12/08/2010 - 00:00

Star turn may not play out so well

12/08/2010 - 00:00


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Colin Barnett played a star role at the Liberals’ federal campaign launch last weekend, but some of Tony Abbott’s plans may concern the WA premier.

WESTERN Australia’s premier, Colin Barnett, received an enthusiastic reception when he addressed the Liberal Party’s federal election campaign launch in Brisbane.

And well he might. It’s been a tough decade for the Liberals in state elections across Australia, and Mr Barnett is one of the party’s few winners.

That’s why he was given such a high profile at the launch, bolstered by the fact he and his government are riding high in the polls.

But as he went through the routine of promoting the prospects of a new federal Liberal government, compared with another term of Labor, even he might have been forgiven for harbouring some private concerns at the possibility of a change.

Certainly the proposed new mining tax would disappear under a new government, and he would welcome that.

The fight with federal Labor over health funding would also go. The demand that WA hand over 30 per cent of its revenue from the goods and services tax, in return for a greater Commonwealth responsibility for the funding of public hospitals, would disappear. Or would it?

There was just enough in Liberal leader Tony Abbott’s recent announcement of the opposition’s health policy to suggest that, if he won, the GST issue could come back to haunt Mr Barnett and the WA government.

Mr Abbott has promised at $3.6 billion ‘beds and boards’ policy on public hospitals over four years, with the community given a bigger role in how they are run.

A federal Liberal government would meet about 40 per cent of the share of total public hospital funding.

But here’s the sting.

Mr Abbott added: “In the future the coalition would be prepared to move to a higher percentage of funding ... but only if the relevant state government agrees to surrender an appropriate percentage of its GST revenue.”

In other words, the federal Liberal plan for the funding of the public hospital system has some common ground with Labor’s, to which Mr Barnett is strongly opposed. WA would have less financial independence, regardless of the complexion of the government in Canberra.

Such a proposal from federal Labor is no real surprise. Centralism has been a Labor policy for years. It’s been less so under the Liberals, although it had some attraction to John Howard as prime minister.

But Mr Abbott apparently has little time for state governments, as he explained in his book Battlelines, published last year. He takes a very hard-nosed view as to how the founding fathers hit on six states in the federation.

“In fact the men who founded modern Australia weren’t sentimental about the states,” he writes. “They knew that a federal structure was the only way to turn six colonies into one country.”

Mr Abbott acknowledges there could be some concerns with his views.

“People in Perth or Hobart may still feel politically vulnerable and prone to official neglect but, even in the outlying regions, they have less sense than ever of state patriotism,” he writes.

Perhaps Mr Barnett might ask the federal leader just what he means by “outlying regions”. Does it include WA? Perhaps if it does, the premier might then remind Mr Abbott of a few of the economic facts of life, and why he believes the state’s economic future is tied more to burgeoning markets to the north rather than states to the east.

But Mr Abbott goes further, questioning the traditional Liberal view of the federation.

“The commitment to the states of some Australian conservatives contrasts with British conservatives’ preference for a strong federal government,” the English-born Mr Abbott writes.

Mr Abbott’s Sydney-centric view of the nation also includes the Labor side of politics.

‘If you’re not in Sydney overnight then you must be camping out,’ was a saying strongly linked with former Labor prime minister Paul Keating.

A former NSW Labor premier, Neville Wran, presented a similar view of where the power lies in the federation more than 30 years ago when railing against criticism of his government by a former federal Liberal treasurer Philip Lynch.

Sir Philip had reportedly been critical of the NSW government during a visit to the US. Mr Wran picked up on a subsequent trip to the US that Sir Philip had warned American investors against putting their money into NSW on the grounds that the state was being run by a ‘socialist’ government.

The NSW premier’s subsequent fury was possibly fuelled by the fact that Sir Philip was a Victorian. But he made his point forcefully.

He questioned some of Sir Philip’s business dealings, which were the centre of attention at the time and added: “What he doesn’t seem to realise is that when you bag NSW you bag Australia. Because Sydney’s where the action is.”

Mr Barnett has been a fearless critic of proposed funding arrangements for federal Labor’s hospital plans. And he’s also presented a persuasive case for WA to get a better deal from the Commonwealth Grants Commission over its GST contributions.

What’s not yet clear is that, should there be a change in Canberra after August 21, whether he will receive a more sympathetic ear. As set out in Battlelines, Mr Abbott’s views on Commonwealth-state relations indicates there is little cause for comfort on that issue.

Check on cheque

THE old saying ‘the cheque’s in the mail’ has taken on new meaning for thousands of small- to medium-sized WA businesses.

They have been the beneficiaries of a state government promise last year to refund payroll tax, to the tune of $100 million, to offset the impact of the global financial crisis.

The government introduced the concession as a one-off to help save jobs. And the move seemed to work.

Payroll tax has long been criticised as a tax of jobs. And the anecdotal evidence is that the government’s move prevented significant sackings.

In the 1990s, then premier Richard Court undertook to get rid of the tax as part of the planned trade-off for the introduction of the GST.

It’s history now that the Howard government was forced to make several concessions to the Democrats in order to get the GST legislation through the Senate.

One of the concessions resulted in payroll tax being dropped from the list of taxes to be axed, much to the disappointment of tens of thousands of employers and the Chamber of Commerce and Industry

The CCI has been a tireless campaigner to have payroll tax dropped altogether. But short of a joint Commonwealth-state decision to increase the GST, and that’s unlikely, it looks like payroll tax is here to stay.

It’s now easily the state government’s biggest tax, and is expected to bring in almost $2.5 billion this financial year. Nevertheless the refunds to small- and medium-size businesses, which started last week, are sure to be well-received.

In this age of electronic transfer, the cheques may not actually be in the mail.

But the impact will be the same.

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




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