Bush Summit: WA limbers up for battle over GST

WA Treasurer Rita Saffioti has flagged using the upcoming GST review to push for changes to other ‘absurd and obscure’ funding arrangements which short-change her state.

WA Treasurer Rita Saffioti at the Bush Summit in Port Hedland on Friday. Picture: Colin Murty

Western Australia will cite a looming wave of state infrastructure investment to support the next generation of mining projects as part of its defence against a raid on the state’s GST share.

WA Treasurer Rita Saffioti used her address to the Bush Summit in Port Hedland on Friday to highlight the need for a significant amount of state support for the critical minerals projects expected to be developed in the future.

That support, she said, needed to be considered when the Productivity Commission carried out its review of the current GST ­arrangements in 2026.

WA has received billions of dollars of extra GST revenues since a 2018 deal with the Turnbull government guaranteed the state at least 70c of every dollar of GST it generates. It’s huge mining royalty streams meant it had previously collected as little as 30c in the dollar before the floor was introduced, and that would have dropped to less than 10c in the dollar without the changes.

While other state treasurers, led by Victoria and NSW, have ­argued for the floor to be scrapped, Ms Saffioti has now flagged using the review to highlight other ­“absurd and obscure” federal funding arrangements that she said short-changed WA.

The WA Treasurer has already identified federal national park funding – which is determined by population rather than land mass – and funding for remoteness, which delivers more to Tasmania than WA – as two areas where the state should be receiving more money. She also said the companies pushing new critical mineral projects in WA typically didn’t have the balance sheet and scale of the major miners that underpin the state’s iron ore mines, meaning the government was likely to have to support those projects through infrastructure.

“Every second day there’ll be a company coming in saying, ‘We’ve got an incredible project, we just need access to road, rail, ports, we need the energy, we need the land, we need the water’,” Ms Saffioti said.

“That necessitates us … leaning in and supporting industry to get those projects off the ground. Without that capacity, these projects won’t go ahead, and that’s not only bad news for WA, that’s bad news for the nation.”

Patrick Gorman, the Assistant Minister to the Prime Minister, told the Bush Summit his government remained committed to current GST arrangements.

“I’m not going to give the Productivity Commission any advice, but I’ll say when it comes to my government’s policy, the GST deal stays because we recognise it’s fair, it’s the right thing to do by WA, and that 75 per cent floor might benefit other states from time to time as well,” he said.

Saul Eslake, an independent economist who has previously ­described the GST floor as the worst public policy decision of the 21st century, said preserving the current arrangements would eventually mean that WA was able to deliver far better services than the other states were able to offer, undermining one of the core principles of the federation.

That, he said, was despite WA having put in place numerous policies that have held back its economy in other areas.

“I’m staggered at the entitlement mentality that a lot of West Australians have developed. They think it’s their own hard work that found the Pilbara and sent the iron ore price up into the stratosphere. But I’m also amazed that they seem to think that if only Tasmania or Victoria threw out red carpets for mining companies like WA thinks it’s done, they would all of a sudden find that there were valuable minerals under Cradle Mountain or that another Eureka will be discovered,” he said.

“You can say, yes, Victoria has an anti-fracking mentality, and both Victoria and NSW have hindered, for environmental reasons, the development of onshore gas reserves. That’s true. But which state has a ban on uranium? It’s not South Australia. Which state was the first in the country to ban native forest logging?”