Six months after getting a standing ovation for promising to fix the GST system that was short-changing WA, Prime Minister Malcolm Turnbull has backtracked and now says the floor he promised to set for the states is years away.
The comments are a significant election blow to Premier Colin Barnett, who said over the weekend he wanted an answer from the prime minister during his visit this week about where the floor would be.
“The GST is our one major financial issue. I’ve been banging on about that for the last eight years, and I’ll continue to do so,” he said at the Liberal Party’s campaign launch.
The state’s GST share fell to 30 cents in every dollar raised by the tax in WA last year, equating to a $4.7 billion shortfall compared to the state’s population share.
It is blamed by the Barnett government for its record $3 billion-plus deficit.
Mr Turnbull now says WA will have to wait until its share increased to about 70-75 cents in the dollar.
He wrongly said that was forecast to be in about 2020, but Treasury says it will only be about 60 cents.
“Clearly you want to set a floor at a time when no state will be a loser and we need to wait a few years until the Western Australia share under the current formula climbs back up to a more normal level,” he told reporters.
It will also require the agreement of other states, he says.
Mr Turnbull said he was being consistent with last year’s promise, but last August there was no mention of the change taking until 2020 or requiring the agreement of the other states and Treasury being unable to act.
He also said Labor leader Mark McGowan should not be promising to divert federal funds to help pay for Labor’s flagship election policy – the $2.54 billion Metronet train system.
Labor plans to scrap the $1.9 billion controversial Perth Freight Link road project, tear up contracts already signed for it and redirect part of the $1.2 billion in federal funds to Metronet.
“That’s not his money … the Perth Freight Link project is one of the top priority projects and was assessed very carefully by Infrastructure Australia, was fully costed and engineered and is ready to go,” Mr Turnbull told ABC radio.
“If he wants federal money for another project, he will have to make a case for it.
“Mr McGowan has no business case, even if this is the best idea in the world it will take years before it gets through all those hoops and governments can responsibly allocate the funds and get the work started.”
Mr McGowan says he is prepared to “have a war” with the federal government.
“We’ll get the money out of the commonwealth and if I have to have a war with the federal government I will, but they will cave in because Western Australia will not be intimidated or bullied,” he told reporters.
Mr McGowan said the federal and state Liberals had failed WA by not delivering changes to the GST.