Damon Mcknight
Western Australia has a long history of discontent with the federal government and has been toying with the idea of secession since before federation in 1901. In 1933, 68% of the state voted to secede, but efforts to implement the result were unsuccessful. In 2017, a faction of the Western Australian Liberals voted to examine the option of Western Australia becoming a financially independent state within the Commonwealth, coining the term WAxit. While the idea of secession is not new, there are significant constitutional barriers, and it is considered extremely unlikely by experts.
| Characteristics | Values |
|---|---|
| Reason for secession | Western Australia feels it is not getting its fair share of the Goods and Services Tax (GST) revenue |
| History of attempts | Western Australia has tried to secede since before federation in 1901.. In 1933, 68% of the state voted to secede. |
| Constitutional barriers | The Australian Constitution describes the federation as an "indissoluble Federal Commonwealth", denying WA the right to secede. |
| Economic impact on WA | Western Australia would become the richest mini-state in the world. Perth would go from being in a country with the 13th or 14th biggest economy to roughly the 50th. |
| Economic impact on Australia | WA represents about 15% of Australia's economy and 35% of its exports. |
| Practical challenges | WA would need to set up armed forces, fund a public health system, print currency, and issue passports. |
| Public opinion | In 1933, 68% of voters supported secession. In 2017, the WAxit idea was one of 25 motions put to the state conference. |
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What You'll Learn
Western Australia's long-running grievance about tax revenues
Western Australia has long held a grievance regarding the distribution of tax revenues, specifically concerning the goods and services tax (GST). The state has argued that it receives an unfairly low share of federal tax revenues, with some suggesting that Western Australia is being "ruthlessly exploited" by the "parasite states of the east". This sentiment has fuelled the push for Western Australia's secession, with the belief that the state would be better off retaining its mineral wealth.
The distribution of GST revenues among the states and territories is the largest single expenditure item in the federal budget. The purpose of this distribution is to ensure that each state and territory can provide its citizens with comparable public services while bearing similar taxation burdens. The calculations take into account the states' revenue-raising capacity and expenditure needs, including factors such as population age, geography, and the number of Indigenous people within the state.
However, Western Australia's capacity to raise mining royalties was impacted by the falling iron ore price after 2013. As a result, the state experienced a significant decrease in revenue. It is important to note that the Commonwealth Grants Commission (CGC) plays a crucial role in determining the distribution of GST revenues. In 2015, the CGC estimated that Western Australia received approximately $7 billion more in GST revenue than it would have if fully contemporaneous assessments had been implemented.
The issue of GST distribution is further complicated by the principle of horizontal fiscal equalisation, which aims to ensure that all states have similar fiscal capacities to provide government infrastructure and services. While this principle has been a point of contention, it is worth mentioning that Western Australia has historically benefited from it, receiving a larger share of 'untied' grants from the Commonwealth.
Despite the complexities and differing opinions surrounding Western Australia's tax revenue grievance, it is clear that the state's push for greater financial independence has been a significant factor in the discussion of potential secession.
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The feasibility of WA becoming an independent state
The idea of Western Australia becoming an independent state, or "WAxit", has been floated by factions of the state's Liberal Party on several occasions, most notably in 2017 and 1933. While the idea of secession is not new, there are several factors that call into question its feasibility.
Firstly, there are constitutional barriers to states seceding from Australia. The Australian Constitution describes the federation as an "indissoluble Federal Commonwealth", implying that states do not have the right to secede. Constitutional experts have long dismissed the prospect of secession as unrealistic, and there is no clear legal pathway for a state to leave the federation.
Secondly, there are practical and financial considerations. Western Australia would need to establish its own military, currency, and passport system, and fund a public health system in its entirety. It would also need to develop its own financial services industry and negotiate trade relationships with other countries. The loss of GST revenue, which is currently distributed based on the principle of horizontal fiscal equalisation, could be a significant challenge for Western Australia as an independent state.
However, there are arguments in favour of Western Australia's independence. Some believe that the state is not receiving its fair share of GST revenue and that it would benefit from keeping its mineral riches. There is also a history of discontent in Western Australia, dating back to the impacts of the federal constitution and the federal government's economic policies during the Great Depression. In 1933, 66.2% of voters in the state voted in favour of secession, demonstrating a strong secessionist sentiment.
In conclusion, while the idea of Western Australia becoming an independent state has gained some traction, particularly among certain factions of the Liberal Party, there are significant constitutional, practical, and financial barriers that call into question the feasibility of such a move.
