Sky News Australian Agenda Colin Barnett, Premier of Western Australia 3 March 2013

Interview with Colin Barnett Australian Agenda program, 3 March 2013

Peter van Onselen: You're a mile in front according to the opinion polls yet you lead a minority government. How do you avoid, I guess, complacency either in your own ranks or amongst voters that might decide that you can't lose so therefore they might register a protest vote?

Colin Barnett: There's certainly no complacency within the Liberal campaign. I would think there is at least a dozen seats that could go either way and while the opinion polls would seem to be supportive we will fight this election out right to the end. I've just come back today from Albany and Esperance on the south coast, and we are fighting for every single vote in those electorates.

Peter van Onselen: Is it a case for you that you'd be passionate about getting a Liberal Government on your own, because the National Party over here for our national viewers isn't in formal coalition with you, Brendon Grylls is very much his own man as far as leading the

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National Party goes. Would it matter a lot to you to be able to win in your own right so that you could govern without the Nationals?

Colin Barnett: Obviously I'd like to win as many seats for the Liberal Party as we can to make sure that we defeat Labor. Even if the Liberal Party could govern in its own right - and I think that is unlikely - but even if that was the case we would still govern with the National Party.

Peter van Onselen: Would you look to have as many Nationals on your front bench, for example, or would that all be all up for grabs?

Colin Barnett: It is up for grabs and it really is post election. I'm generally not giving any thought to that.

Peter van Onselen: Something you've been really vocal on is WA getting a fair share of its GST. This is something that the national press has picked up, not just the local press here in WA. Have you spoken to Tony Abbott about this? He did come over and play a role in your election launch. Is this something that you have any commitment from him on?

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Colin Barnett: I've certainly spoken to Tony Abbott a number of times about this and to other members of the Federal Coalition. The point is that I think Western Australia as a prosperous state is prepared to subsidise some of the weaker states, and we have said as a guide that we should at least get 75 cents in the dollar back when NSW, Victoria and Queensland all get over 90 cents in the dollar back. So I think we've been very fair in that sense. I take some heart that the four big states NSW, Victoria, Queensland and Western Australia have all agreed that the majority of the GST pool of funds should be allocated on a simple population per capita basis. Now that is a big step forward and that represents 90% of the Australian population and 90% of the Australian economy. I think Tony Abbott understands and is impressed by that.

We've also said that to get back to a more equitable system, that can be done in a transition over a number of years. I don't want to see South Australia or Tasmania or the Northern Territory lose out, but when you have a situation where Western Australia is down to 55 cents in the dollar and could fall to below 30 cents in the dollar then you've got a major imbalance in the Australian federal financial structure.

Sometimes I think people think, well, you've got all this mining industry in the west, sure we do and that gives us a prosperity, but the GST is state funds to run basic state services like education, like health. And with over a thousand people a week coming into Western Australia there's huge pressure on our school system and our health system to cope with that growing population.

Peter van Onselen:

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But you are worried where whether Tony Abbott is really going to hear this as a federal leader if he becomes Prime Minister, given that he has to worry about votes in Tasmania and South Australia as well along the way if they have a reduced share of GST because of the change? And the reason I ask is because I've asked this question on Australian Agenda over and over again. I asked Mathias Cormann, I asked Julie Bishop, and to be frank they obfuscate. They say that they sympathise for where their own state of WA sits but there's never anything at the end of the rainbow about what they will look to do about it. Whereas you're in a unique position as a leader to be able to talk directly to Abbott and to try to get some sort of a deal from Tony Abbott if he wins the election?

Colin Barnett: No state should experience a loss or a reduction in this GST revenue, and even probably in its share. We're not talking about that, that is not required. But what I'm trying to prevent is Western Australia's share plummeting from currently 55 cents in the dollar to less than 30 cents in the dollar. And that is essential for basic services for people in this state. So done with a little bit of finesse and a bit of forethought it doesn't mean Western Australia wins and Tasmania loses, that is not the way it should play out. And it can be put in place that Western Australia doesn't see plummeting GST shares without penalising other states, because at the moment some of the other states are looking for ever increasing shares of GST. I don't think that's reasonable either.

