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COAG: WA Govt's $600m sideline deal that's got everybody talking

News, Projects

Posted by PlantMiner
It's the $600million unconfirmed deal that could ensure Western Australia's capital works projects remain unscathed amid issues of rising debt. Fears of cuts to WA works projects were further fuelled when WA Premier Colin Barnett failed to strike a deal at the Council of Australian Governments (COAG) meeting in Canberra on Friday.

Most worrying was Mr Barnett's comments to Sky News on Friday morning, confirming he plans to cut desperately-needed projects if he returned to WA empty-handed.

"We will very much have to cut back capital works programs in Western Australia, and of course that's going to harm the Commonwealth Government and the Australian economy," he said.

But it has since been revealed that an understanding worth $600million may have been between Prime Minister Tony Abbott and the WA Premier on the sidelines of the meeting.

The ABC is reporting today that WA Treasurer Mike Nahan claims his state will receive a $600million one-off payment from the Federal Government over the next two financial years to compensate for a loss in GST revenue.

"Western Australia has a huge number of projects, many of which are already partially funded by the Commonwealth - City Link, Perth Freight Link, and others, so I see no problem whatsoever identifying projects to increase the commonwealth funding on," Mr Nahan said.

He promised the money would go towards capital works projects.

While the Federal Government hasn't yet confirmed if this understanding is in fact a done-deal, they have committed to decide on a method of support of the coming couple of weeks.

"In the meantime, we have said that we would work with Western Australia on a bilateral basis to explore how the Commonwealth can best and most appropriately support WA through a transition over the short term," Federal Finance Minister Mathias Cormann explained, as reported by the ABC today.

Uncertainty has been surrounding the future funding of WA's projects since the Federal Government flagged intentions to redistribute GST revenue among the states and territories.

Currently WA receives 38 cents in the dollar from GST revenue.

Sharing arrangement options being considered by Federal Treasurer Joe Hockey, included a grants commission recommendation that WA's GST share fall from 38 to 30 cents in the dollar for the 2015-16 financial year.

This is an issue we're following closely, but for now the horizon is certainly looking a lot brighter for the construction industry should the Federal Government's commitment to supporting WA with $600m come through.

There's a huge demand for infrastructure to accommodate population growth in WA, as well as to offset the end of the mining boom, so here's to hoping WA comes out a winner when the Federal Budget is revealed on May 15.

Brendan Batch, our Senior Business Development Manager, recently attended the WA Major Projects Conference and revealed some of these grand road projects on the cards for 2015.



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