West Australian Premier Mark McGowan has warned the state’s financial could become “more rocky” with a range of state-federal funding arrangements looking very shaky.
He says the Labor government has been left with the worst debt and deficit per capita of any state or the Commonwealth in Australia after the state’s books showed it would be $1.2 billion worse off that predicted a month ago.
The McGowan government also faces a soft labour market.
The premier promised a “tough but fair” budget and one based on spending on what the state actually needs rather than what it wants.
But he isn’t about to go down the path of other states that rely on revenue from the pokies or road tolls.
He said he was fully aware of the evils of poker machines having been brought up NSW and said WA was fortunate not to have any and recommended other states follow suit.
He said one of his top priorities was sorting out WA’s GST where it is getting just 34 cents in the dollar and issued a stark warning to Canberra.
He said the Turnbull government would be punished at the next federal election noting if the state’s election results overlaid federal seats, Labor would win 13 out of 15 seats.
“The GST issue here is a powder keg underwritten by dynamite with a burning fuse,” Mr MGowan told Sky News on Sunday.
He said he has written to Prime Minister Malcolm Turnbull about the issue, as well as having discussions with Opposition Leader Bill Shorten.
“(The prime minister) could send a letter to the Grants Commission today to change the formula to better reflect the financial situation confronting Western Australia,” he said.
He believes the GST carve-up between the states and territories should better reward productivity.
He also thinks the present system is wrong in that it rips out royalty revenue from WA and gives it to other states but doesn’t touch pokie revenue from other states and give it to WA.
If pokie revenue was treated the same way as mining royalties, it may encourage states to ditch their pokie machines, he said.
The Sunday Times says a gang of business leaders, including mining billionaire Andrew “Twiggy” Forrest, intend to fly to Canberra to thrash out a GST fix for the WA state.