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The impact of WA secession on Australia's economy
Western Australia (WA) represents about 15% of Australia's economy and about 35% of its exports. If WA were to secede, it would be a hit to Australia's economy. Over the past 25 years, Australia's economy excluding WA has grown by 108% compared with 120% with it. Residents of Perth would go from living in a country with the 13th or 14th biggest economy in the world to roughly the 50th biggest.
The main issue behind WA's push for secession is the state's dissatisfaction with the share of the goods and services tax (GST) it receives from the federal government. WA has a long history of discontent, with some believing that the state is being exploited by the "parasite states of the east". However, others argue that WA has benefited from the system and received more than its fair share over the years.
If WA were to secede, it would need to develop its own financial industry and establish a new currency. This could lead to a significant impact on the state's import-competitive manufacturing and service industries. Additionally, WA would need to fund its own military and public health system, which would be costly.
While the idea of WA secession has been floated multiple times, it is technically possible but extremely unlikely. There are significant constitutional barriers, as the Australian Constitution describes the federation as "one indissoluble Federal Commonwealth". Any attempt at secession would also need to start with a vote in favour in WA, which may not be guaranteed despite a 1933 referendum where 66.2% voted in favour of secession.
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The constitutional barriers to WA's secession
Western Australia's secession, or 'WAxit', has been a topic of debate since the 1933 referendum, in which 66-68% of voters supported the state's independence. However, this movement has faced significant constitutional barriers.
The Australian Constitution describes the federation as an "indissoluble Federal Commonwealth", implying that states do not have the right to secede. Constitutional law experts have long dismissed the prospect of secession due to this reason. The indissoluble nature of the federation was further emphasised by the British parliament's ruling in 1934, which stated that they were powerless to unilaterally amend the Australian Constitution.
The practical aspects of secession also present challenges. Western Australia would need to establish its own military, currency, and passport system, incurring significant costs. Additionally, the state would need to develop its own financial services sector and negotiate trade relationships, impacting its economic standing.
While there is discontent over the distribution of GST revenues, Western Australia's secession is complicated by these constitutional and practical barriers. The likelihood of WAxit is further diminished by the lack of a clear legal pathway for a state to secede from Australia.
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Historical attempts for WA to secede
Western Australia has a history of secessionist sentiment and movements, with several attempts and proposals over the years for the state to break away from the rest of Australia and form an independent nation. The first significant push for secession came in the late 19th century, shortly after the federation of the Australian colonies in 1901. In 1900, before federation, Western Australia actually held a referendum on secession, with a majority of voters opting to leave the proposed federation. However, this vote was largely symbolic and had no legal effect, as the British Parliament had already passed the Commonwealth of Australia Constitution Act, which included Western Australia as a part of the new nation.
In the early decades of the 20th century, there were several other attempts and proposals for Western Australia to secede. One of the most notable was the movement led by former Premier James Gardiner in the 1930s. Gardiner argued that Western Australia was being economically disadvantaged by the rest of the country and that the state would be better off governing itself. He even went so far as to draw up a constitution for an independent "State of Western Australia." However, this movement ultimately failed to gain widespread support, and the idea was largely abandoned by the 1940s.
The issue of secession resurfaced in the 1970s, amidst growing discontent in Western Australia over the distribution of tax revenues and the perception that the state was not receiving its fair share of funding from the federal government. In 1974, a group of politicians and business leaders formed the "WA Secession Committee," which advocated for the state to secede and form a separate nation. This committee gained some support, and in 1979, a motion for secession was even put before the state parliament, although it was ultimately defeated.
The most recent significant push for secession came in the early 2000s, when a group of activists formed the "Western Australia Secessionist Movement." This group argued that Western Australia was being ignored and marginalized by the federal government and that the state would be better off governing itself. They advocated for a referendum on secession, and while they gained some media attention and public support, ultimately their efforts did not result in any official action.
While there has been no formal movement for secession in Western Australia in recent years, the idea continues to resurface from time to time, particularly amidst debates over issues like resource distribution and state rights. Overall, while there have been several historical attempts and proposals for Western Australia to secede, none have gained enough widespread support or momentum to result in any serious threat to the state's place in the Australian federation.
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Frequently asked questions
No, it is technically possible but extremely unlikely. There are constitutional barriers to states seceding, and it would be costly to set up essential services like armed forces and a public health system.
Western Australia has a long history of discontent with the Australian government. The state has a grievance about tax revenues, particularly the share of the goods and services tax (GST) it receives from the federal government.
Perth would presumably be the capital of a seceded Western Australia. The state would need a new currency, and it would have to fund its own military and provide passports for its citizens. Western Australia would instantly become the richest mini-state in the world.
Yes, in 1933, 68% of the state voted to secede. However, the pro-secession government that proposed the referendum was voted out of office, and Britain ruled that it could not help amend the Australian Constitution.
