Topics: GST distribution, Newspoll, Federation reform, Budget.
E&OE…
PETER VAN ONSELEN
Alright, we’re going to go back to the panel in a moment, there’s a lot to talk about, particularly in that space of the GST. But before I get the panel’s views, I want to get the views of a member of the Liberal parliamentary team, also one of their frontbenchers. Senator Scott Ryan, thanks for your company.
SCOTT RYAN
Good evening, Peter.
VAN ONSELEN
It’s not often that I’m here in sunny Melbourne, it is cloudy, I think. But anyway, we won’t talk about the weather. You know what it’s like here, you’re stuck living here. Let me get your views on the GST debate. West Australians, you would have seen it splashed across the front page of the Australian newspaper today. The Premier is not happy, he’s not threatening to secede, but he’s threatening to have a Boston Tea Party of sorts. They’ve got a fair point, don’t they? The West Australians? I mean their GST has plummeted in terms of their share to less than, it seems now it’s going to be, less than thirty cents in the dollar perhaps.
RYAN
Well look, horizontal fiscal equalisation is not only guaranteed to put every viewer to sleep, it’s also been one of the perennials of the Federation. I’ll start by stating at the outset, I think Western Australia has a legitimate gripe, but it reflects a challenge with the whole system, and now I’ll speak as a Victorian as well…(interrupted)
VAN ONSELEN
Well, you guys get an unfair share as well.
RYAN
Victoria has always given away more in revenue than it has received through these equalisation arrangements, before the GST and since the GST, in every single year they have existed. It’s always been part of the Federation; Victoria has always received hundreds of millions of dollars. I think it’s more than a billion dollars less, right through the Kennett era when I first got involved.
VAN ONSELEN
But it’s never been anywhere near where Western Australia is now.
RYAN
In percentage terms, Western Australian debt has really plumbed a new low. I don’t think, in my memory, another state has gone below eighty percent.
VAN ONSELEN
And Western Australia is at fifty cents lower than that in the dollar at thirty, it’s unbelievable.
RYAN
But, and this is where I’ll speak as a member of the national parliament, so we have the national interest as well here. So the system, if we want to maintain its integrity, does need to be looked at.
VAN ONSELEN
What does that mean though?
RYAN
Well, realistically I can understand Colin Barnett’s issue: that you can’t be dropping down to thirty cents in the dollar. But I do remember Jeff Kennett, and I do remember Ted Baillieu and Denis Napthine talking about how Victoria handed over billions of dollars…(interrupted)
VAN ONSELEN
Yeah, but relative to WA…(interrupted)
RYAN
Speaking as a Western Australian?
VAN ONSELEN
Yeah, sure. I’ve spent a bit of time in Western Australia, but the fact is for a small state like WA, in terms of population size, thirty cents in the dollar. I mean if that happened to Victoria it would cripple the state budget.
RYAN
Yes, but let’s also take into account a couple of things here, that in absolute terms Victoria is still by far the largest contributor, to the tune of a couple of billions of dollars a year.
VAN ONSELEN
Yeah, because you’re a much bigger state.
RYAN
And in fact, if last year’s relativities were frozen, and I don’t believe that anyone’s proposing that, it would actually mean Victoria got less money than Queensland.
VAN ONSELEN
Hang on, you can’t talk, Senator, in absolute terms. That would be the equivalent of me saying: why haven’t you got the Budget back into surplus? You’ve got twenty, thirty billion dollars more in the Budget than the Labor years, not accounting for inflation or all the rest of it.
RYAN
Absolute terms do matter because it does take into account the fact that, as a larger state, you have more people paying but you also have a much greater demand on your services. Now, Victoria’s a compact state so that does give some economies of scale, but at the same time I think we have to understand that it’s not just an argument about percentages. It is an argument about absolutes as well. I don’t think that anyone’s proposing, at a federal level, all forms of equalisation. But I think what’s happening to WA reflects what’s happening over the longer term to some of the larger states. This city here has eighty five thousand people a year moving here in additional population, it’s the fastest growing city in Australia.
VAN ONSELEN
Perth’s not far behind and it’s a much smaller city.
RYAN
It is, but at the same time you do reach a limit of infrastructure that might have been built eighty or so years ago. And you do get diseconomies of scale too, particularly in larger cities.
VAN ONSELEN
You’re just back on your East West Link bandwagon. But let me ask you this, before I get the panel’s thoughts on some of these thoughts around the GST, do you think that there should be a base rate for Western Australia? I mean, that’s what the West wants? If they get that, if they get what they want, somewhere in that vicinity, I think Colin Barnett wants it at fifty cents. Mathias Cormann was at least alluding to, on Australian Agenda yesterday to me and Paul Kelly that it should at least stop at the thirty seven cent mark that it has recently been at. If it does any of that, as reasonable as that might be and as reasonable as you think it might be, it does by definition hurt other states, one of which would be yours.
RYAN
Well it depends how, and let’s wait and see what happens over the next few days. I think there’s a different way to look at it, Peter, which is rather than have a cap on how far a state can fall, we may have to look at a cap on how much extra a state can get.
VAN ONSELEN
The Northern Territory would be in all sorts of trouble if we included them.
