Major rift between Liberals, Nationals over royalties fund may hurt election prospects – ABC News

They just spent the best part of a decade governing Western Australia together, but relations between the Liberal and National parties have spent years flicking between detente and open hostility.

Over the eight and a half years of the Barnett Government, the two conservative parties often publicly squabbled over core policies even while three Nationals were key cabinet ministers.

And that was nothing compared to the bitter fights at election time, where the Liberals and Nationals would scrap fiercely for the same seats a use of money and resources that has long frustrated figures from both parties, who feel efforts would be best used on the main goal of defeating Labor.

Now the two opposition parties are firmly at loggerheads again, just two months out from an election the bookmakers consider Labor unbackable favourites for.

The Liberals are now fundamentally at odds with what the National Party considers its most defining policy.

And the rift could call into question whether the two parties would be able to form a stable and united government, if the opportunity were to arise.

The latest quarrel centres on Royalties for Regions, the fund the National Party convinced the Liberals to introduce on coming to government in 2008.

For the Nationals, Royalties for Regions is a crowning achievement a billion-dollar-a-year fund they argue has transformed life in regional WA.

For a Liberal Party trying to rebuild its economic credentials, the legacy is much more complicated.

By the end of the Barnett Government's days, the state budget was in an ugly state, with deficits worth billions and eye-watering debt totals.

According to a subsequent review of the spending of those years, Royalties for Regions was a key reason why finances hit the skids.

"We identified the Royalties for Regions program as probably the main factor that caused difficulties for the government," former under-treasurer John Langoulant said of his official review.

"The need to spend the annual allocations made to the fund, rather than govern the achievement of well-targeted and managed projects and programs over considered time frames, was a major mistake."

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With that in mind, the Liberals now say Royalties for Regions needs major surgery.

The party's policy, unveiled this week, calls for much tighter spending controls over the program.

And it warns that any new spending the Nationals want to initiate must be accompanied by savings elsewhere.

"It can no longer be used as a slush fund by any party," Liberal finance spokesman Steve Thomas said.

"The rules around this program have been too loose."

Opposition Leader Zak Kirkup argues it is a vital step to ensuring Royalties for Regions is sustainable into the future, with the Liberals arguing it is a plan to "save" the fund.

The Nationals see it very differently and have not been shy in attacking the Liberals since that announcement.

The party's leader, Mia Davies, has declared the Liberals to be "no better" than Labor, warning the Nationals would refuse to enter government with their conservative peers unless Mr Kirkup backed down.

"It will be a condition of government absolutely non-negotiable," Ms Davies said.

"Our support for Royalties for Regions is unwavering".

Rather than any suggestion of reining-in spending, the Nationals have spent years saying they will "reverse the cuts" to Royalties for Regions.

That refers to ongoing regional expenditure that used to sit in the regular budget but now comes out of the fund, meaning less money is available for other projects.

But the Liberals are scathing of that idea, arguing it would cost $2.8 billion to do that.

"No government with economic management credentials that it wants to keep would be doing that," Mr Thomas said.

As such, the policy divergence between the two is about as wide as it gets.

As much as it annoys plenty of them, the Liberals and Nationals need each other.

The Nationals cannot govern in their own right and the Liberals still would not have the numbers to do that even if they doubled the size of their parliamentary team.

And if circumstances fall the right way for them, they would surely find common ground and reach some sort of agreement to govern together.

But with fundamental disagreements over core policy within weeks of an election, they will have serious work to do convincing voters they offer a viable alternative to Labor in a time of crisis.

Originally posted here:

Major rift between Liberals, Nationals over royalties fund may hurt election prospects - ABC News