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Brendon Grylls' Leader's address - The Nationals WA 2016 State Conference

Brendon Grylls

Leader’s Address - The Nationals WA State Conference and Convention

Thank you Mia and welcome everyone here today to Geraldton. It’s great to have a full room to celebrate another Nationals’ conference. Can I begin by acknowledging my twelve Parliamentary Nationals colleagues, you’ve backed me to deliver a bold vision for Western Australia, I don’t take that backing lightly. I will do everything in my power to prosecute this argument on your behalf and ensure that we can win a third term. 

The opportunity is great, the challenge is deep, we can meet that challenge. In 2013 we launched our 100 year celebration book. It was called Blood Nose Politics. Blood Nose Politics was the title of that book and it came from our view of the world that says that country people don’t always expect you to win, but they expect you to get a bloody nose trying.

Today I’ll outline for you the next chapter in our 103-year history. Let’s hope it’s a successful one. Can I acknowledge Fiona Nash our great friend, Deputy Leader of The Nationals. Can I acknowledge Barnaby Joyce who’s just jumped on a plane to fly home to see his family. He tells me the opportunity to stay in WA properly was better than the job he was going home for. He’s actually marking the calves when he gets home this afternoon, probably in the dark.

Can I acknowledge Michael McCormack the Minister for Small Business, David Gillespie the Assistant Minister for Rural Health. Mia, thankyou for that great introduction. Terry Redman my Ministerial colleague in the Cabinet week after week prosecuting Royalties for Regions projects to deliver the positive outcomes for your community against the headwind of not many people wanting to support him. Day-after-day in the Cabinet, prosecuting the list of projects that of numbers of thousands, counts to the billions, Terry is doing that on your behalf in the West Australian Cabinet. Can I acknowledge Dexter Davies, Allan Marshall and Ian Robertson, our life members and all of our members that join us here today.

Thank you to Clarence Hampton, Traditional Owner from the local Geraldton region. Can I give my commitment to all the first West Australians that we will do as much as we can to ensure they can benefit from the prosperity of Western Australia and the modern economy. Yesterday when we were announcing with Paul Brown, our commitment for a $150 million into the Geraldton Hospital, six or seven little Aboriginal kids came out the door, were laughing and having a joke with their mates. We had to stop the press conference and I just reflected that there were three little Grylls kids up in Karratha this morning, they are at flipper ball at the Karratha Leisureplex. They’ve got such a great opportunity in Western Australia. I always reflect on those little Aboriginal kids and making sure that we can somehow ensure that we can close the gap between the opportunity for those little Aboriginal kids coming out of the Geraldton Hospital yesterday, and what Tom, Oliver and Jack Grylls have to look forward to into the future. And I encourage you all to find the time in your day-to-day activities to turn your minds to those little Aboriginal kids and making sure that that gap doesn’t stay so big for so many more years. It’s our most intractable challenge please turn your mind to it.

Welcome to beautiful Geraldton. This morning I ran on your foreshore, I swam in your beautiful ocean. The highlight was the monkey madness jaffle from the Jaffle Shack, my favourite small business in Western Australia. This is a truly beautiful place to visit and I hope people coming to The Nationals’ conference get the chance to experience all that Geraldton has to offer. If you think back to Geraldton ten years ago and think about it today it’s a very different place. It shows how with investment and focus and commitment, you can transform a country city into a modern vibrant community like we have here in Geraldton.

We’re staring down the barrel of an election in just over four months and rather than limping to the line, the West Australian Nationals are charging towards it with enthusiasm, with purpose, and with useful policies that will help run our State to its maximum. ABS data showed that Western Australia shed another 4300 jobs last month, this was a 21st consecutive monthly fall in full-time jobs.

ACIL Allen Consulting executive director John Nicolaou, formerly of the Chamber of Commerce and Industry, said it appears that the State’s jobs market was at its weakest since at least 1990/1991 and warned it could get worse. In 1990 I graduated from high school, in 1991 I started law school at Murdoch University. The West Australian economy was soft and depressed back then. I remember enrolling in law school. They said to me there’s no jobs for lawyers at the end of your degree. That was what Western Australia was like in 1991. Respected economists are now saying we are back there. We’re back there now. It shows the depth of the challenge we face.

