Bushfire Recovery Support

The Hon. T.T. NGO (14:48): A supplementary question: if South Australia was to be successful for funding from the federal government, would potentially we be losing GST money?

The Hon. R.I. LUCAS (Treasurer) (14:48): They are always active parts of any discussion, but so far the commonwealth has been receptive to the notion that these sorts of things shouldn't be. But we would obviously have to have those sorts of discussions with the commonwealth and, more importantly, with the independent Commonwealth Grants Commission, because the Grants Commission, contrary to some belief in the community, is completely independent of the commonwealth. It, however, can on occasions be directed by the commonwealth to say this particular expenditure shouldn't be used by you in your independent way to allocate funding between the states.

To that extent, the commonwealth government can exclude various payments or expenditures, and that occurs on occasion. We have utilised that in the past in South Australia, as have other states and territories. I don't anticipate that that will be a significant issue, but we will be mindful of that issue. It is always an important part of any sort of arrangement between the states. I think there was a press story in the Australian Financial Review two or three weeks ago which did indicate that, as a result of payments to the Queensland government from floods some years ago, with the passage of time the independent Grants Commission results do see an impact in terms of the grants.

The argument on that particular occasion, as I recall, was that eventually it evens out in terms of the grants from the Grants Commission. So on reflection it may well be that the independent Grants Commission processes do have some impact in relation to GST. I guess I should clarify my earlier statement to that extent, now that I recall the debate that ensued as a result of the Financial Review article on the Queensland floods.

Perhaps it might be better if I get some advice in relation to how the independent Grants Commission has in the past treated the payment of grants to states for natural disasters and what the normal impact of the Grants Commission formula might be, and then anything else would have to be the subject of discussions with the commonwealth government. That might be the most sensible way to answer the particular questions that have been asked in relation to GST.

The PRESIDENT: I don't have a whipping advice as to Labor's question order.