Barnett rejects GST strings
Colin Barnett has flatly refused to sell WA's electricity network as part of any GST rescue as he vowed that Joe Hockey's failure to deliver a better deal for WA would cost the Federal Government at the polls.
In an interview in Delhi during his Indian trade mission, the Premier said the Federal Treasurer was making a "huge mistake" by tying the issue of a bigger GST share for WA to broader economic reforms.
He told The Weekend West Prime Minister Tony Abbott's taxation and Federation white papers process would be a non-starter unless the Commonwealth resolved the GST issue with a more equitable distribution.
"Joe has made a huge mistake in my mind and he will not be popular in WA because of that," Mr Barnett said. "In the Federal election, the number one issue in WA will be the GST and I think the Federal Liberal Party faces the prospect of losing a number of seats in WA on that issue."
The Commonwealth Grants Commission has recommended WA's share of the GST should fall from 38¢ in the dollar this year to 30¢ in the dollar next year, despite a plummeting iron ore price that will hit WA revenue by more than $3 billion in 2015-16.
While Mr Barnett has long argued for a 75¢ in the dollar floor in any State's annual GST allocation, WA Treasurer Mike Nahan had proposed a 50¢ in the dollar floor to Mr Hockey ahead of Thursday's Treasurers' meeting.
Yesterday, Dr Nahan said he was savaged by Treasurers from the other States and Territories at the meeting.
Mr Hockey, who deferred a decision on GST allocation this week, had four options: to accept the CGC's 30¢ recommendation, freeze GST relativities for a year (leaving WA's share at 38¢), provide WA with a once-off top-up, or institute a floor below which GST relativities could not fall.
Dr Nahan said he would not speculate on which option Mr Hockey would choose.
Dr Nahan and Mr Barnett were adamant the State would reject Mr Hockey's calls for reforms including the sale of Western Power, deregulation of shopping hours or the abolition of the Potato Marketing Corporation.
Shadow treasurer Ben Wyatt said the Government faced the "embarrassing" situation of every Liberal and Labor Treasurer in the country concluding it was an abysmal financial manager.