Commonwealth Bank, CommSec’s State of the States report released this week is a sad reflection of the economic circumstances forced on us by the GST share debacle and the unwillingness of the Federal Government to act. Western Australia, the powerhouse of the national economy just a few years back is now ranked eighth. Last. Ranked last of the States in our nation.

Western Australia facilitated a record revenue boom for the nation and this is the outcome that we’ve been delivered. The system, the unfair system, has smashed the most productive State into last place on the State of the States rankings. How can it be that our system does that to the most productive State delivering 40 per cent of the nation’s exports from the Pilbara? How can that be? It’s the redistribution of our GST money to Tasmania that has them now ranked above us in the economic standings. A construction boom in Tasmania funded by West Australians paying the GST. Is that fair?

In the absence of a level playing field, or even a slightly more balanced one, we find ourselves with great economic challenges and few options ahead. The Nationals have a solution. We will increase the outdated Special Lease Rental in State Agreements from the 1960s and 70s. We will increase that Special Lease Rental from 25¢ to $5. It will be the first increase in 50 years. Sir Charles Court made the second reading speeches in those State Agreement Acts in the State Parliament back in the 60s. He had a grand vision for regional Western Australia, and prosecuted that vision with great passion. He’s credited with being one of the more formative Australians in our history. He had a vision of strong, vibrant towns, the creation of jobs, a downstream steel processing industry. Sir Charles Court laid down a clear vision for Western Australia and he set that production rental fee at 25¢. Much has changed.

Sir Charles Court never envisaged Singapore trading hubs. He never envisaged some of the operational aspects of that business being transferred to Malaysian call centres. I had a constituent call me this week saying his job was being off-shored to Malaysia. Sir Charles Court never envisaged that. He never envisaged automated, driverless trucks, trains and drill-rigs. When he framed the framework around the mining sector, payroll tax was a great opportunity to get a revenue source for the State. Last time I looked we haven’t found a way to tax driverless trucks and trains. He never thought FIFO would be the way that we would undertake business, housing people in very poor quality accommodation, donga camps that Terry Redman fought so hard against is a sorry, sorry place. Not a blade of grass, not a tree, a harsh barb wire fence around the dongas. Plonked in the bush on the outskirts of Newman. Sir Charles Court never envisioned that. Never. We in WA should not envisage that either, today in 2016.

Those State Agreements didn’t factor in native title, they didn’t factor in the environmental standards that we now have and they certainly didn’t factor in that even after the infrastructure and railways to the port were built that new entrants to the market like Atlas Iron and the other smaller iron ore miners wouldn’t be able to access those railway lines so now they run super quad road trains every two minutes right alongside those train lines to the port in Port Hedland. Sir Charles Court would never have envisioned that for this industry.

So we envision looking at those 1960s agreements and modernising them. Having them reflect modern practice, best practice, the community development we’d like to see, the local job creation that we demand from it. A fair return for Western Australia from our most important sector in our economy.

The West Australian Nationals believe that it’s time to put those State Agreements back on the table. Our opponents say that you can’t do that. Our opponents want to outsource the policy decisions of the West Australian mining sector to the miners. “You can’t go there. That’s a State agreement – it can never be changed”. That means that in 2066, 100 years after the start of that mining sector, that 25¢ will be acceptable. That FIFO would be an acceptable practice, that not having regard to native title, to the environmental demand of the modern community, to sharing of infrastructure, how we will deal with the automation, none of that can be addressed because the State Agreements can’t be changed. We think it’s time to change them. We’re prosecuting that argument.

The auditor-general in 2004 took a close look at this issue. He said, “The State Agreements contain a clause that provides that the agreement will not be amended by the State without the concurrence of the company. For Parliament to act unilaterally could be seen to be a breach of good faith and detrimental to the State’s reputation and interest. Ultimately, however, Parliament’s authority to amend or repudiate its legislation cannot be shackled.” The WA Nationals are the only political party that doesn’t want to be shackled by 1960s agreements and we are prosecuting that argument to the people of Western Australia and we seek their mandate in March to unshackle the provisions of those 1960s agreements. And why do we do that? Why do we do that? As you would be aware, last year Western Australia received a return of 30¢ in the dollar from the GST. At the same time Queensland got $1.13, South Australia $1.36 and Tasmania $1.82 for every $1 that was raised in GST in their State.

