Senator the Hon Mathias Cormann

Prime Minister the Hon. Tony Abbott MP with Senator the Hon. Mathias Cormann, Minister for Finance and the Hon. Colin Barnett MLA, Premier of Western Australia Perth

FINANCE MINISTER: As a Western Australian member of the Abbott Federal Government, it is a real privilege to welcome you here today. This is a great day for Western Australia, a great day for Australia. You would be aware that after the recent COAG meeting, the Prime Minister and the Premier flagged that there would be further bilateral discussions between the Federal Government and the Western Australian Government about how best to provide appropriate support to Western Australia given what has been happening to WA’s share of the GST and what has been happening with revenue from iron ore royalties. Those conversations have been taking place in recent weeks and it is my very great privilege to welcome our Prime Minister here to Western Australia today to make the announcement together with our Premier, Colin Barnett and also the WA Treasurer, Mike Nahan. Without any further ado, I will ask Colin Barnett to talk to us. 

PREMIER BARNETT: Thank you, Mathias and, Prime Minister, welcome again to Western Australia. As everyone knows, Western Australia has fundamentally a very strong economy. We've had strong growth and we will have strong growth into the future, but we have been caught in what I would describe as a financial pincer movement. Our share of GST has been falling successively over recent years and has got down to a level of 38 cents in the dollar. That has never ever happened before in the Australian federation.

I've been complaining about that for several years and finally a Prime Minister has listened and acted and the announcement by the Commonwealth Government to contribute another $500 million to road and transport projects in Western Australia means, in effect, that we will stay equivalent to 38 cents in the dollar even though notionally the GST share will fall next year to 30 cents in the dollar.

So, it helps us get through a very difficult period as a state and I want to thank you, Prime Minister, because other prime ministers have listened but you have been the first one who has actually acted and this extra spending on shared infrastructure projects will mean that the state requirement to spend is reduced, therefore that $500 million will help us get through a difficult year. We'll still have a state budget deficit but it will be significantly less than it would otherwise be.

Into the future, there is still a strong case – I think an overwhelming case – for reform of the GST and again I thank the Prime Minister for his support on that. My long term preference would be that we get to allocating it on a population basis. In the short term, the Prime Minister and I have discussed having a floor at some stage. That would at least be a good step forward. But these road projects are also of immense benefit, extending and widening the freeway, getting some level crossings sorted out, extending the Perth freight system that will take heavy vehicles off suburban roads is a really fundamental improvement to the transport system in our roads. Meanwhile, the state will get on with its public transport projects.

Again, thank you, Prime Minister, for your support – over to you.

PRIME MINISTER: Well, it is great to be here in Perth. It's good to be with my senior Western Australian colleague, the Finance Minister Mathias Cormann. It's particularly good to be with Premier Colin Barnett for what is a very good and strong announcement from a Commonwealth Government which is committed to giving our country the modern infrastructure that it needs with a state government which likewise is committed to upgrading the infrastructure of this great state.

I'm, as you know, keen to be thought of as the Infrastructure Prime Minister and recognising the particular circumstances that Western Australia finds itself in at this time, recognising that without additional Commonwealth support there were important road projects of national significance that might have not gone ahead or gone ahead more slowly. We have committed an additional $500 million to significant road projects in and around Perth. There's the Mitchell Freeway which would not have had any Commonwealth assistance which now will have substantial Commonwealth assistance; there are some other important projects where the Commonwealth is helping. This is what a sensible Commonwealth Government does in recognition of particular difficulties that individual states might from time to time find themselves in.

Before throwing to questions, I want to acknowledge the part that my Western Australian Federal colleagues have played in bringing these issues to my attention. The Foreign Minister Julie Bishop, the Finance Minister Mathias Cormann, all of my Federal Western Australian colleagues have been very concerned about the particular difficulties that Western Australia has found itself in this year because of changes to the iron ore royalty stream, because of changes to the GST.

