Press Conference – GST top up for WA Hospital Infrastructure

Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia

The Hon. Roger Cook MLA
Deputy Premier of Western Australia
Minister for Health; Mental Health
State Member for Kwiana






WA GST top up, Medicare levy

MATHIAS CORMANN: Good morning everyone. It is a great pleasure to be here at the Joondalup Health Campus together with the Deputy Premier and WA Minister for Health Roger Cook and also my Federal Ministerial colleagues the Federal Attorney-General, Christian Porter, the Human Services Minister, Michael Keenan and the local Federal Member for Moore, Ian Goodenough. In particular, thank you to Kempton Cowan as the CEO of the Joondalup Health Campus for hosting us here today so we can make this announcement. Let me just say at the outset, when we came into Government at a Federal level, the WA share of the GST was projected to fall to below thirty cents in a dollar. It was our Government, at a Federal level, which took action for the first time by effectively stopping the further drop in WA’s share of the GST by making successive Federal GST top-up payments to Western Australia each year over the last three financial years. This year, we are making a further $188.9 million Federal GST top-up payment to Western Australia, taking our total contribution so far to $1.4 billion. We have been able to work together very positively and very constructively with the McGowan Government here in Western Australia to identify the appropriate infrastructure priorities into which these further top-up payments should be directed. Namely, it is the McGowan Government that identified with us three hospital infrastructure projects here in Western Australia that were in need of additional funding. We are announcing today $188.9 million in additional Federal funding, which will go to the Joondalup Health Campus, the expansion of the Joondalup Health Campus, Osborne Park Hospital and Royal Perth Hospital. It has been very good to work with the State Government in relation to this particular announcement. There will be some further announcements to follow over the next few days. In the meantime, this is a very important day for Western Australia, a very important day for the many people around Perth who access hospital care here at Joondalup. Just in closing from me, this is a part of Perth which has experienced significant population growth in recent years and is expected to experience significant further population growth in the years to come. That brings with it significant demand pressures for hospitals like this one. Over the years, Joondalup Health Campus has grown into an incredibly impressive hospital care facility, enabling more and more patients to get care for more and more complex issues closer to where they live. This announcement, the State together with the Federal Government, will build further on that. Without any further ado, thank you very much Roger for joining us here for this announcement today and would you like to say a few words.

ROGER COOK: Thank you very much Mathias. As you know, the McGowan Government has been campaigning since being elected about Western Australia getting its fair share of the GST. Today’s announcement by the Federal Government is another recognition by Canberra that they understand that Western Australia is not getting its fair share of the GST carve up. This is a very welcome announcement, it is great to be able to work with Mathias and his team to ensure that we have important resources put into our policy commitments around Joondalup Hospital, Osbourne Park Hospital and Royal Perth Hospital. This announcement will go a long way to enabling us to deliver, to making sure that we are putting patients first here in the northern suburbs as part of our policies to ensure that we have the health resources where we need them for our strong population growth areas. The $188.9 million contribution will go to the expansion here at Joondalup Hospital. As you would be aware, we have made previous announcements around our desire to grow the services as Osborne Park Hospital, plus the redevelopment of some facilities at Royal Perth Hospital, including the mental health observation area. So these resources will go a long way to ensuring that we can implement these policies and it is all about putting patients first. Can I just say that we are still a long way from home in relation to Western Australia getting its fair share of the GST. We are determined to make sure that West Australian taxpayers have at their disposal the resources that we need to provide the proper services in Western Australia, which we deserve. This recognition today goes some of the way to making sure that Western Australia is starting to get its fair share. The McGowan Government has been working tirelessly with the Federal Government, with Mathias and his team to make sure that we can have strategic resources placed in Western Australia, to ensure that we at least get some sort of top-up in relation to Western Australia’s share as part of our ongoing campaign for Western Australia to get its fair share of the GST here in this state. Thank you very much.