Peter van Onselen: Just one last question on this, if you like, the Federal compact. Tony Abbott in his book 'Battlelines' talked about the fact that the federation is broken and it needs to be fixed. Kevin Rudd when he came to power back in 2007 said something much the same. What's your view as a state premier about the reality - and it's long been the case -

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that there is a vertical fiscal imbalance there. You have to do most of the spending, you have to do a lot more than that as Western Australia Premier with driving the national economy, but on the flip side taxation collection opportunities for a state government are much more scarce than they are for a federal government?

Colin Barnett: I don't think the federation is broken, I think there are many aspects to that. But certainly the grants commission process of sharing revenues around the states, between the Commonwealth and the states and then within the states that is certainly broken. It dates back to the 1930s. It may have served Australia and Western Australia well over the years but it's failed now and I think every political leader in Australia, if there are honest, realised the grants commission is a mysterious black box. No-one understands it and it is superfluous. We should simply allocate funds out of Canberra that go to the states to where people live and hold some back to look after the weaker economies like Tasmania and South Australia. No-one disagrees with that. And this is not rocket science. I cannot understand why people are having so much difficulty grappling with this. I think it's a fairly simple issue to resolve.

Peter van Onselen: If you go to NSW or really anywhere outside of WA there's this superficial appearance or view, if you like, that WA everyone drives Bentleys; it's a boom state. Even with the heat coming out of the mining boom there this is this impression, I think, that your average Australian has outside of WA. It's obviously not the case, there's obviously internal pressures here as well. How tough is it to deal with, I guess, the two-speed economy at a localised level as opposed to between manufacturing states and a state like WA?

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Colin Barnett: Western Australia is very strong. The economic growth rate is close to 7% so it's twice the rate of growth of Australia. I think one of the telling statistics is that over the last 12 months, throughout 2012, 65% of all new full-time jobs for Australia were actually in Western Australia. So the economy is strong. It's not a booming economy at all and it never has been in this cycle, but there are disparities and many people say: Well I'm not getting the high income that a mining worker might get and yet I see pressure on housing and therefore if I'm renting the price of rentals have gone up. So there is some disharmony around that.

Peter van Onselen: Is there much the Government can do about that?

Colin Barnett: We are building a lot of social housing and affordable housing but there are pressures there. We're putting major investments into hospitals and into schools. For example last year in 2012 when the school year started the Education Department expected an additional 3,000 students, we got 7,000 on day one additional students. So that means a lot of teachers, a lot of classrooms. So they are in a way, however, good problems to have. I'd much rather deal with the problems of a growing economy than to try to deal with the problems of a stagnating or declining economy.

Peter van Onselen:

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But even doing that it is tough, because WA grows like it's a true sort of Chinese-style economy but then it's part of a national economy in Australia that has lag factors in other states. How do you drive the right understanding of that locally when people are also hearing national news about the need for austerity in the face of tough economic times?

Colin Barnett: I think, if I can say so, the population of Western Australia is very informed about the mining industry, Asia, and those factors. And our declining share of GST is probably the prime reason that debt is actually rising. If we had what I would call a fair deal out of GST we wouldn't have the debt issue. So debt has become a constraint on future growth.

But the other aspect, I think, is that Western Australia is very much integrating within Asia. We are the most connected of any Australian state to Asia and I would contend that perhaps Western Australia is 20 years ahead in its relationship with Asia compared to Australia as a whole. And that trend will continue. If people talk about the Australian federation, the lack of resolving some of these fiscal issues means that inevitably Western Australia in a sense pulls away and becomes more tied to the Asian economies. I'm not talking secession, I stress that, but there is an economic movement. It is true. Talk to people in Western Australia in business who work and head some of the biggest companies in the world. We don't talk, with respect, about Sydney or Melbourne we talk about Tokyo and we talk about Beijing and Shanghai, Mumbai and so on. The focus of business...

