It makes a ripper yarn in Western Australia.
Western Australia is being ripped off, according to WA Treasurer, Eric Ripper.
In a colourful statement this week he called for “a complete overhaul of the system for distributing Commonwealth grants to the States’’.
“It is a crazy system that sees WA subsidising the Volvo driving, latte set of the Australian Capital Territory who have the highest per capita income of all Australians,’’ he said. “WA deserves greater recognition of the wealth it generates for the nation. The irony is that with a fairer funding system, WA could generate even greater wealth for the nation.”
This jingoistic tripe is dished out regularly by one state premier or another whenever they see a financial disadvantage to their state or see that a bit of good old Canberra bashing will attract a few votes.
Remember in 1998, NSW Premier Bob Carr put out a newspaper advertisement stating, , “If you never never go, you’ll never never know where $540m of NSW taxes get snapped up every year.” Under a picture of a crocodile it explained, “The shores of Lake Burley Griffin has a more formidable predator than the salt-water crocodile. It’s called the Commonwealth State Grant system and it costs the NSW taxpayer and arm and a leg. Last year, for example, the combined demands of the Northern Territory, South Australia, Queensland and Tasmania put the bite on NSW for a staggering $1.5 billion.”
Ripper spun the same yarn. The grants system “fleeced Western Australians of $374 million this year’’, he said.
Ripper got himself into a big non sequitur. He said all those latte-drinking, Volvo-driving Canberrans had “the highest per capita income of all Australians’’ and so did not need the extra Commonwealth funding.
He misses the very point of federation. The “fairness’’ of the distribution of Commonwealth grants cuts both ways if viewed in Ripper’s simplistic way. On the distribution side, one might argue that the money should be distributed according to population. But what about the revenue side? Surely, if a state or territory contributes a give portion of revenue it should get the same portion back in distribution. Now, as Ripper states, the ACT has the highest per capita income in Australia and the highest gross sate product per head. That means it contributes more to Commonwealth revenue per head in income tax and GST. So surely, it should get a commensurately greater share back.
On the population equation, the ACT has 1.63 per cent of the population yet gets 1.86 per cent of the funding projected under the current Budget. Shock, horror. Subsidy to latte-drinking, Volvo drivers.
Continue reading “2003_03_march_state finances”