KEMPTON COWAN: Thank you Mathias and thank you Roger. I just think it is a fantastic day for the northern suburbs of Perth. The hospital has been under a lot of pressure for a long time. It is one of the fastest growing areas in Australia and this commitment by both the State Government and the Federal Government will absolutely go a long way towards enabling us to provide appropriate care for the patients of the northern suburbs closer to home. At the end of the day, that is what we are here to do. On behalf of Ramsey Health Care and Joondalup Health Campus and the population of the northern suburbs, I would like to thank the Federal Government for their commitment. To Mathias and Michael Keenan and Christian Porter and Ian Goodenough for their tireless support and also to Roger, the Deputy Premier and Health Minister, who has been the Shadow Minister for many years leading into the election, is now the Health Minister for Western Australia. We have worked on this for a long time and I very much appreciate your support and commitment. So thank you very much.

MATHIAS CORMANN: Now happy to take some questions. I propose that we deal with questions in relation to this announcement first and any other political matters that you might want to ask questions about, if we can take them second and I will let some of our colleagues step aside at that time. Happy to take questions.

QUESTION: Is this really the best option given the GST reform still has not been solved, isn’t that a better solution for WA?

MATHIAS CORMANN: Our Government is committed to long term GST reform, which is why we have initiated the Productivity Commission review into the effects on national productivity and national growth of the current GST sharing arrangements. We did not want to wait for the outcome of that process before taking action, which is why when it was projected that WA’s share of the GST would fall below thirty cents in the dollar, we back then in 2015 made the decision from the 2015-16 financial year onwards to stop the drop in WA’s share of the GST. We stopped the drop in WA’s share of the GST effectively from April 2015 onwards. What we are doing today by making this further top-up payment is effectively lift WA’s share of the GST to fifty cents in the dollar because under the current formula, WA’s share of the GST has started to increase in the ordinary course of events. We agree with the Deputy Premier, we agree with the McGowan Government, that WA’s share of the GST is still unacceptably low and there is a need for medium to long-term reform. I would say that our political competitors at a Federal level do not share that view. Our political competitors at a Federal level have essentially copied our top-up payment methodology and said that that would be the full extent of their solution to WA’s unfair GST share. Whereas we have always said this is a short-term fix. There is a need for medium to long-term reform, but that is something that we will continue to pursue once the report of the Productivity Commission has been received.

QUESTION: So any form of cash splash is not a way of buttering up West Australians to then let them down on GST reforms in the future?

MATHIAS CORMANN: I reject the characterisation of cash splash. This is a very deliberate approach that the Federal Government has taken now for, this is the fourth consecutive year that we have done this. This is not new. It is essentially on the basis that we do not think it is appropriate for WA’s share of the GST to be allowed to fall to below thirty cents in the dollar. That is why from April 2015 onwards, each year in every Budget, we have made a Federal GST top-up payment to Western Australia. We have always worked with the WA State Government of the day in relation to the infrastructure priorities at any particular point in time. We are pleased to announce today that based on the work that we have done with the McGowan Government, that this year the GST top-up payment will be invested in much needed hospital infrastructure. I do not know that you can describe that as a cash splash. Roger and I and my colleagues, we have just visited the hospital. We have talked to doctors and talked to patients and it is very clear that this hospital is doing very important work. It is doing great work. It is doing very important work but it is under significant pressure based on the population growth in recent years and based on the population growth we are expecting into the future. This is a much-needed investment. We are making it very much in cooperation with the State Government based on their advice on where their highest priorities are. From that point of view, I think this is very good policy. It is a very good announcement.

QUESTION: So the announcements that you are making while the Prime Minister is in town, there will be others as you just mentioned, it is not about shoring up seats ahead of the looming Federal Election with this likely to be the last Federal Budget?

MATHIAS CORMANN: After every election we are before the next election and in between elected Governments do the work that they were elected to do. We make decisions all the time about what we believe is in the best interest of our country to put us on the strongest possible economic and fiscal foundation for the future, but also to ensure that we have the necessary funding for social infrastructure, social services and for our national security. We make judgements all the time. It is true that the closer we get to the next election, the more sceptical people become, people like you, that is people in the media. But we are just doing what we are always doing. If you look at what we did last year, last year the Prime Minister and the Premier announced a $2.3 billion infrastructure package for Western Australia, which was also worked through, negotiated and agreed between the Turnbull Government and the McGowan Government. This year we are doing precisely the same. That is what the Australian people would expect us to do. There is a time to fight elections and there is a time to get things done. We are very pleased that the State Government here in Western Australia has been so prepared to work with us to get things done for the benefit of the people of Western Australia. I think that is what people in Western Australia expect their governments to do.

