Tony Abbott has dismissed as “trivia” the reports that Australia’s ambassador to France, Stephen Brady, offered to resign after ignoring instructions not to bring his partner to meet the prime minister on an official visit. Abbott said Brady had “always” been a friend and always would be.
Brady reportedly offered his resignation after he was told by Australian officials that his long-term partner, Peter Stephens, should not be at Le Bourget airport for Abbott’s arrival in Paris on Anzac Day.
Speaking at a media conference in Perth, Abbott said he understood “junior officials” had taken issue but it was not a concern for him, saying: “I’m the prime minister and I don’t normally concern myself with trivia.”
“My understanding is that there was some issue at the level of junior officials and I don’t concern myself with these things, all I want to say is that he is a fine servant of Australia, a really fine servant of Australia, he’s a friend of mine, always has been and as far as I’m concerned always will be.”
Abbott was in Perth to announce a $500m funding package for the state’s major road building projects, including the controversial Perth Freight Link, the extension of the Mitchell Freeway, and the construction of a new interchange on the Reid Highway at Malaga Drive.
The funding was promised to make up for the Commonwealth Grants Commission setting record low GST returns for Western Australia, which would see the mining state retain less than 30 cents in the dollar of its GST contribution.
The low GST rate, coupled with a 60% drop in iron-ore prices – WA’s main source of revenue – means the state’s deficit could climb to $1.5bn in its budget next week.
Abbott said the extra assistance was offered in recognition of the “rare difficult moment” that WA had found itself in. “This is what a sensible commonwealth government does in recognition of particular difficulties that individual states might from time to time find themselves in,” he said.
“Western Australia has not for nothing been known as the ‘golden west’ for quite some time, but this is a particularly difficult year for Western Australia and the commonwealth is standing by them.”
The prime minister pledged the funding at a Council of Australian Governments meeting last month after an unsuccessful attempt to get other states to agree to freeze GST returns at last year’s rates, which would have given WA 38 cents in the dollar, or $660m more, but said he was not expecting a backlash from other states.
“All the states should take heart form the fact that this is a government that wants to work with all of them constrictively and intelligently in the circumstances of the time,” he said.
He brushed off both a suggestion that the funding would be linked to economic reform and criticism that WA had wasted the proceeds of the mining boom, saying: “I think everyone would agree that Western Australia has been uniquely well run and that Western Australia has a really outstanding record.”
WA lost its AAA credit rating in August and the ratings agency Standard & Poor put the state on credit watch last month, saying its AA+ rating was at risk from falling iron-ore prices.
The state treasurer, Mike Nahan, is also seeking to push an $8bn through parliament to cover rapidly deteriorating revenue streams, bringing the total amount borrowed by the Barnett government since it came into office in 2008 to $21bn.
Nahan said the additional funding had arrived too late to be factored into next Thursday’s budget but said it would have an immediate effect. He said the commonwealth had agreed to reopen discussions about further assistance in next year’s budget at a later stage, depending on changes in the GST.
“The simple fact is, we have a highly volatile revenue flow,” Nahan said, adding that anyone who thought WA should have been able to predict the fall in iron-ore prices was “foolish”.
“I would have liked to have been able to predict it but, you know, I’m not Nostradamus,” he said.
Nahan said the extra funding meant the federal government would cover up to 80% of the cost of six road projects.
The premier, Colin Barnett, said the funding had not been tied to any economic reforms, despite comments from the federal treasurer, Joe Hockey, last month that WA should “restructure” its economy to receive more funding.
“It’s quite clear that the commonwealth believes we should have a higher level of privatisations than we’ve had, that’s a fair point, but it’s only at that level,” Barnett said.
He said there was “a level of ignorance, not in the PM level but across the media and general public opinion” about WA’s track record of economic reform, and said while his government would abolish the Potato Marketing Board, one of the economic “anomalies” listed by Hockey, “it will have zero economic impact in WA, it’s not a significant institution”.
Barnett said he and Abbott had discussed putting a floor in the GST allocations to prevent any state from receiving less than 50 cents in the dollar, but WA’s preference remained for a per-capita allocation.
