AFTER the 2008 State election in Western Australia, WA National Party leader and king-maker Brendon Grylls sparked a national trend that could be reversing the fortunes of rural Australians when he used his party’s balance of power negotiations to secure the State’s Royalties for Regions program.
The policy transformed from an ambitious election promise into a legislated investment program that’s delivering for WA regions in spades.
That power sharing deal with the WA Liberals now sees about $1 billion a year - raised through 25 per cent of the State’s mining and petroleum royalties - re-directed towards important projects that improve the social and economic prosperity of regional communities.
The WA Country Local Government Fund (CLGF) is one of three funds operating under the State government’s Royalties for Regions program, designed to provide and renew infrastructure and support capacity-building across regional WA.
In announcing findings from a recent review of the program last week, Mr Grylls said more than $306 million had been allocated to the fund since it started in 2008, seeing about 1200 projects funded across the State’s 109 country local governments.
In winning O’Connor off long-serving Member and Liberal Wilson Tuckey in 2010, WA Independent National Tony Crook capitalised on the WA National’s success.
He campaigned for a federal Royalties for Regions program that matched the WA scheme dollar for dollar and is continuing to push for that outcome.
Mr Crook said there was now a growing political desire to implement similar programs throughout the nation, as exhibited during the recent Queensland election campaign where new Qld Premier Campbell Newman announced a $170 million program over three years, subsequently announcing a roads component for the program of $285 million, bringing its total package to $455 million over four years.
However, Mr Crook said those promises were made despite Qld having similar royalty payments to WA.
The Queensland Farmers Federation (QFF) said the commitments were significant against a State budget heading towards an $85 billion debt.
But they added Qld mining royalties have totalled more than $3 billion per year in recent years - and would only increase as more coal seam gas projects come into operation.
“In that context, both of these policies would make a small contribution to the regions that are bearing the brunt of the social and economic impacts of mining and gas development, where the rapid growth in population is not being matched with a comparable growth in infrastructure and social support structures,” QFF chief Dan Galligan said.
Federal Nationals Leader Warren Truss said his party had a long-standing policy to implement a dedicated funding stream for regional development that ensured worthwhile community projects can be undertaken at the local level.
But he said tying that program to sound royalties at the federal level was a difficult proposition because the Commonwealth doesn’t collect any royalties and only earns small amounts under the petroleum resource rent tax.
Mr Truss said that amount would grow significantly as some off shore oil and gas wells came on stream.
But under current arrangements two thirds of the money is returned to WA, meaning the Commonwealth only gets a third.
“If we simply tied the program to current royalties from what the Commonwealth receives, it would not be a strong revenue flow,” he said.
“But I do believe it’s an objective that we should pursue for the future, as our earnings from the resource rent tax are increased.”
Regional Australia Minister Simon Crean said the difference between the government’s $1 billion Regional Development Australia (RDA) fund and any other federal or State-based Royalties for Regions program was more than just pure branding.
However, he said he found it “incongruous” that the Nationals were talking about introducing a federal scheme, but opposed the Minerals Resource Rent Tax (MRRT) and its revenue raising capacity for regional projects.
He said the next three rounds of the RDA fund would be funded from the MRRT along with $6 billion worth of infrastructure.
“At the moment the debate’s on about tax cuts and superannuation, but there’s $6 billion of infrastructure essential for regional development and there’s the RDA funds as well,” he said.
Mr Crean said the ALP and the Coalition had a fundamentally different approach to regional funding and were looking to work in close partnership with grass roots community groups to implement relevant projects.
“It is about us properly recognising that we are an economy in transition and many industries are being impacted by the high Australian dollar, not just manufacturing,” he said.
“But the services dimension is in demand because people will pay a premium for solutions.
“The patchwork nature of the economy really suits the regions’ argument, but you can only deal with the patches if you get a whole-of-government approach and you are leveraging the funding.
“I don’t have a problem with the West in terms of its Royalties for Regions program, but it has to be part of a partnership - and you need a framework to drive that partnership.
“You’ve got to engage local input and the best way to do that is to have programs that are responsive to local solutions that stack up.
“And that’s a fundamentally different approach than the Opposition have ever had to regional development.
“That’s why this round of RDA funding is all going to be spent or committed before the election.
“The whole five rounds will have been committed before the next election - and we won’t wait, as they (the Coalition) did, just before the election and then pork barrel.
“We’ve got a whole structure and process that is about vetting proposals that stack up and leveraged funding - the whole box and dice.
“I’ve seen none of that in the thinking of the Nats.”
Royalties for Regions Commonwealth - Labor’s $1 billion Regional Development Australia fund over three years WA - Liberal/National government’s $1 billion Royalties for Regions program annually Qld - LNP’s Royalties for Regions program $455 million over four years