Federal Finance Minister Mathias Cormann hopes the Perth Freight Link will eventually go ahead and looks forward to the Productivity Commission’s review of GST distribution.
Acknowledging WA’s share was unfair, the WA Liberal senator told more than 130 business leaders and politicians at CCI’s Budget Breakfast at Crown on Monday that the venture was Infrastructure Australia’s highest priority project not under construction.
CCI chief executive officer Deidre Willmott said that while the WA business community was thankful for the $226 million GST top-up payment to be spent on road and rail projects—announced in last week’s budget—the state wouldn’t need a top-up if the GST model wasn’t broken.
She said the current GST model removed incentives for states and territories to grow and develop their resources and said CCI was calling for a “partial equalisation model” that would benefit the country by encouraging all states to develop their own industries.
Cormann said he could see Willmott’s point and looked forward to hearing the Commission’s findings, due to release findings by next January.
“The Australian Government has taken the view for some time the WA share of the GST is unacceptably low, that’s why we have over the last three years topped up the budget with $1.2b in payments,” he said.
Cormann said the inquiry into the impact of GST sharing arrangements would focus on what “incentives and disincentives there are or should be for every state and territory to develop and grow their economy, because the point that Deidre just made is absolutely right.”
While $1.2b previously allocated by the Federal Government for the completion of the Perth Freight Link has been reallocated as part of $2.3b road and rail infrastructure funding, Cormann said he was the road’s biggest supporter and hoped the McGowan Government “would see the light” and one day go ahead with the project.
“The Australian Government remains committed to the Perth Freight Link project and in our budget what we have done is list the $1.2 billion funding allocation to the PFL project as something that will be available should a current or future state government of WA be prepared to work with us to make it happen,” he said.
He said the PFL was still Infrastructure Australia’s highest-priority infrastructure project not underway and was fundamental to getting products to and from Fremantle Port.
“We are not committed necessarily to a particular route, but we are a trading state and we have to get product to market. We’ve got to move product that comes in from overseas across Perth and WA,” he said.
“Obviously, I would like it to have happened over the last three years but it didn’t and probably won’t over the next four years.
"There is a need in WA to get our product to market in the most efficient, safe and least congestive way possible."
Cormann also said the global economy was looking positive for the first time in years, with International Monetary Fund slightly upgrading the economic growth outlook at a recent meeting he attended in Washington.
“Things are looking up in the US and in Europe and holding up much better than people might have thought in China and parts of Asia, India is also looking good. For trade for WA that is very, very good news. If the rest of the world is better, we do better.”
Cormann also said the Government was committed to getting the company tax rate down to 25 per cent as part of its 10-year tax plan and said Treasurer Scott Morrison had introduced legislation to the House of Representatives last Thursday.
He said with the UK set to drop the corporate tax rate to 17 per cent and the US to 15 percent, Australia need to remain competitive internationally to attract investment.
“At 30 per cent we are excessively high. At 25 per cent over a 10-year period, if you look at the OECD, we would be middle of the road. We wouldn’t be leading the pack and we don’t think we want to be too far behind middle of the road.”
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