SUBJECT/S: GST, Gas exploration


TOM CONNELL: We’re going to talk about the GST, that perennial issue over in the West. Joining me live now is Shadow Consumer Affairs Minister Tim Hammond, of course a WA representative for the Labor party, thank you for your time today Tim.


SHADOW MINISTER FOR CONSUMER AFFAIRS TIM HAMMOND: G’day Tom, G’day Sam, good to be with you from the great State of Western Australia. A bit colder and damper than usual but we’re getting on with it.


CONNELL: In terms of getting on with it you’ve said the answer to getting the GST disparity fixed is right in front of Malcolm Turnbull’s face and he and Scott Morrison both have the power to get this done. What’s the answer?


HAMMOND: It’s terrific isn’t it? It’s an embarrassment of riches over here at the moment in relation to Cabinet Ministers, they are on the ground thick and fast but I reckon it must be the first time in history the whole cabinet has arrived and not only have we not seen any major announcements but we’ve gone backwards by $2 billion on GST allocations upon news of a population shift. It’s pretty clear it’s another situation where we are seeing the samerhetoric from the Prime Minister where he is coming out time and time again saying don’t blame me, I’m just the Prime Minister, the answer lies somewhere else. The reality is the answer lies with Malcom Turnbull and Scott Morrison – firstly to do something about the negative correction which is going to see the State go backwards by $2 billion at a time when it needs it the absolute least; but secondly there must be something done about this disparity which see us with a fair share. It cannot just be a foreseen consequence of Horizontal Fiscal Equalisation that sees Western Australia scratch around at 30 to 34 cents in the dollar with the nearest neighbour in relation to disparity at somewhere in relation to 80 cents. That can be fixed and it doesn’t need to be kicked down the road any further and it is happening on Malcolm Turnbull’s watch.


CONNELL: You’ve spoken about the problems but what is the actual solution that you would find palatable to all of the States?


HAMMOND: Again, the solution here is to make sure Western Australia finds its way through with an appropriate fair share. There is a Productivity Commission Review taking its processes at the moment but that has been a little bit too little too late. The reality is within Malcolm Turnbull and Scott Morrison’s hip-pocket there is the ability to make sure Western Australia is not left worse off than it currently is. It’s not for me to tell Malcolm Turnbull and Scott Morrison how to go about their fiscal policy but communities expect their leaders to lead and their Prime Minister to be Prime Ministerial and that is just not what we are seeing here. All we simply ask for is a fair share and I’m not terribly fussed about how we get there Tom, what I want to see… (cut off)


CONNELL: We have to be fussed though – how do you get there, where does the money come from and what is a fair share?


HAMMOND:  There is a number of ways you can look at the current disparity and ways which should be examined. We made this point in our submission to the Productivity Commission Review – look at remoteness for example – this is part of our National Platform. At the moment you have a situation where the Northern Territory is getting $4.66 in relation to their GST share and WA on about 34 cents. If you drive across the top of Australia and you go from Darwin to Kununurra it’s about 800km and takes you about eight hours to get there, yet in two different towns, not really that far from each other we see service delivery guaranteed and incredibly disproportionate rates. 34 cents for Kununurra, $4.66 or Darwin and it simply cannot be the case where we measure the GST allocation on the basis of this remoteness principle where we stop just 1000km down the road.  


CONNELL: What would Labor actually do to change that?


HAMMOND: Again, Bill Shorten has been over here, he’s been here nine times for discussions with Mark McGowan, in discussion with the business community, in discussions with the communities themselves about ways in which we can explore addressing the disparity. There is no doubt that Labor is up for the task. What we see now though is a Federal Government in a position to do something about it and I’m not going to tell them how to go about their business. We just want to see results from Malcolm Turnbull.

CONNELL: When you say you won’t tell them how to do their business, you’ve said the answer is right there. Is that answer 70 per cent by 2019 and then creating a floor? Are you saying you can get WA more GST share sooner?

HAMMOND: Well, you have to be very careful with the fine detail because what you will see is Malcom Turnbull has crab-walked away from that commitment at a rate of knots. He has not mentioned that commitment once, he has been here for four days. Its’s time to think creatively, it’s time to do something about it on Malcolm Turnbull’s watch




CONNELL: I do want to move on from this GST issue but just finally, you did say, the answer to getting this fixed is right in front of Malcolm Turnbull’s face. Labor doesn’t have an answer yet, you’re looking at it,  but is that fair to say you still don’t have an answer to this?


HAMMOND: This needs to be fixed now. Malcolm Turnbull is the Prime Minister; he has the capacity to fix it. We just need a fair share.


CONNELL: Alright, you’re looking at how to do that, you don’t have a method yet?


HAMMOND: You’ll find there is no one working harder in making sure Western Australia gets a fair share in relation to this current disparity than Bill Shorten, Chris Bowen and the WA Federal Labor team.


CONNELL: I want to talk about the clean energy target. Labor is offering to adopt this if the Government does. It has a very low component of gas though, what is your opinion within your portfolio of this? Do we need to get a bit bolder with gas exploration and have a Federal policy on this?


HAMMOND: I think we need to be very clear eyed about where we are going in relation to gas. We have terrific opportunities in this country in so far as we make sure we extract our true potential in the gas space. What that also means though is fundamentally we need to keep an eye on making sure we can deliver lower power prices for mums and dads and businesses. Gas is a fundamental part of that of that conversation and at the moment but we have two very different conversations going on in this country; we have a Western Australian conversation in which we have an entrenched gas reservation policy. Whether it has its detractors or not, it is delivering gas which has a knock on effect to power prices over here in WA of prices much lower than the grid lock we are seeing on the east coast. Now again, let’s be mature about this, this isn’t just about chucking rocks at the other side. The domestic security gas mechanism is only just coming into play. Malcolm Turnbull has set himself a very ambitious goal of expecting to see power prices halved. In my view the only meaningful way of making that happen in a hurry is increasing the supply of gas and making sure there is a safety net there. 


CONNELL: Increasing that supply means more gas exploration in the Northern Territory, Victoria and New South Wales. 


HAMMOND: What we are seeing here is a number of reviews taking place, not only in the Northern Territory in terms on the onshore gas potential, but also about to start in WA. And we also see at this stage gas reserves which aren’t being extracted in both New South Wales and Victoria. Again, it is going to require a bit of cohesion in term of the appetite the States are up for in term of releasing those gas reserves.


CONNELL: But you would urge the States to look at it again?


HAMMOND: This is entirely a matter for each State and the dynamics in each State. But our view is very clear and that is we need to be creative and brave about making sure we can harness all of our reserves to a standard of environmental and scientific safety to ensure we can deliver better power prices for mums and dads and businesses.


CONNELL: Tim Hammond, thanks for your time today.


HAMMOND: Thanks Tom.