WA election: Turnbull flying into GST storm

The Australian, February 16, 2017:

West Australian Premier Colin Barnett has blamed his government’s worsening fiscal crisis on the “unfair” federal GST carve-up and says he hopes Malcolm Turnbull — due in Perth within days — will follow through on a promise to reform the system.

The Prime Minister will campaign alongside Mr Barnett next week and will face fresh demands to set a minimum share of GST for all states, a pledge he originally made at the WA Liberal Party state conference last August.

At the time Mr Barnett said he wanted a floor of 75c in the dollar under which no state’s share of the GST could fall, and he believed the Prime Minister would formalise the new system by December.

The Premier said yesterday he still hoped the floor would be ­implemented, even though Mr Turnbull or Scott Morrison had not yet taken action.

“I’ve said 75c — I think a ­realistic figure might be two-thirds,” he said as he campaigned for the March 11 state election. “In other words, every state keeps at least two-thirds of its GST, one-third could be redistributed. What the Prime Minister and Treasurer think, it’s up to them.”

Mr Barnett again blamed his government’s fiscal predicament on its share of GST receipts, which have fallen to 30c for every dollar raised in the state.

“We are forced into running a deficit,” he said. “If we got the same deal as every other state, instead of having a deficit this year of over $3 billion we’d probably be $1bn in surplus and we’d be able to fund the schools and the hospitals and pay the teachers and the ­nurses without having to borrow.”

Senior federal Liberals have said the floor would come into ­effect when WA’s share of the GST returns to more than 70c in the dollar, a prospect that is not forecast for at least four years.

Mr Barnett yesterday cast doubt on opinion polls that have shown his government could be headed for a big defeat next month. The Australian revealed yesterday that Liberal Party internal polling had shown a two-party-preferred vote of 57 per cent for Labor to the Liberal-National alliance’s 43 per cent.

This is even worse for the Liberals than a Newspoll survey published last month showing Labor leading by 54 to 46 per cent.

Mr Barnett said he was not concerned about the polls, claiming they were unreliable.

“The non-sampling error is huge and that’s why we are seeing polls like on Brexit and Donald Trump’s election … being way out of whack because people are making up answers, they’re not answering in accordance with how they’ll actually vote,” he said. “The feedback I get from candidates out there is good, it’s strong, there is not an anger out there.“

Mr Barnett and Treasurer Mike Nahan yesterday unveiled changes to payroll tax they said would save businesses more than $55 million over the next three years if the government was re-elected. The government plans to raise the payroll tax threshold from the current $850,000 to $900,000 from January 2018.

Mr Barnett said 400 companies that currently pay payroll tax would no longer pay it and a further 14,000 businesses would ­receive reductions in their tax bill.

Dr Nahan would announce savings measures during the campaign to pay for the tax cuts.

Labor Treasury spokesman Ben Wyatt described the cuts as a “desperate attempt to buy votes”.