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Minister for the Environment and Heritage
Senator the Hon. Ian Campbell

Wednesday, 13 April, 2005

6PR Perth Morning show

Government's GST Battle with the States

What some might think is the annual blue between Canberra and the states is underway - there must be a federal budget in the air, you might think. But this year things are a little more intense and a bit different. On top of the normal argy-bargy is the fact that for the first time in nearly 30 years a federal government is about to get control of the Senate - the states' house - and so for the first time in nearly three decades a federal government will be able to do what it was elected to do, without having to negotiate with the minor parties in the Senate. For John Howard that means many things, like selling off the rest of Telstra, getting a national industrial relations policy instead of a fragmented one involving differing versions in each state, which understandably drives national businesses crazy - maybe there'll be even major changes to our media ownership policy.

Canberra is also pushing the states around over the GST. Now, the states are awash with cash coming from Canberra, flooding in from the tax the Howard Government introduced back in 1999. But Treasurer Peter Costello is demanding that the states cut a raft of taxes he says they promised way back then, that the GST would replace.

Now, like the states always do, they're clinging to their tax dollars like Scrooge. Well, it looks like Peter Costello has won. The front page of The Australian newspaper today says the premiers have caved in, all but one. The front page of The West Australian newspaper has a defiant Premier Geoff Gallop accusing the Prime Minister of being 'power drunk' and playing a lone wolf hand on the GST.

So will WA be left out in the dry here? Is this going to cost us millions of dollars of federal revenue, just like Dr Gallop's intransigence on national competition payments has cost us? I think $80million we've lost out at last count there.

Ian Campbell is our most senior West Australian Liberal senator. The Environment Minister is also the dominant force in the WA branch of the Liberal Party - a branch that has always resisted Canberra control. Geoff Gallop says this latest blue is just a grab for power by Canberra.

Senator Ian Campbell joins me now…

Ian, do you oppose what appears to be growing centralism by John Howard?

Well I don't think… I mean, it's typical that Geoff Gallop seeks to portray it that way. What John Howard and the Government is trying to do is implement its programs, and to hold the states to an agreement, as you very eloquently put it in your introduction. I mean, the states said…reached an agreement with the Commonwealth, very clearly, that we would bring in a GST, we would give all of the revenue to the states, so that's hardly centralising power, that's giving the states a revenue stream that they've never had before, to spend as they would like, but as part of that agreement we said, let's go into a historic national compact, a historic national agreement, and get rid of all these annoying taxes, which really do hurt our businesses internationally, and the states said, look, we will abolish all of these taxes. They were to abolish a number of them right up front in 2000 and then a few more over the years.

When the Government couldn't get the GST through the Senate, your listeners will remember, we did an agreement with the Democrats to remove food from the GST, and because that reduced the revenue coming from the GST the states said, hang on, we can't keep our side of the bargain now, because we'll be getting less revenue.

So we did a renewed agreement, and said, well, look, we'll phase out the taxes …these taxes now, but we'll hold off on these other businesses taxes till 2006, subject to looking at how the revenue is going.

Now as you just said in your introduction, the revenue projections have been absolutely overrun. I mean, WA is hundreds and hundreds and hundreds of millions of dollars ahead of where we projected, and so the cautiousness with which we said to the states, well, look, let's review it in 2006, before we go ahead and take off these business taxes, which hurt WA businesses and hurt jobs in WA , that was a cautious and sensible thing to do, but the reality is…

…look, Ian, anyone who's been listening to Peter Costello, I think, must accept that he's got excellent arguments and that the states are on shaky ground.

And, Paul, all of the other states have now said, look, Peter… no-one's really argued, all they're doing is arguing over the scheduling. Each state has come on board now, so, once again, Geoff Gallop, you know, he's out there saying let's …let's try and do something different. Now, look, that's his right, what I worry about as a West Australian first and foremost, is that the West Australians are missing out because Geoff Gallop wouldn't do the hard work and sit down and say, how are we going to be part of national reform of water that you and I and all of your listeners know needs to happen, more in Western Australia than anywhere else, so he's excluding Western Australians from literally hundreds of millions of dollars of payments under the national water fund. He's now doing this on taxes, and he's the last premier who's threatening to withdraw from the corporations agreement. Now that's … businesses in WA would then be forced to pay new fees to a WA Labor Government regulator, set up a new corporations office, lose funding under the corporations agreement. So I sort of wonder why Geoff Gallop get so much enjoyment out of being entirely out-of-step with everybody else…

…well he's actually making Charlie Court look like a raging centralist here. He's doing exactly what Peter Beattie has done in Canberra, that's copy Joh Bjelke-Petersen's approach to Canberra - bashing Canberra is good politics in WA .