QUESTION: I think the majority of West Australians would actually want a permanent fix to the GST, surely you can acknowledge that?

MATHIAS CORMANN: I have already answered a question to that effect in that…interrupted

QUESTION: But there is no time frames and there is no (inaudible) longer term.

MATHIAS CORMANN: That is why we have initiated the Productivity Commission Review, which will report in the middle of next month and there will be further decisions to be made at that point.

QUESTION: Are you concerned about losing WA seats at the next Federal Election, obviously that has got to concern you surely?

MATHIAS CORMANN: In the lead up to every election, here is a new flash, breaking news, I think Sky News and ABC 24 you have got to put it at the bottom of your screen. ‘Breaking news’ in the lead up to every election, each side of politics would like to win a majority of votes in a majority of seats. That is indeed what we go into elections for. We try to win the next election.

QUESTION: Isn’t this announcement a recognition that there are some seats in WA that are vulnerable, that the Liberal Party is worried about some seats, including the seat of Pearce and the seat of Stirling?

MATHIAS CORMANN: Not at all. This is the Federal Government doing what our Federal Government always does, and that is make decisions in the best interest of the people that we represent. I find it interesting that a Federal Liberal National Government acting on the advice of a State Labor Government is somehow seen as a cunning Liberal Party ploy to win Liberal Party seats. I mean, we have a number of State Labor Members here as well. I think you will find that this is very much a bipartisan announcement that is made here genuinely in the public interest. I know that members of the media are always, it is always healthy for members of the media to be sceptical and ask probing questions, but let me tell you if we were not doing what we are doing here today, we would be letting the people of Western Australia down.

QUESTION: So this is not a cunning Liberal Party plan?

MATHIAS CORMANN: This is a cunning plan of the Turnbull and McGowan Governments to do the right thing by the people of Western Australia.

QUESTION: Just on the Medicare decision, when will funding…interrupted

MATHIAS CORMANN: So have we finished on the hospital? Any questions for Roger?

QUESTION: The Federal funding is not the full funding for Royal Perth and Osborne Park, where is the State contribution coming from?

ROGER COOK: Now obviously we will have more to say about those particular projects in the forthcoming Budget. Obviously, this is an important contribution to those important projects and we welcome the Federal Government’s contribution to them. But there will be more work to do and indeed I have been working up the business case and the costings in relation to those projects, so we will have more to say in the forthcoming Budget.

QUESTION: Is this a better deal than what Bill Shorten was offering when he was here a few weeks ago?

Well, what it is, is a recognition by both sides of politics in Canberra that Western Australia is not getting its fair share of the GST. What this is, is the result of a tireless work by the McGowan Government to put the case to everyone in Canberra that we need our fair share. Under the current arrangements, over the course of the forward estimates, we will still be around about $3.5 billion short in terms of a dollar-for-dollar arrangement for West Australia. Now, whether we get to a dollar in every dollar in relation to GST, time will tell. But this is obviously an important contribution and a recognition that Western Australia needs a better deal from Canberra.

QUESTION: The State Government has not got two bob to rub together, though, so where is the money going to come from for those two health projects?

ROGER COOK: Well, what we are doing and you would have seen that in Treasurer Wyatt’s first Budget, is carefully crafting out Budgets to make sure that we can afford those policies and services that Western Australians count on, but doing so in a way which preserves the long-term financial management of the State. The first Budget went some way to doing that, some tough decisions, but proper decisions to make sure we get the State’s finances back under control and we will be doing that again in the forthcoming Budget.

QUESTION: Will there be cuts to the health budget?

