The WA GST deal has cost almost $23 billion and left other states short. Political convenience is overriding fairness, independent advice and the national interest.
When the Productivity Commission (PC) recently suggested changes to the Morrison government’s 2018 GST deal with Western Australia, the state premier, Roger Cook, jumped into the gutter where he was soon joined by the prime minister.
Cook slagged off on authors of the PC report. They’re “east coast clowns who do not understand WA”, he said, “who would punish WA for its success and simply prop up other lazy states” with changes that are “dodgy, deceitful and quite frankly dumb [and] the only change we will accept is no change.” Of course, Cook doesn’t want to discuss the PC proposals on their merits because that would take him into the vulnerable territory of facts, rationality and courtesy.
Yet Cook’s tactics worked, as Albanese, in a small masterpiece of typically Delphic twaddle, assured him that “…you will get your fair share [of the GST] because of your work and what you contribute to the national economy really counts.” Whatever it means, such blather provides no basis for fairly dividing up GST revenues between the states – it only means that for WA, Albanese will give Cook what he wants – no change.
The 2018 Morrison GST deal with WA was inspired by partisan politics; it has been maintained by Albanese for the same reasons. No price would seem to be too high for WA seats in the federal parliament and to hell with the interests of the rest of the country.
So the PC now says the deal has been an inequitable “costly mistake”. It points out that prior to 2018 GST revenue met 100 per cent of the fiscal needs of all states. The deal, however, means that WA gets 113 per cent of its assessed needs, leaving the other states with 98 per cent of theirs at a cost to taxpayers of $23 billion – pork barrelling on a Gothic scale.
The unfairness and economic ills of the WA GST extravagance have been elegantly and frequently explained by Saul Eslake, most recently in these columns on 20 August 2026 under the heading ‘The PC has exposed the unfairness of WA’s GST windfall‘. It sure has.
Cook’s comments have annoyed the chair of the PC, Danielle Wood.
In a recent speech titled ‘Growing trust and trusting growth: the economic case for integrity’, Wood says that Cook’s “play the man not the ball” denigration of the PC damages “institutional trust” by “placing a question in people’s minds about the impartiality and calibre of the organisation and its work more generally.”
Wood makes the unassailable point that trust and integrity in government are essential to the well-being of society and its economy. If citizens see governments behaving badly they will not trust them to make things better and so, in an unvirtuous spiral, things will be likely to get worse. That is to say, declining trust can become insidious.
While trust in Australian public institutions is reasonable by international standards, Wood cites data indicating it has declined since 1995 and is markedly lower than in 1965. Premier Cook’s low-blow shots at the PC in support of blatant pork barrelling in favour of WA at the expense of other states are another discount of community trust in government and modern notions of “social cohesion” about which the prime minister is so pious.
The business of the PC, and its predecessor Commonwealth organisations the Tariff Board and the Industries Assistance Commission, is inevitably contentious as it gets into questions about the distribution of income and wealth. Manipulation, cajoling and pressure have come with the territory, the 1960s–70s history of which is wonderfully explained by Alf Rattigan, a former chair of the Tariff Board and the IAC, in his book Industry Assistance – The Inside Story.
Rattigan, whose influence on public policy for the better was enormous, says that “It is inevitable in a democratic system that particular interests within the community will organise concerted pressures on government to have decisions made which favour them relative to others…But the unfettered pursuit of self-interest can be damaging to the well-being of the community as a whole…”. Premier Cook should take note, for his parochial boast that he’s “putting WA first” on the GST means he’s putting the Australian community as a whole last, and it’s as well the PC is there to say so.
The PC, the Tariff Board and the IAC have helped make the country’s democracy more robust. In defining and analysing public policy problems and making dispassionate, public recommendations about what best to do, citizens and institutions have been given more scope to be involved, leaving governments better placed to make properly informed decisions. Maybe there’s a lesson here.
For One Nation, a party with a nasty streak, plenty of willed ignorance and without coherent policies, to out-poll the ALP and the Coalition suggests voters are insufficiently involved in and informed about public policies.
In the 1970s, the Whitlam government set up independent statutory authorities to make open public policy advice – for the most part they were retired because their recommendations were not always politically convenient for political parties.
But if authorities on the lines of the PC model could be used to improve public participation and understanding of education, health, welfare, immigration and housing, for example, in ways that strengthened the democracy and societal well-being, then the convenience of political parties is worth sacrificing.
The PC may not for the moment have succeeded in helping to undo the productivity-impeding unfairness of the WA GST deal, but its efforts and those of its predecessor organisations have been overwhelmingly positive and provide an example worthy of emulation in other areas of policy. The desires for political control and the associated irresolution of current political “leadership” are exacting too high a price.
Paddy Gourley is a superannuated Commonwealth public servant.