Western Australia having facilitated the biggest economic expansion of the nation in the last 50 years, is now borrowing money to pay our teachers and nurses salaries while the GST we raise is spent in South Australia and Queensland and Tasmania and the Northern Territory. Western Australia had to build the infrastructure and services to cater for the extra 500,000 people that came to WA. For those who have been to Tasmania, the entire infrastructure of Tasmania caters for 500,000 people. We rebuilt Tasmanian in Western Australia in the last ten years. Power, water, sewerage, roads, public transport, service delivery. We’ve done all that. We did all that to facilitate a massive expansion of the Australian economy and at the end of it we’re ranked by the Commonwealth Bank as the worst.

Eastern States commentators snidely laugh at us and say, “Didn’t manage that very well, did you?” We don’t accept the snide laughing. West Australians don’t take a backward step and we won’t be cowed in the corner by eastern states commentators who have no concept of what it took to facilitate that massive expansion of the West Australian and national economy. In August we announced our policy of 25¢ to $5, and at the end of that first week Prime Minister Malcolm Turnbull was in Western Australia to address the Liberal Party conference. After some hastily rearranged speech points, Malcolm Turnbull said the GST share, and I quote, was “unfair, unbalanced and not reflective of the State’s investment in the infrastructure that has been required to support the mining boom. Where have we heard that before?” Malcolm Turnbull said that in Western Australia. He has acknowledged exactly what the West Australian Nationals are prosecuting. He actually understands and believes in it. What he doesn’t believe in is addressing the concerns he has so rightly acknowledged.

The PM then made a commitment to the people of Western Australia to introduce a GST floor, I assume because the system is unfair, unbalanced and not reflective of the State’s investment in the infrastructure that has been required to support the mining boom. Yet by the time he arrived back in Canberra, what seemed like an exciting promise at the time, and was written up on the front page of the paper, that lead the news bulletins and Colin Barnett said it was the biggest advance in GST relations with the Commonwealth in the last 20 years. Then it disappeared, and it means nothing. So Malcolm Turnbull, we will hold you to that, because clearly the WA Liberals in the Federal coalition Party Room aren’t willing to hold him to it. They aren’t willing to hold him to it. The West Australian Nationals are and we talk about this every day. We have framed a new revenue to counteract his abandonment of that issue, as you would expect us to do, because we might not always win, but we’ll get a blood nose trying. If only Christian Porter, Julie Bishop, Mathias Cormann could come home once from Canberra with a little claret rolling down their cheek it would take away so much of the stuff that I talk about on a daily basis.

Stand up for Western Australia Federal Liberal MPs. We need you to. We are ranked last in the Commonwealth Bank State of the States report. Given that we now have no clear indication of where Malcolm Turnbull wishes to take his GST floor, the West Australian Nationals at our conference this weekend propose that the new revenue stream that we’ve announced be quarantined for the GST distribution methodology.

Some commentators will say this can’t be done. They will say that The Nationals new revenue stream cannot be quarantined from the methodology.  But they are wrong - there is a precedent.  It is already happening in every other state and territory in the form of gambling revenue. This year, it is estimated that the eastern states will collect more than $5 billion in gambling revenue from granny putting her money into the pokies, and this money, this five thousand million will be invisible to the Commonwealth Grants Commission. So while every dollar of WA’s iron ore revenue penalises our GST distribution, gambling revenue, collected in other states through the pokies, is not.  If NSW, Fiona’s home State, can collect $2 billion of invisible taxes in a single year from New South Welshmen feeding their money into the pokies, and the Prime Minister and the Cabinet exempt that from the GST methodology and lecture Western Australians on a production rental from 25c to $5. Is the Commonwealth perversely suggesting that they would be more comfortable if Western Australia introduced pokies rather than increasing a special lease rental set at 25c in the 1960s to $5 today? 