These are sensible government-to-government arrangements, these are the sorts of things which the Commonwealth does with the states from time to time, but obviously I am conscious of Western Australia's particular position and it is important for a Commonwealth which governs in the interests of all the states to respond to any one of them in its time of need and that's what we've done.
               
QUESTION: Prime Minister, how are you going to make sure that the state follows through on the type of economic reforms that you're looking for?

PRIME MINISTER: Well, I'm conscious, because of the relationship that I've got with Premier Barnett, that this is a government which is committed to economic reform. This is a government which is committed to economic reform and, yes, there are all sorts of things which are in the pipeline but one of the most significant long term reforms we've seen from any state government in recent years is the independent public schools initiative that Western Australia took under Colin Barnett and this is now something which is being emulated right around Australia. A really important long term economic and cultural reform because if we can improve the culture of our public school system we improve the whole human infrastructure, if you like, of our country and this is an important reform spreading around the nation which has been pioneered by the Barnett government.

QUESTION: But is there anything in particular that you've asked for in exchange for this funding?

PRIME MINISTER: There are a range of items which have been informally discussed between the Commonwealth and the West Australian government and I'm confident that this is a government which has well and truly embarked on a reform path.

QUESTION: Can you name any of those? Can you tell us what they are?

PRIME MINISTER: I'm not in the business of offering public advice to anyone. I'm in the business of letting the Australian people know – letting the people of Australia know – that this is a Commonwealth Government which stands by the states in their times of difficulty and this has been a rare difficult moment for Western Australia. Western Australia has, not for nothing, been known as the ‘Golden West’ for quite some time but this is a particularly difficult year for Western Australia and that's why the Commonwealth is standing beside them.

QUESTION: No state has had the revenue growth that Western Australia has had over the past decade. Are you happy with the sort of spending that the Barnett government has racked up over that time?

PRIME MINISTER: Well, I think everyone would agree that Western Australia has been uniquely well run and that Western Australia has a really outstanding record. I'm not in the business of offering public advice to any of the states other than from time to time in connection with particular joint projects that we might have. And I'm really pleased to be able to partner with Western Australia on these important road projects, all of them of national significance, which might not otherwise have gone ahead at the same time and in the same way but for this additional federal assistance.

QUESTION: WA was seeking $660 million. How did you settle on the $500 million?

PRIME MINISTER: As I said, these are important projects and we have made a commitment to them based on the kind of government-to-government discussion which often happens in a federation such as ours. I'm very conscious of the particular circumstances that the West finds itself in this year and that is why I'm even more eager than usual to be as helpful as I possibly can and these are the projects of national significance, this is the quantum of additional funding that we've settled upon.

QUESTION: Prime Minister, how do you think the other states will respond to this? They've said in the past that WA shouldn't get the extra money until they pursue economic reform.

PRIME MINISTER: And as I've said, this is a Government which is committed to fundamental economic reform. It's been a Government which has in many respects led our country when it comes to fundamental economic reform and that's a pathway that we'll continue and obviously the Premier and the state Treasurer will have more to say about that when the state Budget comes down in a little while.

QUESTION: Is this the end of the help or the start of it? Will there be more packages like this?

PRIME MINISTER: A sensible Commonwealth government responds intelligently and appropriately to each of the states when the states have got particular circumstances and given the ups and downs of GST distribution, given the particular circumstances of the iron ore price and the impact on state royalty revenues, Western Australia is in a difficult position just at the moment, the kind of difficult position that this state has rarely been in. As the Premier mentioned, never before has any state been faced with the kind of revenue allocation which Western Australia is facing at this time. So, all the states should take heart from the fact that this is a Commonwealth Government which wants to work with all of them constructively and intelligently in the circumstances in which they find themselves.

QUESTION: Will this payment affect any future Commonwealth payments to Western Australia? For example, when the GST does stabilise in a few years’ time, will it affect what we get in other federal payments?

