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Western Australia not willing to give up new gas reserve for eastern states

Xinhua, April 26, 2017 Adjust font size:

Western Australias newly-appointed Premier Mark McGowan said on Wednesday that it is time to "play hardball" with the federal government and the eastern states over plans of a possible gas pipeline that would stretch across the nation.

McGowan said his state deserves a bigger share of the nation's goods and services tax (GST).

At the moment, Western Australia receives only 30 cents out of every dollar they produce, due to their huge revenue from natural resources like iron ore.

In contrast, other states like the Tasmania receive 178 cents for every dollar they produce and South Australia rakes in 142 cents.

The even distribution of the tax by the federal government is a way to keep a balance between the states, however, many Western Australians are far from happy with this arrangement.

To appease the resource-rich state, the federal government offered a 34-cent return heading into 2017-2018, but this is little comfort to McGowan.

"They seem to think that we will continue to be a cash cow and then they can come and take our gas," he told the Australian Broadcasting Corporation.

"Well I've got another thing coming for them."

The eastern states are in a compromising position when it comes to its gas reserves, with much of the commodity being shipped offshore for a higher prices, a nationwide shortage may begin to put heavy downward pressure on the domestic market supply.

But according to McGowan, there is little sympathy on the western side of the country.

"They have a severe gas shortage over east because of policy failures on their behalf that we've avoided with (former premier) Alan Carpenter's gas reservation program."

The proposed pipeline would run natural gas from Western Australia into the eastern states, easing domestic supply demand.

Energy Minister Josh Frydenberg said, "Given there's an abundance of gas on the west coast, and a tightness in the east coast gas market, it would build on other projects the government is looking at."

But McGowan said, "If (they) want to take our gas ... they have to provide a better deal to Western Australia when it comes to the GST." Endit