BEN HARVEY: Let’s do the maths on Anthony Albanese’s GST equation
BEN HARVEY: Every political decision is considered through three lenses: how many votes will it win; how many votes will it lose; and which part of the country will those votes be won or lost in.
Politics is governed by the iron laws of arithmetic.
John Howard’s fatalistic observation about why certain people get elected and why particular laws get passed is a useful reference point for political observers like this columnist.
Electoral mathematics allows you to make sense of even the thorniest public policy issue.
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By continuing you agree to our Terms and Privacy Policy.Where business journalists “follow the money” to find the story, political hacks wanting to get the scoop should “follow the numbers” because that’s exactly what politicians do when deciding a course of action.
Every policy that’s on the whiteboard is scrutinised through three lenses before a decision is made: how many votes will it win; how many votes will it lose; and which part of the country will those votes be won or lost in.
Geography is important because, despite what we’re always told, not all votes are equal.
A policy which pisses off 5000 people in Labor’s safest seat (Fenner in the ACT) could be more electorally palatable than one that turns off a mere 50 punters in Labor’s most marginal seat (Bean, also in the ACT).
Party strategists put all that data and gut feel into a blender, turn it on and hope for one magic number when the answer gets spat out.
The Hitchhiker’s Guide to the Galaxy told us that the number 42 is the answer to the “ultimate question of life, the universe and everything” but for Australian politicians it’s 76, for that’s the number of seats you need in the House of Representatives to form government.
Last week’s release of the Productivity Commission’s review of the GST is forcing the Labor Party to do a monumental amount of adding and subtracting.
It desperately wants to adjust the distribution to the detriment of WA.
The problem is not that “generous” 75¢ floor payment; it’s the no-worse-off rule that requires Canberra to ensure the other States get the amount of GST they ordinarily would have if the floor wasn’t there.
Those top-up payments are sapping the Treasury coffers, with little political upside for the Albanese Government.
Unlike money given to the States under the Federal grants system, the GST is dispersed with no strings attached.
That means no dual press conferences with a premier and the Prime Minister; it’s just the premier.
The money used to top up the States east of the Nullarbor could have gone on nifty Federally funded initiatives with commensurately nifty photo opportunities, but the no-worse-off rule means Canberra is paying for the good PR enjoyed by provincial politicians.
Despite his public utterances to the contrary, Albanese is desperate to tinker with the distribution.
He’s doing the maths to see whether the juice (more Federal money and more Federal photo ops) is worth the squeeze (the ire of those States who lose out).
Exactly which States lose out (and by how much) is the subject of a second round of mental sums.
Does Albanese scrap the floor that has turned Perth into a modern-day El Dorado or does he scrap the no-worse-off rule that keeps everyone else in clover?
To work that out, Labor strategists will be calculating whether welshing on the WA deal will cost more votes than yanking funding from the rest of Australia.
It should be a no-brainer. WA accounts for a mere 16 seats of the 150. Why forsake 134?
Here’s the wrinkle in that logic: junking the no-worse-off rule will probably cost votes in South Australia, Tasmania, Victoria, New South Wales and Queensland but it will definitely cost votes in WA.
A lot of votes.
Sandgropers almost to a person know two numbers to the cent: the price of a dry metric tonne of iron ore and WA’s share of the GST.
Perth is the only place in Australia where more than five people understand the concept of horizontal fiscal equalisation — the distribution orthodoxy to which the Treasury officials who briefed the Productivity Commission are slaves.
The West Australian newspaper appreciates how its readers feel about the issue, which is why anyone who looks sideways at the current system finds themelves in the crosshairs and on the front page.
WA Premier Roger Cook understands the GST is a lightning rod issue for voters, which is why you see him thumping his chest as he rails against “east coast whingers”.
And Albanese knows this is the hottest of hot button issues out west, which is why he has been adamant that “WA will always get its fair share”.
Such is the paranoia of WA voters that even this pledge isn’t good enough; they know that “WA will always get its fair share” is different to “WA will always get at least 75c back for every $1 in GST it generates”.
If Albanese screws WA, it’s entirely possible Labor will lose every seat in the State. Can a party form government without one seat west of the Nullarbor?
Perhaps, but only if the policy decision that cost them so dearly west rewards them richly in the east.
Will Victorians or Tasmanians switch their vote from Liberal or One Nation to Labor because Albo has gamed the GST system to benefit them?
If the money that would have gone to WA goes to them then, at best, it’s a maybe. If the cash gets swallowed by the Feds, it’s a hard no.
Howard’s “iron laws of arithmetic” are creating quite the pickle for Albo but the good news for the PM is there might be a third way.
He could keep the 75¢ floor and the no-worse-off rule but quietly kibosh any Federal grant money earmarked for WA.
The spectre of Roger Cook complaining about not getting joint funding for a highway most people won’t use is something Albanese can probably live with.
Whether WA punters are politically astute enough to realise they are still being screwed — just in a different position — remains to be seen.