PRIME MINISTER: What we have done – what this Government has done – by and large with all of our infrastructure payments, is that we've excluded our major infrastructure payments to the states from the GST pool.

QUESTION: Prime Minister, can I ask you about French Ambassador Stephen Brady? Do you have any comments to make about his resignation?

PRIME MINISTER: Well, there is no such thing. I have a lot of time for Stephen Brady. I appointed him our Ambassador to Paris; I have known him for many years. He's a very distinguished public servant – a very distinguished public servant – I’d even go so far as to say that he's a friend of mine.

QUESTION: Did you know that his partner had been asked to remain in the car when you arrived in Paris?

PRIME MINISTER: No. Look, I'm the Prime Minister and I don't normally concern myself with trivia.

QUESTION: Have you counselled the member of your office that apparently told him to keep his partner in the car?

PRIME MINISTER: Again, my understanding is that there was some issue at the level of junior officials and I don't concern myself with these things. All I want to say is that he's a fine servant of Australia – a really fine servant of Australia. He's a friend of mine, always has been, and as far as I'm concerned always will be.

QUESTION: Are you concerned this reflects poorly on you?

PRIME MINISTER: Well, I don't quite know what suggestion you might be making, but no, I'm not.

QUESTION: So when you say there’s no such thing, he has resigned.

PRIME MINISTER: No, he hasn't. Now, I'm happy to take questions on other subjects. We've given this one a good run. Are there any other subjects?

QUESTION: Can I ask you about Victoria?

PRIME MINISTER: Sure.

QUESTION: Will the Government consider helping to fund Transurban's Western Distribution project in Melbourne?

PRIME MINISTER: Well, as you know, the Commonwealth is absolutely committed to addressing the transport infrastructure problems of Melbourne and the thing that Melbourne most needs is the East-West Link. That's what Melbourne needs and the Commonwealth has made an absolute commitment to provide $3 billion towards the completion of the East-West Link because the East-West Link will not only massively improve the transport and infrastructure of Melbourne, but it will create some 7,000 jobs and that's very, very important for Victoria right now. So, we stand ready to provide $3 billion towards the East-West Link. That's a commitment which stands and we’re prepared to work with the first Victorian Government which wants to build the Link.

I notice that the Victorian Government, having refused to build the East-West Link, now seems to want to build the ‘West-East Link’. Now, I can't understand why any government would want to waste a billion dollars of taxpayers' money not to build the east part of the East-West Link and then say that they want to build the west part of the East-West Link. So because the Victorian Government, it seems, would prefer to build the ‘West-East Link’ as opposed to the East-West Link, Victorian taxpayers are a billion dollars out of pocket.

Now, regardless of what the Victorian Government wants to do in terms of the order, there is $3 billion of Commonwealth money which is available to ensure that Melbourne gets the East-West Link, the ‘West-East Link’ that it needs.

QUESTION: So just on that, has the Treasurer written to Victoria asking for the $1.5 billion in East-West Link funding to be handed back?

PRIME MINISTER: The important thing is that Victoria gets the transport infrastructure that it needs and that means the East-West Link. Whether you call it the East-West Link or ‘West-East Link’, it's what Melbourne needs and the Commonwealth is absolutely committed to providing $3 billion towards giving Melbourne the East-West Link.

QUESTION: And Christine Milne has resigned – do you have any comments on that?

PRIME MINISTER: Christine Milne has a distinguished record as a senior member of the Australian Parliament and as the leader of a political party which has considerable influence on the Parliament. Obviously, we come from very different political traditions, but I respect Christine Milne as I respect all senior members of the Parliament. It takes a great deal of commitment and patriotism to offer to serve in the Parliament, to serve in senior levels as Christine Milne has done. It is a testament to her commitment to Australia. Even though we have far more often than not been on opposite sides of most political arguments, I respect her commitment. We've always had good and cordial relations. I understand that she's soon to be a grandmother and that's a marvellous time for any individual and, look, I wish her well in her future.

Thank you.