GST woes are ‘WA’s fault’

Pilbara News - - News - Shane Wright and Gareth Parker

Two State trea­sur­ers have ac­cused the Barnett Govern­ment of over­see­ing a “pro­tected” econ­omy, dra­mat­i­cally mis­read­ing the min­ing boom and now want­ing the rest of the coun­try to bail it out.

In in­cen­di­ary com­ments, SA Trea­surer Tom Kout­san­to­nis said the Barnett Govern­ment’s fis­cal predica­ment was its own fault, say­ing it had baked high iron ore prices into its Bud­get with­out any re­gard for the nor­mal laws of sup­ply and de­mand.

He was backed by his Vic­to­rian coun­ter­part Tim Pal­las, who said poor Bud­get plan­ning was no ex­cuse to up-end the way Fed­eral grants were shared across the Fed­er­a­tion.

The pair were speak­ing at a Com­mit­tee for the Eco­nomic De­vel­op­ment of Aus­tralia con­fer­ence in Can­berra along­side NSW Trea­surer Gladys Bere­jik­lian when the is­sue of GST re­form was de­bated.

The crit­i­cism was im­me­di­ately re­jected by WA Trea­surer Mike Na­han, who said it was rich com­ing from a State like SA whose in­dus­tries were dy­ing de­spite heavy subsidy.

He said any his­toric debt WA owed to the Fed­er­a­tion had been well and truly re­paid.

Mr Kout­san­to­nis said hor­i­zon­tal fis­cal equal­i­sa­tion — the way the GST is al­lo­cated to the States and Ter­ri­to­ries — had helped build Aus­tralia into a “great, pros­per­ous, egal­i­tar­ian” na­tion where peo­ple got good qual­ity ser­vice no mat­ter in which part of the coun­try they lived.

He said the Barnett Govern­ment wanted to change the sys­tem be­cause of the mis­takes it had made in its Bud­get and across the econ­omy.

“They ex­pected the WA min­er­als boom to run for­ever,” Mr Kout­san­to­nis said. “The WA econ­omy has not been lib­er­alised, it is not open.

“It’s ba­si­cally a pro­tected econ­omy and so the last re­sort is to blame the GST share.”

He said it was ironic that while the Barnett Govern­ment com­plained about WA’s share of the GST go­ing to other States, he was happy to “take all this money out of the Pil­bara and move it to Perth”.

Mr Pal­las said Vic­to­ria was the only State to make a net con­tri­bu­tion to the Fed­er­a­tion since 1901. WA, which had been on “the re­ceiv­ing end of largesse of hor­i­zon­tal fis­cal equal­i­sa­tion” for a cen­tury, was now de­mand­ing a GST change be­cause of five min­utes of trou­ble, he said.

Dr Na­han said the com­ments showed how dif­fi­cult the State Govern­ment had found it to get fair re­form to the GST sys­tem.

Pic­ture: Danella Be­vis

Pre­mier Colin Barnett fields ques­tions from the me­dia.

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