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Everything Perth

Focussing mainly on issues relevant to Western Australia, Everything Perth is a blog by Jason Smith. His posts explore modern society, culture, law, politics and family through the lens of a life lived in Perth. 

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Why do we get so little of our GST back in WA?

Each time you purchase nappies, a can of soup, or a cup of coffee, a tax of 10% on top of the actual price gets added. It’s called GST. You know this. I know this. We forget about it because the government knew you’d complain about it if it wasn’t built into prices displayed, so they made it illegal for retailers etc. to display the pre-GST price.

So for every $100 of goods you actually purchase, you pay another $10 on top to Canberra. Now in theory, the Federal Government is supposed to then send that money back to the state so we can run the schools, build the hospitals, and fix some pot holes. But instead of sending the full $10 back, the clever system has WA as only getting back $3.50.

Why on earth would WA, which has a struggling economy, lower incomes, lagging infrastructure, vast distances requiring incredible amounts of roads and maintenance, suicide rates in remote areas worse than any third world country, and tanking house prices, be entitled to only $3.50 for every $10 we chuck into the kitty?

Why on earth would the eastern states be getting OUR money to fund their roads, tourism programs, and what have you? Blind Freddy could tell you WA has been desperate for infrastructure improvements for a long time.

Moreover, if the money is spent here, then it stands to reason that the economic activity is creating a general burden on the system here. Logic would tell you this, if nothing else.

Currently the Liberal party are patting themselves on the back over a system that promises to return to us $7 of that $10 (of our own money) that we sent east, at a minimum. If economic projections go perfectly over the next 9 years (and we all know they always go perfectly) then we may even get up to $8.30 of our $10 back.

Why on earth would we consider that a good deal? Clearly nothing short of ALL OF IT sent back to WA is what one might consider fair.

And as far as I can tell the Labor fellow hasn’t even promised to increase it AT ALL! Of course, he’d have a hard time explaining how Australia’s socialist party suddenly believes in returning tax to the people who paid it at a fair rate.

We do not benefit from Victoria building roads. We don’t benefit from South Australia being flush with cash and propping up their economy with our money. There’s no logical reason I can see as to why WA is morally obligated to prop up the eastern states and forgo taking care of urgent needs at home.

So why do we then have a system that allows this to occur? Everyone in WA is outraged. Why is there no outrage manifested in Canberra over this joke.

As I see it, firstly, it’s owed to the “one vote one value” policy Australia boasts. It makes sense on in theory, but in how it plays out results in the lower house (House of Representatives) in Canberra, where most of the action happens, having few members who would advocate for a system that returns the money fairly to each state or territory.

Here’s the current numbers of reps from each region. It changes a lot as members keep resigning when they lose the Prime Ministerialship or they discover they have allegiances to other countries.

  • 2 Australian Capital Territory

  • 46 New South Wales

  • 2 Northern Territory

  • 30 Queensland

  • 11 South Australia

  • 5 Tasmania

  • 37 Victoria

  • 16 Western Australia

So as you can see, we’re quite out numbered. 16.

This leads me to my second point; why haven’t the eastern state MPs wanted to fix WA’s ailing problems anyway? It’s the right thing to do, clearly.

I have a strong suspicion as to why this is the case, albeit with no hard data.

I developed an understanding of how the eastern state residents see WA from some time spent living in Queensland. I also have a lot of family over east, being born in Victoria myself.

The most succinct way I can describe it to you is: They just don’t care.

It’s not that they’re hateful, spiteful, or discriminatory in any way. Conversations usually go something like “Perth? Oh yeah. I know someone who went there once.”

They’re perfectly polite. But you might as well be talking about Cape Town.

I can perhaps liken it a little to how you feel when you hear about a car bombing in the middle east. It’s very far removed from your day to day life, has zero impact on you, and is a place you’re literally never going to visit. So you allow yourself to feel a tiny moment of “ah that sucks” and then you forget about it.

And why SHOULD the eastern states residents spend their waking hours wondering how to care better for their cousins across the Nullabor? I don’t think it’s reasonable to expect them spend their waking hours advocating for increased tax distribution to WA.

Can you imagine an MP trying to convince folks in South Australia that they should receive less money because people in WA deserve it? The last time they heard anything about WA was that we were having a mining boom or something and cleaners were earning $300,000 per year leaning on a mop in the desert. Non West Australians haven’t been keeping tabs on our economy since it was a trendy gold-rush-esque story on the nightly news. That South Australian MP is not going to get voted back in if they take up the fight for West Aussies. Nor is any other non-WA MP.

So what are our options then?

As I see it, Western Australians have a pitiful few potential tools at their disposal.

  1. Secede. (Hey, it was good enough for Lang Hancock)

  2. Change our collective vote each election as a way of protest.

  3. Make more noise. (Squeaky wheel theory)

  4. Pay cash or Bitcoin for literally everything and keep it all off the books so Canberra gets bupkis. (I mean, some people think (not me of course) it’s un-Australian NOT to offer the lawn mower man cash)

Not a lot of great options there. But, our wise and learned forbears who decided to join this blessed Federation certainly knew something like this might happen. They ensured a little something, perhaps vague and broad, was included to reduce the likelihood of, in my eyes, things like this from happening.

So maybe we need an option 5.

5. The courts can help us out.

Section 51 ii of the Australian Constitution reads that the parliament has the power to make laws with respect to “taxation; but so as not to discriminate between States or parts of States;”

I don’t know about you, but I’m feeling rather discriminated against.

Why does Bitcoin have value?

The Liberal party has a grass roots branding problem