28 March 2017
Transcript - #2017052, 2017

Interview with Adam Steer, ABC Darwin

SUBJECT: Northern Territory’s share of GST

ADAM STEER:

Scott Morrison is the Federal Treasurer. Treasurer, good morning.

TREASURER:

Good morning, Adam.

STEER:

Over the weekend the Chief Minister Michael Gunner said he agreed with the front page of the Northern Territory News calling you, the Prime Minister and Senator Nigel Scullion bastards. Was he right? Are you bastards?

TREASURER:

I think that’s a pretty unhelpful way to go about dealing with difficult issues. What has occurred is a result of an independent formula done by the independent Commonwealth Grants Commission, a process that every Northern Territory Government has supported for years and years and years. The change is a reduction of $269 million compared to last year, in one year. The assertion about $2 billion in cuts over four years is just simply not true. There’s nothing that I’ve seen that gives any basis for that claim. This is a function of the independent formula which all states and territories have supported. I remember when Western Australia were first hit with what – I mean, their relativity went down to less than 30, point-3-0 – remembering that the Northern Territory is at 4.66 now. When it went down there, every state and territory, including the Northern Territory said there should be no special arrangements for Western Australia. This is an independent process, every Treasurer from every Government since the introduction of GST has run that system.

STEER:

The CGC itself says the Northern Territory is significantly affected by a higher proportion of indigenous persons relative to the average in other states, there’s about a 30 per cent indigenous population here compared to around 2.5 per cent in each of the other states. It says itself that that makes it significantly difficult to compare it against other states or territories when we are working out what slice of the GST we’ve got.

TREASURER:

I think that’s why the relativity has the Northern Territory at 4.66, it has Western Australia at 0.34, it has New South Wales at 0.87, it has South Australia at 1.44. So the very real differences and challenges faced by the Northern Territory have always been recognised by that formula, it has always been above four. In some years it has jumped quite significantly, in other years, if you go back to 2008…

STEER:

Are you saying Treasurer that the Northern Territory Government…

TREASURER:

I don’t recall there being a great deal of concern being expressed at that time.

STEER:

Treasurer, are you saying the Northern Territory Government has just pulled the $2 billion figure out of its hat?

TREASURER:

I don’t know where they’ve got it from. They didn’t get it from us.

STEER:

The Northern Territory Government is claiming you are ripping a projected $2 billion out of the Northern Territory economy over the next four years…

TREASURER:

It’s just not true.

STEER:

What do you say to Territorians whose jobs may now be at risk?

TREASURER:

I’m saying that that information that you’ve just read out is not true. The one change that has been made on the GST relativity is in one year. And it’s a reduction on the previous year of $269 million in one year. These are updated every year, and I’ve had some very useful meetings over the last little while. Of course, Senator Scullion – who has been tireless on this – I mean, he is on my case about this as you’d expect him today be, as Western Australia…

STEER:

Well, he hasn’t spoken to the media at all over the last year.

TREASURER:

… Nicole Manison, I had a very constructive meeting with last Friday. She has raised I think some issues, particularly around indigenous programmes, which I was very happy to follow up with, and we’ll look at that. I think Nicole, I welcome her taking a constructive approach, and I think the unconstructive approach of juvenile name calling, I just don’t see how that helps people in the Territory.

STEER:

The projected information, $385 million in 17/18, $438 million in 2018/19, $530 million in 19/20 and it goes on further.

TREASURER:

None of that has come from us, Adam. That is this is the point. There is one number that we have provided and that is…

STEER:

How much then are you projecting?

TREASURER:

…for the 2017/18 year the allocation of the GST, remembering all of the GST goes to the states and territories. None of it comes to the Commonwealth, it is all distributed to the states and territories based on an independent formula which the Northern Territory themselves have said they have never wanted changed in the past. So, that is the position of all the states and territories – including Labor states and territories – who have refused to support changes where other states have been affected in the past as well. So, $2.921 billion is the figure for 17/18…

STEER:

How much are you then projecting Treasurer will miss out on?

TREASURER:

…and $3.19 billion was the figure for 16/17. They are the only numbers that have come out from the CGC.

STEER:

Can the Northern Territory request top-up payments if they don’t think it is enough?

TREASURER:

I had a very constructive meeting with Nicole on Friday and Senator Scullion I have met with on several occasions about this. We will continue to have those discussions in good faith.

STEER:

The Northern Territory Government now says it might have to borrow up to another $2 billion to cover the expected loss – would that be wise?

TREASURER:

That is a decision for the Northern Territory Government – not the Commonwealth Government. The Commonwealth Government is currently borrowing money to pay for welfare payments around the country as well as other important spending programs. That is what happens when you don’t have a surplus. The reason we don’t have a surplus at the Commonwealth level is because the Rudd-Gillard-Rudd Government stripped the Budget.

STEER:

Are you just forcing the Government, the Northern Territory Government’s hand, to lift its moratorium on onshore fracking?

TREASURER:

Again, that is a decision for them. I am not forcing them to do anything. The Commonwealth Grants Commission, through an independent process, has looked at the relativities of how GST is distributed and that is the figure they have arrived at. Now, that is a decision of that independent commission. It is not a decision of the Commonwealth.

STEER:

Can you just clarify, Treasurer, how much will the Northern Territory Government be getting from GST over the next four years – a projected amount?

TREASURER:

They are not done on a four-yearly basis – that is my point. They are reviewed every single year and the only figure that has been provided is for one year – 2017/18 – and that figure is $2.921 billion. That is a reduction of, it’s a significant reduction, I am not saying it is not, but it is $269 million – it is not $2 billion.

STEER:

The Government does have to, you know, it has got a Budget that is running a big territory. You can’t just look at one year. It does have to have forward projections.

TREASURER:

The point that is being made is that the Commonwealth Grants Commission has made cuts over four years and that is just simply not true.

STEER:

Meanwhile, the Northern Territory’s population is decreasing, which is also an outcome on GST revenue. Your Government released its White Paper on Developing the North in 2015. Part of that was $5 billion in concessional loans. Can you confirm how much of that $5 billion loan has been approved?

TREASURER:

I couldn’t give you those figures off the top of my head. I don’t have them in front of me but I am sure if Minister Canavan were to come on your program, he could give you a very detailed analysis of how that money is being acquitted. But you are right, it is this Government that has put those sort of resources behind developing the North.

STEER:

Well, we understand none of that $5 billion – not a single dollar has been approved for loans.

TREASURER:

I will allow the Minister to be able to go into the details of his program.

STEER:

Federal Treasurer, good to talk to you today.

TREASURER:

Thanks very much for your time.