James O’Doherty: Minns can’t stop Albo dudding NSW for WA

NSW has been ripped off to the tune of billions by federal Labor, who are using our money to shore up states out west. The worst thing is, there is nothing Chris Minns can do about it, writes James O’Doherty.

A year out from the election, the Prime Minister is ignoring his own backyard in favour of political success interstate.

The cuts to our GST revenue and a declining share of funding from Canberra over the next four years will make life even harder for NSW residents like Jim Flanagan as he looks to find a new place to live when Anthony Albanese sells his Dulwich Hill investment property.

Tuesday night’s budget paper was grim reading for the NSW government, unveiling total cuts of some $1.3bn to the money we are getting from the Commonwealth over the next few years, compared to what was forecast just six months ago.

The most egregious rip-off? Billions of dollars in GST revenue NSW was expecting to get will instead be shovelled interstate, including to wealthy Western Australia.

Treasurer Daniel Mookhey first expected NSW to be $1.65bn worse off in GST funding next year.

NSW’s share of GST revenue is being shipped to Western Australia like so much iron ore. Photographer: Getty Images

Comparing last year’s budget with the blueprint handed down on Tuesday, we will lose even more of cash the state uses to pay for things like schools, hospitals, and roads.

Albanese insists that the GST carve-up was done independently of government, by the little-known Commonwealth Grants Commission.

Prime Minister Anthony Albanese signs a journalist’s arm and his front page on the WA GST funding guarantee. Picture: ABC

But the fact that his government will do nothing about an unfair funding model is entirely political.

A sweetheart deal for WA inked by Scott Morrison in 2018 put a floor in place for GST payments to ensure that no state would (at the time) get less than 70c in the dollar.

Albanese has backed that deal, even signing “No change to WA GST” on a WA journalist’s arm.

In the words of economist Chris Richardson, the agreement has turned an “industrial fire hose” of cash to the West; not to prop up a failing state economy, but to sandbag marginal seats.

Over 10 years, that deal is now expected to cost the federal budget $52.9bn.

“Read it and weep,” Richardson said.

Premier Chris Minns was disappointed but not surprised by the figures unveiled on Tuesday.

Minns has been calling for changes to the GST, and other funding agreements, to ensure NSW gets its fair share.

“A per capita split on the GST is the only fair way of ensuring that states like NSW can grow contingent with the real pressures that we’ve got on our budget, but also the services that we have to deliver to millions of people,” he said on Wednesday.

There is little Premier Chris Minns can do to stop the leakage. Picture: Gaye Gerard

The Premier knows he is flogging a dead horse on the GST argument: Albanese has abandoned NSW in favour of electoral success in the West.

Not even Albanese’s own NSW MPs were prepared to stand up for their home state getting a better deal when I asked them all in March. Neither were Opposition MPs from NSW, including Treasury spokesman Angus Taylor.

Minns might have a better deal on getting a larger proportion of Canberra’s cash under funding agreements for things like health and education.

In glossy fact sheets handed out in the budget lockup, the federal government was crowing about funding for NSW growing to $55.83bn by 2027-28.

What they failed to mention is that, as a proportion of all Commonwealth spending to the states, our slice of the pie is reducing over the next four years, from 28.1 per cent of “total” federal funding to 27.6 per cent in 2027-28. That’s all while NSW has 31 per cent of Australia’s population.

The feds have also effectively ignored the fact that NSW will take the lion’s share of almost 1.4 million overseas migrants over the forward estimates. Based on long-term trends, 510,600 of those migrants will call NSW home.

The NSW Premier was keen to point out these inequities before federal Labor’s third budget, talking a big game on standing up for his state: “NSW can’t be at a disadvantage, particularly when you look at Western Australia which is on track to be (one of) the wealthiest governments in the world,” he said on Monday.

“There’s got to be some balance here. You’ve got a fast growing economy like NSW, we’ve got 37 per cent of inbound migrants moving to the state, and we need our fair share of infrastructure funds.”

Two days later, it appears those comments were more bark than bite.

Minns was loath to criticise Chalmers for dudding NSW on Wednesday, emphasising how he was “happy” at a $1.9bn roads funding package secured thanks to The Daily Telegraph’s Let’s Get Moving campaign.

As Paul Keating once said, “never get between a Premier and a bucket of money”.

But the muted reaction from the NSW government to missing out on Tuesday proves another truism: everything is about politics.

While Albanese can be accused of ignoring his home state, Minns does not want to end his Labor comrade’s hope of winning in NSW at the election next year.

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