It has been nine years since WA got more than 70¢ back for every dollar of GST paid by the State’s consumers.
Back then, the State economy had expanded 4.3 per cent even though the world was in the grip of the global financial crisis.
WA’s economy was the fastest growing in the developed world, apart from China.
The Budget would show a narrow surplus while net debt was a smidge under $12 billion.
Nine years on, the Budget is deep in the red, net debt is on its way to $39 billion, the State economy has only just emerged from its first contraction on record, unemployment is above 6 per cent and wages are stagnant.
Not all of this is due to the GST debacle that saw vital cash siphoned out of WA just as the economy turned south. But it exacerbated the problem, tied the hands of the State government and delivered real pain to ordinary West Australians.
The Bill that sailed through the Senate yesterday won’t resolve all the economic and budget issues still evident in WA.
A 70¢ floor that will lift to 75¢ midway through the next decade, however, will ensure other States and Territories don’t go through the same sort of financial troubles endured by WA.
And the move by the Federal Government and the Labor Party to promise GST top-ups to WA over the next two years means that 70¢ floor will effectively start immediately.
While the Government can rightly lay claim to success with its GST Bill, the delay in getting to this point and the damage that caused cannot be ignored. Nor the way the former State government budgeted like the GST would be fixed several years ago, ignoring the reality in front of it.
Labor’s initial indifference to WA’s plight under Kevin Rudd and Wayne Swan is a continuing political sore that the ALP has only just started to counter.
It means neither side of politics can rest even with the resolution of the biggest fiscal problem this century. Wages growth, jobs, economic diversification, infrastructure planning, investment in social services such as education and health — none of that is magically fixed with the resolution of the GST.
There are still plenty of issues for all sides of politics to confront.