The Western Australian Premier, Mark McGowan, unexpectedly resigned this week. Almost straight afterwards, there were calls that we unwind the “GST deal” that the former Coalition Government negotiated with WA, and other states, in 2018.
Under that deal, each Australian State would receive a minimum of 70 per cent of the GST revenues raised within its State. (In 2024 the minimum will increase to 75 per cent.) This change was made because, back in 2018, WA’s share of its GST revenues had fallen to just 30 cents in the dollar raised in WA. This was patently unfair. Imagine if the tax office took 70 per cent of your take home pay off you.
WA had got into this situation because of the strength of the iron ore price. The idea is that higher commodity prices should be shared with all Australians. But then there should also be incentives for states to develop their own resources. If a state cannot keep the economic returns from developing its own resources, why would it go through the hassle of developing them in the first place?
NSW officials have been some of the loudest critics of the deal. Yet NSW has refused to develop its own gas resources. Its Narrabri project has been stuck in limbo for 14 years. If NSW had developed its own gas resources, it would be raking in the royalties now thanks to high gas prices. It does not have a legitimate complaint against WA’s fortune when NSW refuses to make its own luck.
These same principles can be applied within states too. Those regions, like ours, that host the mines and create the wealth, deserve a return of that wealth. But the Queensland Government based in Brisbane is robbing Central Queensland way more than Mark McGowan was ever dudded through the GST.
Just a couple of years ago, coal royalties raised $1.7 billion a year for Queensland. A substantial amount of money but nothing like what was to come.
Last year the Queensland Government massively raised taxes on coal. The headline rate more than tripled for coal that was more than $300 a tonne. Combined with higher coal prices, Brisbane has enjoyed a bigger bounty than Jack Sparrow in Pirates of the Caribbean.
This financial year the Queensland Government is forecast to receive $8.5 billion in coal royalties – $7 billion more than in 2021. Across its forward budget years, the Queensland Government will raise an additional $15.8 billion.
Most of this seems to be going to help Brisbane prepare for the Olympics with new stadiums, better public transport and city beautification projects. When pressed about what Central Queensland gets from all of this, the Labor Government responds that it is investing $54 million in the Moranbah hospital.
So we get $54 million back from the extra $15.8 billion. A return of just 0.33 per cent. In other words, we lose 99.7 per cent of the wealth generated in Central Queensland. Just a bit higher than the 70 per cent tax that Mark McGowan used to complain about.
This injustice is why Central Queensland mayors came out this week calling on the Queensland Government to invest more back in CQ in their upcoming budget. As the Rockhampton Mayor, Tony Williams, rightly pointed out “A lot of the money is spent in the southeast; we would like to see a fair return to the communities where the money is generated.”
CQ has Labor MPs representing us. The next Queensland Budget will be delivered in 10 days time. If they are doing their job they will make sure that more of the wealth generated by CQ gets reinvested back in CQ.