Would Barnaby Joyce have said “well we’ve all got pokies, they’re not very nice, we don’t really want to talk about it but if Western Australia does that they’ll have a new revenue source that won’t be calculated against the GST.” Barnaby doesn’t believe that. Fiona Doesn’t believe that. Malcolm Turnbull doesn’t believe that. The perversity of the GST system delivers that outcome. Let me give you an example. Let’s turn the tables. Somewhere out the back of Bathurst this weekend is an explorer kicking some rocks around. He finds the world’s biggest lithium deposit in the back blocks of NSW. Mike Baird and Troy Grant, the State Premier and Deputy are pretty excited about this new industry. The lithium industry - the industry of the future. They look at the deposit, they look at the volume, they believe they can deal with the community concerns around a new mining industry in the region. They believe they can deal with the environmental challenges. They’re open to the infrastructure, the roads, the rail network, the power, the water, that is needed to facilitate a big new industry. They know that it is probably going to drive up wages as the mining sector pulls the public sector teachers and nurses to the new lithium deposit, which is the resource of the future. But the reason they think this is a positive is because if we could raise $2 billion a year in royalties from this new lithium deposit just out the back of Bathurst, maybe we could get rid of those terrible pokies we’ve got and take away the scourge of gambling on our community.

We could replace the revenue from pokies, with this new revenue from a lithium mine. Facilitate an enormous investment into infrastructure by the State. Manage the teachers leaving the classroom to go off and work in the lithium mine. But they Malcolm Turnbull says “Hey Mike, just remember, if you do that, the royalties from your lithium deposit will be redistributed away. You won’t actually get the benefit. You’d actually be better off financially if you, as New South Wales Premier, not doing the lithium, because you’ll facilitate the infrastructure and the wages challenge, and weighing in the environmental debate, and soothing the concerns of the local communities from a new mine, but you won’t end up with any new revenue. Best you just stick with the pokies. Best you just stick with the pokies.” So when the commentators say to you that West Australia shouldn’t be arguing for the revenue source of 25c per tonne to $5, being quarantined from GST redistribution, just think about what those commentators are backing in the current system that says that nan feeding a dollar into the pokies in New South Wales can deliver $2 billion of invisible revenue to their State Government bottom line. That’s been resisted by successive governments in Western Australia because of the scourge of gambling and the problems that causes for the community. That our financial system between the states actually promotes gambling and doesn’t promote the development of new mines and the revenue sources that come from it.

Let me guarantee you, the GST methodology would be changed in a month if Mike Baird and Troy Grant took that challenge to the Prime Minister’s table. It would be fixed in a month. How is it then that Western Australia, having facilitated projects that deliver far in excess of a new lithium industry in New South Wales, has seen the entire benefit redistributed away and so many West Australians shrug their shoulders slump into the corner and say “Too hard. There’s no point fighting that anymore.” They have given up on getting a blood nose for what they believe in. The West Australian Nationals don’t believe in giving up.

Quarantining our proposed revenue stream is possible. There is already a precedent, because gambling revenue in the eastern states is quarantined and it can only be achieved if our Federal Members of the House of Representatives and Senate demonstrate the political will to do so.

You and I know that if this was a problem in New South Wales or Victoria, it would have already been fixed. Because it’s a West Australian problem we’ll just leave them to their own devices. We have to fight way above our weight division to win this debate but our policy is clear. It is time to win the debate.

Job growth and security in a transitioning economy is our top priority for this election. Our opponents in the Labor Party claim to have a jobs plan for Western Australia. It’s about this thick - 70 pages. I read through it, the only job I think it created was the people photo copying it at Snap printing. They have a job for about 25 minutes printing the document. There’s nothing in it but platitudes that actually won’t deliver an outcome. The Liberal Party claim to be the party of small business but today the West Australian Nationals take that claim. The West Australian Nationals are the party of small business and today we announce a real jobs plan.

On National Small Business Day, today, we say that the mining boom has brought great prosperity to the State but challenges for others. We all remember the $7 coffees and $400 hotel rooms and the cleaners earning $150,000 a year to work in the mining camps. Wages across the whole sector of Western Australia rose substantially in the boom. We had the highest cost of living and it remains high despite the economic downturn.

In order to support small to medium businesses The Nationals, if reelected in 2017, will increase the payroll tax exemption threshold from $850,000 to $5 million for a period of two financial years. We will fund this with our new revenue stream. The 1960s production rental, which has never, been upgraded, if we can upgrade it to $5 we can fund the most substantial reform in businesses most hated tax in Western Australian history.