ROGER COOK: What we will be doing in the forthcoming Budget is making sure that we can provide all the services that we need within the State’s financial capacities. That includes health, it include education, policing. All areas of the Government is under tight cost control to make sure that we can continue to provide the services that West Australians want and Western Australians deserve.

QUESTION: How hopeful are you of more Metronet funding from the Prime Minister whilst he is in town? We know that Ellenbrook has long been flagged, I am sure that there are other Ministers up there who would be keen for that as well.

ROGER COOK: Well, Ellenbrook is obviously a very important part. Sorry, let me say that again, Metronet is a very important part of the McGowan Government’s long-term plans for Western Australia and I am sure those conversations are ongoing and if there are announcements to be made they will be done by someone other than me.

MATHIAS CORMANN: Alright, so do you want me to go to the other issues?

QUESTION: I just want to ask you on Medicare, where will funding for the NDIS come from?

MATHIAS CORMANN: If you look at the updates that we have been providing on a regular basis on the state of the Budget you will see that on the back of stronger growth our Budget position has been improving. There was no prospect of us getting the Medicare levy increase through the Parliament anyway. So on the back of a strengthening economy and a strengthening Budget position and strengthening revenue flows on the back of stronger growth, we have made a judgement that we now no longer needed to proceed with the increase in the Medicare Levy in order to fully fund the NDIS. We will be able to fully fund the NDIS without that increase.

QUESTION: So people with disabilities and the sector do not need to be asking questions about the NDIS’ future and its financial position, so that they can be sure?

MATHIAS CORMANN: Well as I have just said, we have made a judgement that on the back of a strengthening economy and a stronger Budget position, we are able to fully fund the NDIS moving forward without the need to increase the Medicare Levy. People in the disability sector would not get any additional security from having a piece of legislation stuck in the Senate which has no prospect of passing the Senate. It is more important for them and for anybody else that relies on the important services, social and health services, that the Federal Government funds that we continue to make the careful decisions on the savings and the revenue side of the Budget, that can pass the Parliament, so that all of those necessary services can be fully funded.

QUESTION: Does the Prime Minister need to spend more time in Western Australia before the Budget and before the next Election?

MATHIAS CORMANN: The Prime Minister often comes to Western Australia. The Prime Minister is about…interrupted

QUESTION: He has not been here for a while.

MATHIAS CORMANN: Well that is actually not quite right. The Prime Minster is about to visit Western Australia again and he is always very welcome.

QUESTION: Do you know how long this trip is that he is doing? Apparently he was due to fly, flying in late this afternoon but flying out tomorrow? Is that correct?

MATHIAS CORMANN: It is probably best if you address that sort of question to the Prime Minister. Any other questions?

QUESTION: Only 24 hours in Perth does not look great.

MATHIAS CORMANN: Any other questions?

QUESTION: Well, just back on the Medicare levy though. The advocates of the disability sector do say, though, that they like the idea of the levy increase because it does give that certainty and you are arguing that the economy has picked up, well economies change, so can you understand why they would have that concern, though?

MATHIAS CORMANN: Well, a levy increase that is struck in the Parliament with no prospect of passing does not give any certainty to anyone. What is incumbent on us is to continue to make judgements to ensure that all of the necessary and important social and health services the Federal Government funds can have their funding guaranteed, which is precisely what we are doing. The judgement that we have formed is that in all of the circumstances, on the back of stronger growth and the stronger Budget position, because of the savings and revenue decisions that we have made in other parts of the Budget, we no longer need to proceed with the Medicare levy into the future.

QUESTION: Who did you pick for the Derby this week?

MATHIAS CORMANN: I support the Eagles, so I very much hope that the Eagles, I am very much hoping that the Eagles make it a fifth win in a row.

QUESTION: Just one from Canberra, sorry Canada’s Senate has voted to condemn the escalating and hostile behaviour exhibited by the People’s Republic of China in the South China Sea. Is this something that the Australian Government (inaudible)?

MATHIAS CORMANN: Look, this is outside my area. I would suggest you ask that question of either Minister Bishop or the Prime Minister.

Thank you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth