Western Australian Premier Colin Barnett has responded to Federal Treasurer Joe Hockey’s comment about its government’s debt.
Mr. Hockey has launched a fierce attack on the Barnett Government’s financial blunders including the loss of the triple A credit rating and the slower than expected process of privatisation.
The Federal Treasurer’s comments come after fellow party member and former State Treasurer Christian Porter complained about WA’s low share of GST. Under the current system, WA gets 37 cents in every dollar this financial year. But, by 2017 to 2018, WA will only get 11 cents, a decrease of 26 cents.
Premier Colin Barnett admitted that he is glad that the Federal MPs have raised the issue, however he continued to defend his state’s financial and economic performance.
“I was pleased that the Federal Members of Parliament for Western Australia raised it, I have been calling them to be more vigorous in that space and they have now done that. Joe Hockey’s comments in my view were very unfortunate, however, we will not get too excited about it,” Mr. Barnett said.
“If you look at any economic statistic, Western Australia is out performing any other state. The GST unfortunately has degenerated to simply an Australian Government tax on Western Australia, it as nothing to do with fiscal equalization any more.”
Mr. Barnett also claimed that two thirds of Western Australia’s GST (or $3.7 billion) has been randomly distributed to other states. He labeled this arrangement as a joke.
Under the current distribution method, Tasmania receives $500 million, South Australia $700 million, Queensland $600 million, Northern Territory $1.7 billion and Canberra receives $104 million dollars.
“I think there are many difficult issues to deal with, this is not a difficult one. We are not talking about an over-night change, we’ve always that Western Australia prepares to subsidies the weaker states, as we’ve been historically,” Mr. Barnett said.
“But the degree of subsidies have never been on this scale in Australian history and it’s weakening the Australian Federation. I was glad that the Prime Minister intervened and show some leadership.”
WA currently has a net debt of 22 billion dollars and the government commenced its asset sales program last week in an effort to reduce the debt by $1 to 2 billion.
State assets including the Utah Point Bulk Handling Facility in Port Hedland, the Kwinana Bulk Terminal and the Perth Market Authority will be sold to the private sector in order to boost the state’s privatisation process.
Mr. Barnett emphasised that his state’s debt is a “good debt”, as 93 percent of it has been transferred to the state government’s long term capital investment on utility, public transport and health infrastructure.