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Shorten urgently needs a position on WA’s GST share

After every Council of Australian Governments meeting, there is a mid-afternoon press conference.

The prime minister will troop in, followed by eight State and Territory leaders, with the head of the Local Government Association bringing up the rear.

The PM of the day will start off saying what a wonderful meeting it was, how agreement was reached across all these thorny policy areas and COAG had decided to task a report to come back at a later stage on reform of Commonwealth-State relations.

Then premiers will take their turn, talking about how wonderful it is that everyone is co-operating, while the poor old mayor sits there mute, just happy to be at the big people’s table.

Colin Barnett would usually be one of the last premiers to speak, and more often than not he would shatter any illusions that all was well in the Federation.

Glowering, a typical Barnett spiel would include an explanation of why WA was going it alone on health, or education, or disability services, and include a denunciation of the dud deal WA got over the GST.

“I must have been at a different meeting,” was how Colin Barnett pithily summed up the April 2015 COAG gathering.

So it would be ironic then that the demise of the champion of addressing WA’s GST injustice may hasten changes to how the consumption tax revenue is carved up.

Mark McGowan’s thumping win on Saturday changes the equation for both the conservative and Labor sides of politics.

The Barnett Government suffered plenty of self-inflicted wounds that contributed to its defeat but Malcolm Turnbull’s hollow words on the GST were a bitter disappointment that a badly bleeding administration did not need.

It looked like Turnbull in August last year had finally heeded the message and pledged to introduce a floor below which a State’s share of GST payments could not fall.

West Australian Liberals were licking their lips with satisfaction at their win, but when the Prime Minister made his one and only campaign visit to Perth last month, he indicated the floor would be at least three years away in 2020 when WA’s share of the GST was forecast to recover to about 70¢ (it may actually take longer now given the rally in iron ore prices).

The PM had actually not changed his commitment — he had initially said it would take a few years — but rightly or wrongly, any delay was seen as an insult to Barnett in the heat of an election campaign.

While two one-off bailouts have been welcome, the Federal Liberals inaction to address the root cause of the grievance has certainly been a betrayal of West Australians despite a pattern of sustained loyalty.

Consider this. In 2007 when Kevin Rudd was riding high in the polls, West Australians were resistant to his charm and actually sent back an increased number of Liberal MPs, despite John Howard being turfed from office.

In 2010, the backlash to Labor’s mining tax boosted the Liberal Party war chest and saw them pick up another seat.

In 2013, with Labor already reduced to a rump of three seats, the Liberals got a thumping 58 per cent of the two-party preferred vote.

And in 2016, when the Liberals were seeing MPs shredded in NSW, Queensland and Tasmania, the damage was much more contained with Labor only gaining two WA seats. If Swan and Hasluck had fallen into Labor hands, we could be talking about Prime Minister Bill Shorten.

But what has been the pay off? Sure, West Australians might make up a fifth of Cabinet but on the State’s GST bugbear, all we’ve got is a promise that maybe something will be done down the track if everyone can kinda agree.

Saturday’s bloodbath for the Liberals though should prompt some urgency to Turnbull’s thinking.

At the next Federal election, Labor will be targeting Christian Porter’s marginal seat of Pearce (3.6 per cent), Ken Wyatt’s Hasluck (2 per cent) and Steve Irons’ Swan (3.6 per cent).

Given the size of Saturday’s swings, Michael Keenan’s Stirling (6.1 per cent) and Andrew Hastie’s Canning (6.8 per cent) could also be in play.

That’s five seats to be defended. Compare that with Tasmania where there are no lower house Liberal MPs, or South Australia where just two have a margin below 5 per cent.

With a strong possibility that Australians could be heading to the polls during spring next year, the Government has more skin in the game in WA to fix the GST distribution now instead of trying to avoid upsetting the mendicant States.

For Porter in particular, who has higher ambitions, addressing the State’s GST injustice is a compelling case.

McGowan’s win also puts pressure on Federal Labor to change tack over the GST.

While Shorten has offered sympathy, Labor’s position has essentially been to WA to “suck it up princess”.

When Julia Gillard was PM, Labor relied on the Greiner/Brumby review as cover for maintaining the status quo, which argued the cross-subsidisation of smaller States was crucial to providing equity.

The realpolitik of it saw Labor having to look after their MPs in SA and Tasmania as well as friendly State governments.

But now Shorten has to be wary of not snubbing a fellow comrade in McGowan when he comes to Canberra. Shorten, who prides himself as a consensus-style politician, will not want to get into blues with premiers.

Secondly, the same electoral maths — five winnable Liberal seats in WA, plus trying to hold Perth and Cowan — makes it imperative for Shorten to broaden his appeal to West Australians.

It would be a delicate path for Shorten. Imposing a floor essentially does mean someone will be worse off; for every extra dollar WA is allowed to keep, there is one less dollar floating around in the system to hand out to another State.

The calculation would have to be where he finds the money.

Does he take big chunks out of recipient States SA, Tasmania and the Northern Territory (all jurisdictions where Labor has the majority of MPs)? Or try to shave a few bucks across all the States so that they don’t really feel too much pain but collectively adds up to a big difference for WA?

Whatever Shorten chooses, he no longer has the luxury of not having a position.

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