Major payroll tax reductions will help stimulate employment and make it easier for employers to innovate, invest in equipment and infrastructure, and most importantly hire new workers. 17,000 businesses in Western Australia pay payroll tax. If The Nationals form government we will implement our policy and 10,000 of the 17,000 businesses in Western Australia that pay payroll tax will be exempt. 10,000 businesses and all of their employees a real jobs plan to stimulate the economy because I won’t stand back and have the Commonwealth Bank leave us at eight on the State of the States for another year. We will drive Western Australia out of the bottom of this cycle and you do that with substantial policy that makes a difference. Not lip service with a title on it like the Labor Party seek to deliver. This decision will reinvest $440 million per year straight back into the bottom line of 10,000 West Australian small businesses.

Some local examples, there are in the room today. GHS Engineering solutions – Andrew Pitcher’s business. 50 employees pays $136,000 a year in payroll tax. If The Nationals form Government, Andrew Pitcher will have $136,000 to reinvest back in employing and innovating in his business. Shane Van Styn at Sun City Security employs 35 people, he pays $25,000 payroll tax each year. Shane will have $25,000 payroll tax to reinvest back into his business. I hope that Andrew Pitcher and Shane Van Styn get the opportunity to employ a young Geraldton person to work in their businesses off the back of the payroll tax changes that we make. I encourage them, back to my story about those little Aboriginal kids at the hospital. Shane and Andrew find a way to give a young Aboriginal person in the Mid West an opportunity in your business. The quid pro quo of The Nationals backing you is that you look to address that most challenging problem of getting Aboriginal people into the workforce for the first time.

We know not all small businesses pay payroll tax. There needs to be an incentive for all small businesses with less than 10 workers that don’t currently pay payroll. They play a vital role in our local economy and communities in our state. We saw businesses like the Jaffle Shack down on the foreshore that provided me with my breakfast this morning. The Nationals plan for payroll tax includes the establishment of the Small Business Kick-Start Grant at a cost of approximately $10 million per year. The Kick-Start Grant will provide $5000 grants to those businesses who are employing somebody and keeping that employment running for 12 months. A direct encouragement to that small business sector to bring new people into the workforce and to continue to employ and grow the economy. We can afford this new plan because of our increase in the production rental.

Our opponents who do not support the increase in the production rental cannot afford this plan and so we have a clear distinction to take to the next election. The Nationals are the natural home for small and medium businesses, and we look forward to prosecuting our argument to Andrew and Shane and the 10,000 small businesses across Western Australia, who will benefit from our policy. Who will be able to see clearly from the expansion of the mining sector in Western Australia. They know the heavy lifting they had to do as a small business, as that mining sector dragged employment north, dragged wages north, dragged infrastructure spending north. We want this to be a dividend for the small business sector in Western Australia and it will come from The Nationals’ payroll tax changes. The Nationals will work to ensure these initiatives are sustained for more than two years once the Federal Government acts to place a floor on the GST of 75c or quarantines the money raised by our new revenue stream from the GST distribution methodology. Without that change from the Federal Government, after four years the new revenue stream starts to be redistributed away, our payroll tax changes cannot be sustained. It’s a viable policy in the short term to kick-start the economy. I would like to see that in the long-term Western Australia maintain the most productive, attractive payroll tax regime in the nation so we re-take our place at the top of the Commonwealth Bank State of the States table rather than making up the bottom.

We also will talk further in the election campaign about our asset sales and recycling plan. We know that infrastructure is so critical to regional development. With the state of the finances how they are, substantial investment in infrastructure will need to come from selling our assets. We will make it clear to the people of Western Australia that if we choose to sell assets, these are the assets that we will build to replace them. Productive assets that help you grow your economy, your business and your community. We think that’s a viable policy to take to the community and you as the conference of The Nationals will be debating that during the course of the afternoon.

