What is it with federal politicians and Western Australia? The major parties fall over each other to fawn over the state and its residents. With just sixteen seats, barely 10 per cent of the total 150 in the House of Representatives, numbers alone don’t explain it.
Until 2022, WA was reliable Coalition country. The last time it had returned a federal Labor two-party-preferred majority was in 1987, when Bob Hawke, a Victorian MP who grew up in Perth, was prime minister. Under opposition leader Kim Beazley in 1998 and 2001 the party didn’t too badly there, but after that, fuelled by the mining boom, WA crept further and further into the Liberals’ arms.
Talk of carbon pricing and a super profits tax under Kevin Rudd and Julia Gillard only made things worse, and at both the 2010 and 2013 federal elections Labor won only three seats, the lowest proportion in the state since Malcolm Fraser’s 1977 landslide.
WA’s reliable rejection of federal Labor elevated it to mythical status in some conservative circles — those plucky individualists set a fine example to the rest of the country! — but it came crashing down in May 2022. Partly or probably mostly fuelled by prime minister Scott Morrison’s Covid feud with their popular Labor premier (and all state premiers generated popularity during Covid, none more than Mark McGowan), Labor managed an astonishing 10.6 per cent two-party-preferred swing. Albanese, encouraged by polling, had devoted quite a lot of time and energy to the state, but no one expected the huge vote. It yielded four new seats.
Perhaps more important was the two-hour time difference between the east and west coasts on election night, which made it appear as if Western Australia alone decided the result. Didn’t those four seats push Labor from possible minority government to a clear majority of seventy-seven out of 151? Ever since then, Albanese seems to have had an almost superstitious psychological dependence on the state. The result, in the words of Tasmanian economist and fierce GST-allocation reform advocate Saul Eslake, is that “whatever Western Australia wants, Western Australia gets.”
In the Albanese government’s landslide re-election last year, WA joined the swing, but just. Off a high base, it shifted by the smallest amount of all states (Northern Territory moved a little to the Coalition) and slipped from biggest Labor vote among the states to fourth place. In fact, excluding sophomore surges across the four 2022 gains, WA moved a little to the Coalition. Still, Labor increased its WA tally to eleven out of sixteen.
We are currently in one of those kerfuffles about GST distribution. The focus is the Morrison government’s 2018 agreement locking in for WA at least 75 per cent of GST collected in that state, with no other state or territory worse off. This means — and will continue to mean while demand for raw materials remains high — the Commonwealth pays off the other states to the current tune of around $6 billion annually.
Eslake makes the point, almost heretical in some quarters, that minerals in the ground are the product of good luck rather than the hard work of West Australians. Furthermore, for most of the 125 years of federation, net flows have been the other way, with easterners subsidising the west.
Still, WA legally owns those minerals. And it is currently a net contributor to the national pot.
From the media coverage, you could be forgiven for thinking that all the money sent from Canberra to the states and territories comes from GST revenue; but only around half of it does. A lot of the rest is also a matter of regular friction, with hospital funding in particular an on-rotation irritant. Entangling its new GST with these ongoing Commonwealth–state stoushes — what was the Howard government thinking?
Western Australia and Eslake’s home of Tasmania can be seen as two sides of the “outlier” coin. One routinely sits at the bottom of gross-state-product-per-capita tables, the other at the top, but their people share a propensity to resent the rest of the country. Tasmania gets back more than its residents contribute to the GST (and other tax) kitty, while WA gets back less. Both their governments insist they’re getting a raw deal. Tasmania has only five House seats, though Taswegians have been known to swing quite dramatically (and, being little-surveyed, unexpectedly) at federal elections.
It’s not just Eslake of course. The Productivity Commission set the hares running with its interim report on the “the 2018 GST distribution reforms,” describing them as a “costly mistake” that discourages productivity-enhancing initiatives. If WA premier Roger Cook’s spray about “east coast clowns” and their “dodgy, deceitful, and quite frankly dumb” findings was, well, “colourful” even by that state’s standards, the prime minister jumping on board to sneer at the commission’s “economic rationalism” was just unedifying. (Needless to say, if the two leaders were from opposing political parties their rhetoric would have been directed at, or at least included, other targets.)
The question for us here is: does the incessant kowtowing to that particular state make sense politically at the federal level? The accepted answer is yes: West Australians are easily provoked into thinking they’re being treated unfairly, and vote accordingly. People in Victoria and New South Wales in particular just don’t behave like that. And the fact that Morrison’s extra largesse is shared across seven other states and territories negates any tendency to feel singled out.
So it seems like a no-brainer: you can keep sandgropers happy without upsetting the others. But electoral equations aren’t always so simple and linear.
First of all, we don’t know exactly how many seats a GST betrayal would cost the Albanese government in WA. Several? Half a dozen or more? The relative movement at the 2025 federal election suggested the gloss was already wearing off Labor, and much of it relied on the state government anyway. That asset is much depleted from those dizzying Covid heights and will be a doddery eleven years old in 2028.
Albanese’s stature across the country, meanwhile, sits at an all-time low, and performative, self-satisfied grovelling to a small section of the community can’t be narrowcasted. Voters elsewhere might not march in the streets about the GST deal, but they can take notice and perceive a purely political decision from a prime minister who at times doesn’t seem to stand for much except being in power.
Yes, you can make the same argument about the Coalition and One Nation, which also support continuing the 2018 GST deal, but less is expected from them. As with all oppositions, they are untried (and voters already have misgivings about them). Incumbents usually win elections because they are the safe, grownup option, often making unpopular decisions in the national interest.
State and territory leaders are demanding a guarantee of a continuing top-up after 2030. South Australia’s Peter Malinauskas reckons voters are paying attention. “I’ve actually now got constituents in South Australia asking about GST revenue,” he says. “That didn’t happen before [but now] they understand that it is intrinsically linked to our capacity to deliver services they rely upon.”
There is one good reason, though, for Albanese not to give in to “economic rationality”: changing the formula would represent another dishonouring of a high-profile election promise. As a rule, politicians get away with breaking these commitments, but you can have too much of a good thing, and coming so soon after the capital gains tax and negative gearing backflips would be damaging, and not just in one state. Those changes are still contentious, and will likely remain so until they begin operation on 1 July next year.
By then the next election campaign will be on the horizon. The federal budget is just going to have to get by without that $6 billion for the foreseeable future. •