Peter van Onselen:

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Do you think the population has embraced that, this idea of WA being outward-looking overseas? Because in decades gone by WA has always been known as having a parochialism that makes it look internally, even though that's not always factually true. But certainly that's the perception over east. Where do you see it in decades going forward?

Colin Barnett: I think some people have some sensitivity about that, maybe an element of myopia may be there. But the fact that Western Australia currently now accounts for 46% of Australia's exports, I think by the end of this decade it may be close to 60%. So it just means that people in their daily life, in their jobs, even in their travel are just becoming more and more familiar with Asia. And to put even just one example, in the last year Western Australia had 85 delegations from China all sponsored by basically Chinese Government organisations. And we're learning. It's early days in that relationship but I guess what I saw my responsibility, opportunity, if you like, was to not miss this opportunity. I was absolutely determined that Western Australia would not miss out on this unique decade of the Asian expansion.

Peter van Onselen: Before I let you go, Mr Premier, I've got to ask you about succession planning. This sounds like a weird question given you're running for re-election for a four year term. I don't want to ask you the standard question about whether you're going to commit to run a four year term, I think those questions are silly. What I want to know is what is being planned in terms of succession. It is a fair question because Christian Porter has decided to go federal, Troy Buswell, as good a treasurer as he is, seems to at every opportunity in the media rule out his interest in becoming leader. Once you take those two out of the mix where is the party left other than hoping that you stay on?

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Colin Barnett: Well, I'm hoping to be a premier for a second term, have to win an election first. And obviously a decision about my future I would make if I'm still premier at the time of the next election, and obviously that would be the time. Who might follow me as leader of the Liberal Party, whether it's in Government or Opposition, that's a matter for the Liberal Party room. I'm not going to make the mistake of trying to groom a successor or anoint one, I think that's happened in politics in the past and generally ends in tears. But inevitably someone rises, rises to the opportunity.

Peter van Onselen: Here's a question that I want to put to you: there's no doubt the Labor Party is trying to make something out of Troy Buswell. They think he's unpopular, I don't know whether internal polling on either side shows that up, presumably it does on their side. That's what they are trying to do. Troy Buswell himself, when he came back as Treasurer, tried very hard to make it clear the leadership isn't something he wants. Here's my question for you: put his past antics to one side, why is that the case, if he's able to spend the next four years serving as a competent treasurer, keeping his nose clean other than his politics dealings, why can't he be a genuine leadership option going forward? Even if you answering that puts you in the line of fire from what the Labor Party want you to do.

Colin Barnett: Again, I'm sorry, I'm not going to speculate on leadership. I think John Howard made that mistake at one stage, one of the few bleak spots in a great career as a prime minister. But look, with respect to Troy Buswell he's been involved in a few incidents

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that have got a lot of publicity. I think for myself I regard Troy as a friend. I have great admiration for his intellect, his capacity to work, and particularly his capacity to resolve a problem. He's extremely good at that. He is popular amongst his colleagues and I think when opinion polls are taken and there might be a negative component, I just simply say to people go and watch Troy in a crowded room or making a speech, he's a very, very competent person. I would hope that whether it's now or into the future that people judge Troy Buswell on his abilities, his capacity and his work ethic. Some of the incidents that have happened, not appropriate, I agree with that, but look at his performance as a member of Parliament, as a minister, and he's just a really good guy.

Peter van Onselen: If you had to pick one thing in the next four years, if you're re-elected, that you will be most passionate about trying to implement what would it be?

Colin Barnett: If I can have two. I'd certainly - I think this Government has been extraordinarily successful in getting some of the big and complex projects underway. I think it's vital for the state's future that the work that's been achieved on the Ord River and Gorgon and Wheatstone and other projects - that we do get the Oakajee project going and probably a little bit later James Price Point. I think they are projects, despite all of the controversy, are the two projects that will set Western Australia up for the next 50 years.

On social agenda, and this is a problem that I think is throughout Australia and throughout most parts of the world, I would love to see a reduction in violent crime.

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Peter van Onselen: Colin Barnett, we really appreciate you joining us on Australian Agenda. Thanks very much.

Colin Barnett: Thank you.

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