries, and freight movements will be more efficient as well.

Mr Albanese even said he had discussed the plan with the premier, Colin Barnett, and Transport Minister Norman Moore, who were both said to be “delighted”.

That turned out to be stretching credibility somewhat. Messrs Barnett and Moore were certainly pleased with Labor’s financial commitment, but less than happy with the plan to use the new tax, which they strongly oppose.

The Liberals have yet to reveal their hand on the airport issue. But electorally it’s something they can’t afford to ignore. They need to retain Swan, and win Hasluck, just as much as Labor does.

The presence of the Labor heavyweights at the airport announcement underscores an issue that promises to heavily influence local voting – whether Western Australia is getting its fair share of Commonwealth spending.

Certainly neither the Liberals nor Nationals are holding back on that issue. The Liberals have just launched an advertising campaign stressing that WA is being “milked” by the Commonwealth.

The Nationals are being even more direct. They are running ads on regional television with the simple message: “Reverse the rip off”. They want the very successful Royalties for Regions program, which operates at the state level, to apply federally as well.

These ads relate to the current financial structure, which flows from the introduction of the GST when John Howard was prime minister and Richard Court was premier of WA. It was to be a growth tax, replacing a list of small inefficient state taxes, and guarantee the financial future of all the states.

But because the Commonwealth Grants Commission has the responsibility of ensuring all states get access to roughly similar services, WA is paying for its own economic success, linked with the resources boom. WA now gets just 68 cents back for every dollar collected by the GST. Colin Barnett says that, in three years, that could be cut to just 54 cents for every dollar. The annual cost of that possibility would be $2.5 billion.

States like NSW, Victoria and Queensland are sitting pretty. They all get more than 90 cents in the dollar back.

“What have we done wrong, apart from being successful?” Mr Barnett asked at the recent State Liberal conference.

He concedes that the financially stronger states have a responsibility to help out those that are battling. As a ‘claimant’ state, WA was a beneficiary under this arrangement for many years. But to change the formula under which the GST money is redistributed would require the agreement of not only the Commonwealth, but the other states as well. And who is going to put their hand up, especially if it’s going to cost hundreds of millions of dollars in lost revenue?

Nevertheless, the remaining weeks of the campaign are an ideal opportunity to press WA’s case for a better financial deal.

It’s a touchy issue for both major parties, as voters look for further positive commitments like the Perth Gateway Project.

Early polls in the past

JULIA Gillard is seeking a second term for the federal Labor government, which will have run three months short of the traditional three-year term by the time August 21 comes around.

But in WA, early elections will soon be a thing of the past. And not just because of the previous state Labor government’s disastrous experience, which lost after going to the people seven months earlier than necessary.

It seems there’s consensus at the state level that it’s time for fixed four-year terms. The only issue to be nailed down is the favoured date.

Four-year terms have applied at the state level since Peter Dowding led Labor to a third term in 1989. It was believed governments needed an extra 12 months in power to implement their policies. These included some that might not have passed the scrutiny of today’s influential focus groups as being popular, but were nevertheless considered to be in the state’s best interests.

Premiers still retained the power to select the actual date, naturally hoping to catch their opponents napping, thus gaining an initial advantage in the campaign, although most WA leaders served the full term, give or take a week or two.

The merits of the fixed term have been kicked around for years. Former Labor prime minister Gough Whitlam, for example, has long advocated a ‘super Saturday’, in which a range of elections – local, state and even federal – could be held simultaneously, as occurs in the US.

There’s been a trend for premiers in other Australian states to accept the fixed-term concept in the interests of certainty and, allegedly, better government.

Now the major parties in WA have agreed. Electoral Affairs Minister Norman Moore, who’s in charge of the reform process, says he wants consensus. This would reduce the chance of the next government tampering with the system, resulting in uncertainty and instability.

Mr Moore says that after consulting the other parties, the next WA election is likely in the first quarter of 2013, probably in March. It’s understood draft legislation will be prepared, nominating the second Saturday in March every fourth year as the election date.

That will not only introduce certainty for WA voters, it will provide a bonus for the premier. He will get a record four years and six months first term before seeking re-election.

Right now it’s a term Ms Gillard could only dream about.

• Peter Kennedy is ABC TV's state political reporter.

 

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