RYAN
We all accept, particularly because of the scale of the Northern Territory distributed indigenous population, we have always treated the needs of our indigenous people differently, in recent decades much more favourably, as we should. But if you put a cap on, a roof so to speak, how much extra a state can be distributed, then to a certain extent you do protect the level of distribution.
VAN ONSELEN
What about Tasmania, though? Tasmania gets a lot, I think it was Colin Barnett – to paraphrase him – they’ve become the national park, effectively the national park of the nation. Are you as critical as he is of a state like Tasmania for, I think he’s described it as, being rewarded for inefficiency?
RYAN
Well one of the things I’ll say in defence of Tasmania is that a lot of those laws are actually imposed by the national parliament. I used to study this, and I’d actually agree with Colin, I’m a very strong federalist. Part of the disability on Tasmania has been imposed by Canberra, and so if we want Tasmania to perform, I know that some of my Liberal colleagues have, for decades in fact, been saying can we remove some of the national shackles that the national parliament have imposed on them in order for the Labor Party to win Greens’ preferences.
VAN ONSELEN
Alright, I’ve been talking to Senator Scott Ryan. I’ll come back to him in a moment, but I just want to get the panel’s thoughts on this issue around the GST.
(Panel discussion)
VAN ONSELEN
Alright, let me come back to you if I can Senator Scott Ryan. I mean Rowan Dean opens up all the issues attached to the debate around the Federation, and there is a Federation White Paper process that is ahead of us. I am lead to believe that it might only be a matter of weeks, it could even be pre-Budget that we’re going to find out more about this. Is the Government serious about tackling Federation reform? Tony Abbott talked about it in Battle Lines, Kevin Rudd used to talk about it when he first became prime minister, but there’s often talk and no action, because of course action is hard when it comes to reforming the Federation. But do you think that this Government will step up on this?
RYAN
Well, we have to be. And there’s a real difference with the way we’ve talked about reform of the Federation and the way that Kevin Rudd did. The way that Labor and Kevin Rudd always talked about this allegedly cooperative federalism, and cooperative federalism usually means two levels of government ganging up to prevent any sort of real competition. The way we’ve talked about it is doing a couple of things that Rowan there just mentioned, having the states accountable for the policies they enact. Now, that means we have to move away from what Menzies referred to, when he couldn’t get the states to compete, the curse of uniformity. I mean, everything in Australia doesn’t have to be the same. We do want standards the same across boundaries… (interrupted)
VAN ONSELEN
To what extent though? One hundred per cent in one state and eighty in another?
RYAN
To a certain extent I do think we need to have that variation…
(Interjection)
We also want states to have policies that reflect the interest of their people; that’s democratic. Victoria may have a different view on a particular level of, let’s say kindergartens spending, than Queensland. And I actually think that that empowers citizens and gives them a bit of faith in democracy, because they’ll actually see their preferences being reflected at a lower level of government where they don’t have to convince the entire country. Competition (between) jurisdictions (is) very important; we saw how effective it was with the Kennett Government where we introduced case-mix funding in Victoria. It took twenty years, and despite Julia Gillard working for John Brumby when he was Opposition leader and attacking it, she then wanted to introduce that nationally.
VAN ONSELEN
You’ve been waiting to get that one in. We’ve talked about your portfolio; we can tick the box on that one. We need to take a break. It’s also nice to see a bit of federalism creeping its way back into the Liberal Party, it’s been centralise, centralise, centralise right since the days of Malcolm Fraser right through to every leader thereafter. You’re not leader now, but you never know. A move from the Senate, breaking news here on PVO News Hour: Senator Scott Ryan is considering moving down to the lower house and running for the leadership. We’re going to be back in a moment, when we do we’ll talk about something relevant to the leadership; opinion polls.
(Advertisements)
(Panel discussion)
VAN ONSELEN
I want to get the view of Senator Scott Ryan now. I know politicians aren’t supposed to comment on the polls, but you’ve always been a bit of an IPSOS man haven’t you?
RYAN
I’ve sat in this studio, usually on Tuesday mornings, and had to answer the poll questions. I’ve never been asked which brand of poll I prefer; I’ll give that to you. I’m going to disappoint you all; you’ve all had your comments.
(Interjection)
I think the point that Rowan made is the point. I tell you, people don’t sweat over these issues. They provide a lot of news print, they provide a lot of commentary but people don’t sweat over them, they’ll answer questions if asked. It doesn’t change the job I have to do every day and the job my colleagues have to do, which is we know we’ve got a very tough program to sell. We know we’ve got a tough job, we’ve got to convince people that we’ve done a good job…(interrupted)
VAN ONSELEN
What about the collapse in Bill Shorten’s numbers? He has plummeted to a point where he is now only significantly higher than Tony Abbott in popularity?
RYAN
I would have no credibility if I didn’t comment on polls from my own side, but started commenting on the others, so I’ll leave that to you and the panel. The challenge is for all politicians: convince people that you’ve done a good job over three years and ask for your job back. Now when you’re in opposition, it’s different from when you’re in government and I don’t think anyone on my side of politics is going to tell you that we don’t have a very, very challenging job ahead of us. We’ve had a very difficult first eighteen months, we’ve got a difficult budget, we’ve got a difficult economic situation. And so whether next week’s news or IPSOS poll or something else gives us some bounce in our step one morning, it’s not going to change what we’re going to do for the rest of that day.
VAN ONSELEN
We’re almost out of time…
(ENDS)