23/09/2010 - 00:00

Who is the real winner here?

23/09/2010 - 00:00


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The once-cosy relationship between the state and federal political leaders requires a delicate balancing act in the wake of a new Labor government.

Who is the real winner here?

The Western Australian Liberal Party is naturally cock-a-hoop over its vote at last month's federal election. But it would be unwise to get too carried away.

Sure, it now holds an impressive 17 of the 27 seats WA has in the Senate and House of Representatives. Labor has only seven, the Greens two and the National Party one.

And with the Liberals in a governing alliance with the Nationals at the state level, it would appear that the party holds all the aces.

Under Colin Barnett, the state initially did relatively well in its dealings with the federal Labor government under Kevin Rudd, possibly because the then prime minister also hailed from a resource state.

Unlike during the Howard years, hundreds of millions of federal dollars either started to flow, or were earmarked for pet Barnett projects such as the Ord mark two, Oakajee, and the sinking of the city railway.

Mr Barnett even started referring to “my friend Kevin”, much to the chagrin of the then PM's state Labor colleagues.

But if federal Labor thought it was buying Mr Barnett’s support, or even muted opposition, for initiatives such as the new mining tax or its hospital funding plan, it was sadly mistaken. The premier did what his party expected him to do when the chips were down, and distanced himself from the other premiers, all of whom are Labor.

The dynamic under the newly re-elected Labor government, with the support of two independents and a Green, promises to be a new ball game for WA. And it could go either way, depending on how the Premier plays it.

The state is still keen to attract as much federal money as possible to help ease the “growing pains” linked with the rapid growth of the resources sector. The pressure is on throughout the state. A small but significant example is the southern Pilbara port of Onslow. Its population is tipped to double from 700 to 1400 over the next few years if the planned Wheatstone LNG project becomes a reality. Servicing that growth is not cheap.

It’s in Canberra’s interests to help fund projects that will add to the national wealth and ease balance of payments pressures. WA would appear to have a strong case on a number of fronts. But when there’s strong competition for funding, including for nakedly political reasons – pork barrelling – there’s no guarantee the money will come through.

And politics being what it is, it's even less likely to happen if the premier of the state is a continuing thorn in the side of the federal government. The opposite is to be sycophantic, and Colin Barnett is unlikely to be that.

Two recent issues suggest that communications between the Premier's office in the Governor Stirling Tower in St Georges Terrace and Canberra are not as good as they could be.

The first is the issue of expanding the number of places for asylum seekers who are based in WA at either Curtin in the Kimberley, or Leonora. There was speculation of increased numbers at Curtin and possibly swinging in the old army camp at Northam.

In both cases Mr Barnett said there had been no contact from the Commonwealth. But he noted that when services such as health, education and law enforcement were called on to support such expansion, it was the state that carried the burden.

Similarly with the visit to Australia of the American chat show host Oprah Winfrey. She’s down to visit New South Wales, Victoria and Queensland, along with her entourage of 300-plus. While arrangements were being made with these state governments to accommodate the visit, WA was officially in the dark – out of sight, out of mind.

The reason for overlooking WA could have been a combination of cost, distance and time. But the apparent lack of communication also begs the question that, as the only non-Labor state, the prevailing view was that WA was easy to sideline.

So there's food for thought for Mr Barnett and his cabinet colleagues. What it might lead to is an increased dose of pragmatism on the part of the Premier. More give and take, rather than seeing things in terms of black and white.

Certainly state Labor has made its resentment of the cosy initial Barnett-Rudd relationship well known.

It remains to be seen whether Julia Gillard, with her Victorian background, is as receptive to WA’s case for infrastructure development as Mr Rudd appeared to be.

If Colin Barnett can develop a strong rapport with Ms Gillard, and convince her of the economic benefits from Commonwealth investment in WA, the money might continue to flow, and business will be a winner.

But all that could be threatened if relations sour. Despite the strong Liberal vote in WA, it requires a delicate balancing act by the Premier.

Interstate sniping

It was probably inevitable that Colin Barnett’s call for a better deal for WA under the Commonwealth-state financial arrangements attracted a response. After all, if WA were to get a better deal, then it would have to be at the expense of one or more of the other states.

And South Australia’s long term Treasurer Kevin Foley didn’t disappoint.

Under the heading ‘Crocodile Tears in Perth’, Mr Foley wrote in the national daily that WA’s reduced share of the revenue from the goods and services tax was simply a turn of the “wheel of fortune”.

Mr Foley noted that WA had been a beneficiary of the formula until 2006, and the main reason for the fall in the GST grant share was due to the mining boom and a jump in royalty income.

No argument there, but with the GST share now down to 68 per cent, tipped to hit 54 per cent in three years, and the Commonwealth wanting a further one third to cover its hospital plans, Mr Barnett’s protest was hardly a surprise.

But in politics, timing is everything. And Mr Foley’s dig at WA coincided with predictions he was about to deliver a “horror” budget. And when that’s the case, any treasurer worth their salt is keen to look for distractions.

He did have the good grace to concede that his state is a beneficiary of the GST carve up.

But as West Australians know, money doesn’t grow on trees. And with expansion, there is pressure for infrastructure to meet the demands of growth linked with new developments.

Mr Barnett wants a floor of 75 per cent of GST revenue in recognition of the pressures growth places on a state’s capital works budget.

Perhaps when some of South Australia’s mooted resource projects take off, Mr Foley might be prepared to modify his views.

Certainly he and Mr Barnett will have an interesting chat at the next meeting of federal and state treasurers.

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









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