Well, look, I... I'm not sure that West Australians would appreciate that. I think that it's very important for West Australians to stick up for Western Australia. We are only 10% of the country, population-wise, but we do create about 30%+ of the export revenue, we are a long way away from the centre of power, and it's very important that we have good, solid arguments when we get to Canberra, and Peter Beattie, to his credit, he'll put up the case, he'll negotiate a position for Queensland and get an outcome. What Geoff Gallop does is he storms off like a petulant child, and doesn't sort of come up with a solid negotiating position, and keeps losing for the people of the west…

…yes, it does appear on the GST that all the other states are going to negotiate an outcome, however anyone who saw that speech the Prime Minister made to the Menzies Research Centre on Monday night, would have to say that that was pretty much an unveiled attack on the states. Would you concede that many WA Liberals are uncomfortable with the Prime Minister's approach to the states, as instanced, in particular, in his industrial relations reforms, taking that over nationally?

I think that all West Australian Liberals would want to have an industrial relations system that gives power to individuals, that ensures that people have freedom to join a union or not to join a union, that we shouldn't have a situation where if you don't join a union you're kept off a building site. I think all West Australian Liberals would be embarrassed by what's occurring in the West Australian building industry - the worst and most corrupt building industry in Australia. I think that West Australian Liberals would want to see a sensible industrial relations system, and that many West Australians would have reservations about a whole national system, but I think many would share the view that, quite frankly, the industrial relations system under the Richard Court government and the industrial relations system that we are putting in place are very similar, and having those similar systems for the very good reasons you've put forward - I mean, they must be… I mean, if you're running a business like Bunnings, or if you're running any sort of national business, many of the businesses are national these days, then having half-a-dozen different industrial relations systems is just absurd…

… but, Ian, you know how this plays out politically, in WA . Even the new Liberal industrial relations spokesman, Troy Buswell, on this program yesterday, said he was uncomfortable with Canberra grabbing industrial relations.

Well, look, I think the sensible thing for the WA Liberal Party is to look at the details of what Kevin Andrews puts forward in his industrial relations reform package, it's all about a giving power to individuals, it's all about empowering employees and employers to make agreements at workplaces. It will all be about reform that creates more flexibility and more competitiveness and that's got to be good for WA

…so this isn't just a Canberra grab for power?

It's basically delivering power to individual workplaces. I think that John Howard made a very good point, in his speech, and that is this should not… I mean, your listeners are sick and tired of state governments blaming the Federal Government, and the Federal Government blaming the states. It should be all looked at through the lens of what are you… what can you do best to govern Australia at the state and federal level to deliver the best services at the best price - in other words, the lowest taxes for all Australians, regardless of whether they live in Karratha or Perth or in Busselton, or whether they live in Balranald or Sydney or Brisbane, and that's what we should do, and that's why Peter Beattie is to be given credit, and Steve Bracks, they've gone away and said, look, how can we best negotiate with the Federal Government to get to the best outcome.

But let me say on infrastructure, Paul, this is a big issue. I mean, Geoff Gallop's getting away with murder on this. We, as you know, about a year ago, in the Auslink* announcements, when I was road minister, increased WA 's road funding by the biggest amount ever in WA history. We forced them… I mean, they said they wouldn't build that Peel deviation road until 2009 and it wouldn't be finished until the next decade, and we said, as a Commonwealth government, look, that's not good enough, we need this road now. Anyone who went down south over Easter knows that we need the road yesterday, not in … not at the end of the decade.

We've increased infrastructure spending in Western Australia, while the WA Government has actually reduced road spending. They're only building one bit of infrastructure in that state, and that is that stupid railway down to Mandurah….

Look, Geoff Gallop's getting away with murder on a whole lot of issues. I just want to make sure, on this last question, you don't get away with murder here, isn't it your job as a Liberal senator to defend the interests of Western Australia, not just do the Prime Minister's bidding?

Well , Paul, I'm privileged, on behalf of the West Australians, not only to represent them in the Senate but also to sit at the Cabinet table, and this year to sit at the expenditure review committee. My strong view is that a deep reform of the industrial relations system, reform of the business tax system, reform of welfare to work, all of these measures, would be very, very important to Western Australia, and will see my state benefit better… comparatively better than most other states through these important reforms, and I will work very closely with my WA Liberal colleagues, and, in fact, quite frankly WA Labor colleagues who have a progressive view, but not, you know, it's a bit embarrassing to see a premier who is always out-of-step. I wouldn't mind him being out of step, as Sir Charles Court was, to his great credit, on many occasions, if he was winning for WA , but this guy gets…is basically taking a Don Quixote sort of view of things, tilting at windmills and not getting a result. Let's get some results for WA , not just play politics.

Okay Ian, thanks very much. Senator Ian Campbell, the Environment Minister.

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