Western Australia is being penalised for its strong economic growth with another dramatic slash in Commonwealth grants, according to the State Government's Acting Treasurer George Cash.
In a report released today, the Commonwealth Grants Commission recommends that Western Australia's share of financial assistance and hospital funding grants be reduced by a further $53 million.
Mr Cash said that together with a similar cutback last year, this would mean WA has had a $107 million reduction in annual Commonwealth funding which would impose a substantial constraint on the State's finances.
The Acting Treasurer said the $107 million loss of revenue to the State from the Commonwealth Grants Commission's latest two annual assessments would be equivalent to approximately 2,000 nurses, police or teachers or nine new high schools.
"The Commonwealth cannot continue to place such an unfair financial burden on all Western Australians and the Commonwealth should be prepared to reconsider the recommendations as they affect Western Australia," Mr Cash said.
"The Prime Minister would do well to recognise that every man, woman and child in this State is now subsidising the rest of Australia by contributing $660 per year more in Commonwealth taxes than is being returned in the form of grants, services and benefits from the Commonwealth.
"Mr Keating should be put on notice that in hobbling WA's growth he is acting against the broader national interest."
Mr Cash said that the Federal system was now penalising one of its best performing States at a time when the demand on its services was increasing because of population and economic growth.
He said WA had been the driving force of Australia's economic recovery, accounting for more than 20 per cent of the nation's employment growth over the past three years, compared with its population share of 9.5 per cent.
WA was also responsible for supplying 25 per cent of Australia's exports.
"The Commonwealth is hoarding the benefits of Australia's economic recovery to sustain its own bloated bureaucracy," Mr Cash said.
"If the Commonwealth was still paying the States the same percentage of its total taxation paid in the early 1980s, WA would have another $600 million a year in untied revenue."
Mr Cash said Premier Richard Court would be fighting the cutback at the forthcoming Premiers' Conference.
Media contact: Mark Thompson (09) 222 9595