We also seek to change the domestic gas policies in Western Australia. We know in a transitioning economy we need to take advantage of our natural assets. The domestic gas industry has also been facilitated by the State. We have a 15 per cent reservation policy. You would want to be confident that 15 per cent of the exports of LNG off our Pilbara coast is also seen domgas directed into the pipeline and we will be talking about that more in the campaign. We believe we can win the hearts and minds of the people of Western Australia, that we can implement this new policy which is very different to our political opponents because we have a track record of implementing policy that is very different to our political opponents. We have a track record that our political opponents say can’t be done and we’ve proved them wrong. We have a track record of the political commentators and journalists disregarding our policies as unsustainable and undeliverable and they have then spent the last eight years writing about the unsustainable and undeliverable Royalties for Regions program which has transformed regional Western Australia.

Royalties for Regions is what allowed us to announce the Geraldton Hospital yesterday. That’s part of an existing $6.9 billion program which has invested into more than 3,600 projects since 2008. The Department of Regional Development recently launched a new website so you can see all those projects and what Royalties for Regions has invested in. Paul Brown called for us to invest $115 million into the vital health infrastructure of the Mid West. We made that commitment. Congratulations Paul for your advocacy for that most important project for your region. There have been more than 100 projects in Geraldton alone and many more state-wide benefits that have come from Royalties for Regions. The Beresford Foreshore, the Central Regional TAFE, the Geraldton Library, the Eastern Breakwater, the Geraldton Residential College, the Wonthella Oval Lights, the Karloo Wandina Housing Project, the Abraham Street Bridge, the Yellowtail Kingfish Trial, and my two favourites, the Chrysalis Women’s Refuge, making sure that women in a very vulnerable time of their lives, have a safe place to go, and the Foodbank, making sure the people who can’t put three meals on their table a day are backed. Royalties for Regions backs those vital programs for your communities. We are so proud of it, we will fight for it. We are so proud of it any many of our opponents and political commentators spend their time focusing on how terrible Royalties for Regions is but we know it has been transformational for regional communities. We know that we are the envy of every other State. We all know that they would dearly love the opportunity to drive a program like Royalties for Regions into their regional economies and I just say to them it involves blood nose politics. It involves blood nose politics. Because if you’re not prepared to get punched on the nose, you’re not going to be able to deliver a project like Royalties for Regions.

In conclusion, last night Sarah from Rio Tinto asked me – Brendon why are you doing this? I’m sure it’s a question lots of people are thinking about as our lease rental increases the political debate of the last we weeks. The answer is simple. The West Australian Nationals resolve not to sit in the cheap seats in the grandstands, while the State’s economy was smashed by the post mining construction downturn. Western Australia needs politicians that are on the field, battling against the wind, and against bad umpiring decisions. The Commonwealth Bank’s ranking of Western Australia as the eight economy behind all states that we have propped up, puts us as the equivalent of 10 goals behind at three quarter time, but we will not join our political opponents and most political observers and commentators and the critics from the grandstands when what is needed is a new game plan and the determination to deliver it. What our opponents don’t seem to get is that no important contest was ever won from the grandstands by criticising those who are on the ground. Get out of the grandstand. Get onto the ground. Take up the fight on behalf of Western Australia and regional Western Australia. The Nationals are the Party to implement a new game-plan for Western Australia. It’s a good plan. Currently it’s the only plan and with your support we will keep making it a contest for the hearts and minds of Western Australians in March 2017 and beyond. The Western Australian Nationals have got your backs.

Back us to change our State, back Paul Brown to win your local seat of Geraldton. His opponent has got a poster up, I ran past it this morning, it says honest and hard working. Honest and hardworking is not enough. Royalties for Regions was not delivered by being honest and hardworking. Royalties for Regions was delivered by people like Paul Brown, who want to break the cycle, determined to deliver an outcome, and are prepared to get a blood nose trying. Back me as your leader to lead our little political party to a historic third term and because we back you, our members and all Western Australians, we will not resile from the opportunity of reshaping the West Australian economy. Please don’t think we are seeking to negotiate an outcome. That we’re a bit worried about opinion polling. That we don’t think this is deliverable. I have outlined to you today a clear path for our revenue source, a new stimulus for the West Australian economy, for an argument with the Commonwealth that can’t be disputed on the basis of fairness. I ask you to back us to deliver that argument to the people of Western Australia as we march towards March 2017. Thank you.