The blame game monster returns. Now he’s ANGRY!
The blame game monster is back and it has been munching steroids in its brief absence.
Tomorrow’s Council of Australian Governments (COAG) meeting will be the first following both the NSW and Queensland elections and the subsequent realigment of the national political equation.
The long-standing fixture of state-federal animosity will be intensified by the dominance of Coalition premiers who will have a 4/2 majority.
Last week NSW Treasurer Mike Baird warned that the days of the Federal Government making deals on a wink and a nod with Labor premiers were over. Tomorrow, Julia Gillard will have only the smallest states, Tasmania and South Australia, to wink at.
The mining states in particular, Western Australia and Queensland, will be determined to assert their economic importance and protect funds which they believe the federal government is not entitled to collect or spend.
And the blame game will begin, bulked up by the political anger over carbon pricing which starts in July, the changed political dynamics, and the extra aggression of the resource states.
Expect Prime Minister Gillard to be blamed on a host of funding and productivity matters; anticipate that the Commonwealth will accuse the states of sabotaging a welter of efficiency programs.
The flower of federal-state co-operation nurtured by agreement on national health reform last year didn’t make it through the summer. It has been replaced by disagreements on school funding and the carve-up of some $50 billion in GST revenue, among other issues.
One source of dissent exemplifies the head-butting nature of relations at the moment.
This is the federal mining tax which has roused the jealousies of premiers who believe any revenue from mining should go to them.
It is a disjointed argument. On one hand the Queensland and West Australian leaders fear the tax on big profits will scare off fresh investment. But they also reserve the right to tax mining companies themselves through higher royalties, which would hit miners whether or not they made a profit.
Queensland’s Campbell Newman this week made clear he saw the federal Minerals Resource Rental Tax very much an intrusion on his state’s business.
Mr Newman said that if Queensland did not get what he considered a fair share of the federal tax’s revenue, he would consider increasing royalties on coal. It is as if by fiscal stealth the Commonwealth was dipping into a state government cash stash.
And compared to West Australian Premier Colin Barnett, Mr Newman might be considered an ardent federalist.
This tension will not just make future reform difficult. It will make it more likely that COAG will revisit past agreements which have not progressed as well as some premiers want.
Progress on trimming red tape and creating the so-called seamless national economy has been limited, much to the regret of business leaders who will be in Canberra today for a pre-COAG meeting with the Prime Minister.
As in many other issues, one of the obstacles is the huge issue of carbon pricing, part of the tangle of “green tape” covering environmental matters.
“Discussing green tape without the carbon tax is like Hamlet without the Prince,” said the Opposition’s deregulation spokesman Senator Arthur Sinodinos.
“Business and the states want to discuss the carbon tax - and Julia Gillard refuses to listen. Australia’s competitiveness is slipping, and it will worsen when the world’s biggest carbon tax starts on 1 July.”
All of this is bad news for the interested spectator - all tax payers and those on welfare.
If states and the federal government can’t boost economic performance through efficiency reform, they will get less revenue from the economy. And they will be tempted to get the money they need from greater taxation.
The usual process then is for all involved to point the finger of blame elsewhere.
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