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Albanese''s ''red army'' in WA told to put their State first

Albanese's WA Labor MPs Urged to Prioritize State Interests in Escalating GST Battle

In a bold call to action amid rising tensions over Australia's Goods and Services Tax (GST) distribution, Prime Minister Anthony Albanese's contingent of federal Labor MPs from Western Australia has been instructed to place the state's interests above party loyalty. This directive comes as the federal government grapples with mounting pressure from other states to revisit the GST carve-up formula, which has long been a point of contention and a key factor in WA's economic prosperity. The message is clear: WA's "red army" – a nickname for the state's Labor representatives, reflecting the party's traditional color – must champion local needs to safeguard the state's hard-won financial advantages.

The GST, introduced in 2000 as a broad-based consumption tax, generates billions in revenue annually, but its distribution among Australia's states and territories has been a perennial source of interstate rivalry. Under the current system, administered by the Commonwealth Grants Commission, funds are allocated based on a principle of horizontal fiscal equalization. This aims to ensure that all states can provide similar levels of services regardless of their revenue-raising capacities. However, Western Australia's mining boom in the early 2010s exposed flaws in this model, as the state's surging royalties from iron ore and other resources led to it receiving disproportionately low GST shares – at times as little as 30 cents in the dollar.

This imbalance sparked outrage in WA, culminating in a landmark deal brokered by the previous Coalition government under Prime Minister Scott Morrison in 2018. The agreement introduced a "floor" guaranteeing WA at least 70 cents per dollar of GST by 2022-23, rising to 75 cents thereafter, with top-up payments from the federal budget to compensate other states for any shortfalls. This arrangement, often hailed as a victory for WA, has been credited with injecting billions into the state's coffers, funding infrastructure, health, and education initiatives. Yet, it has bred resentment elsewhere, particularly in states like New South Wales and Victoria, which argue that the deal unfairly subsidizes WA at their expense.

Now, with Labor in power federally since the 2022 election, the GST fight is reigniting. Albanese's government inherited a system under strain, with projections indicating that the top-up costs could balloon to $5 billion annually by the mid-2020s. Critics in eastern states, including some within Labor's own ranks, are pushing for reforms to unwind the Morrison-era guarantees, potentially redirecting funds to address cost-of-living pressures and budget deficits exacerbated by the COVID-19 pandemic and inflation. This has placed WA's federal MPs in a precarious position, torn between national party directives and fierce local expectations.

The call for these MPs to "put WA first" stems from influential figures within the state's political and business communities. WA Premier Roger Cook, a staunch defender of the GST floor, has publicly emphasized the need for federal representatives to advocate vigorously for the state's interests. In recent statements, Cook has warned that any dilution of the deal would be seen as a betrayal, potentially eroding Labor's stronghold in WA. The state, which delivered a surprising sweep of seats to Labor in the last federal election – including traditionally conservative electorates like Tangney and Pearce – now boasts a formidable bloc of MPs, often dubbed Albanese's "red army" for their role in securing his majority.

Among these MPs are high-profile figures such as Matt Keogh, the Minister for Veterans' Affairs and Defence Personnel, representing Burt; Anne Aly, Minister for Early Childhood Education and Youth, from Cowan; and Patrick Gorman, Assistant Minister to the Prime Minister, hailing from Perth. Their rise reflects a broader shift in WA politics, where Labor has capitalized on anti-Coalition sentiment and the GST issue to build a dominant presence. However, this success comes with strings attached. Local stakeholders, including mining giants like BHP and Rio Tinto, whose operations underpin WA's economy, have echoed the premier's sentiments, urging MPs to resist any federal moves that could jeopardize the state's fiscal windfall.

The GST debate is not merely fiscal; it's deeply intertwined with WA's identity as a resource powerhouse. The state's economy, driven by exports of iron ore, liquefied natural gas, and gold, contributes disproportionately to national GDP – around 16% despite housing only 10% of the population. Proponents of the current deal argue that without it, WA would be penalized for its success, discouraging investment and innovation in key industries. Detractors, however, point to inequities, noting that states with aging populations or higher service demands, like South Australia and Tasmania, suffer under the existing formula.

Albanese himself has navigated this minefield carefully. During the 2022 campaign, he pledged to uphold the GST floor, recognizing its electoral significance in WA. Yet, as prime minister, he faces competing demands from Labor premiers in other states, such as NSW's Chris Minns and Victoria's Jacinta Allan, who have lobbied for a fairer redistribution. Recent Productivity Commission reviews have highlighted the unsustainability of the top-up mechanism, suggesting alternatives like population-based allocations or adjustments for economic volatility.

In response, WA's Labor MPs have begun to vocalize their stance. Gorman, for instance, has described the GST deal as "non-negotiable," emphasizing its role in funding essential services like hospitals and schools. Aly has similarly stressed the importance of regional equity, arguing that WA's contributions to the national economy warrant protection. These positions align with grassroots campaigns in the state, where community groups and unions have mobilized to defend the arrangement, framing it as a matter of fairness rather than favoritism.

The potential fallout from this internal Labor tussle could reshape Australian federalism. If Albanese bows to eastern state pressures, it risks alienating WA voters, potentially costing seats in the next election. Conversely, maintaining the status quo might strain relations with other Labor governments, complicating national policy agendas on issues like climate change and housing. Analysts suggest that a compromise – perhaps a gradual phase-out of top-ups or enhanced revenue-sharing mechanisms – could emerge, but not without heated negotiations.

Beyond the immediate politics, the GST fight underscores broader themes in Australian governance: the tension between state sovereignty and national unity, the challenges of resource-dependent economies, and the enduring quest for fiscal equity. For WA, the message to its federal MPs is unequivocal: loyalty to the state must prevail. As one local commentator put it, "The red army was elected to fight for WA, not follow Canberra's marching orders blindly."

This escalating battle will likely dominate headlines in the lead-up to the federal budget, where any GST tweaks could be announced. For now, Albanese's WA contingent finds itself at the frontline, balancing party allegiance with parochial demands in a high-stakes game that could define Labor's future in the west. The outcome will not only affect billions in funding but also test the resilience of Australia's federated system in an era of economic uncertainty.

Read the Full The West Australian Article at:
[ https://thewest.com.au/politics/federal-politics/anthony-albaneses-red-army-of-mps-in-western-australia-told-to-put-wa-first-amid-gst-fight-c-19387811 ]