WA election: Liberal-National alliance hits breaking point – The Australian Financial Review

WA Nationals leader Brendon Grylls is livid over planned cuts to regional spending.

WA Nationals leader Brendon Grylls would rather send West Australians back to the polls than form a minority government with the Liberals if his alliance partner does not drop plans to redirect funding from his signature Royalties for Regions policy.

Less than 48 hours before West Australians go to the polls, Mr Grylls attacked Mr Barnett for plans to "realign" $800 million from the Royalties for Regions to underpina return to surplus in 2018-19.

Premier Colin Barnett defended the decision and warned Mr Grylls that as the major party, the Liberals set the agenda.

"If we are elected we will form government," he said. "We will form government and will invite the National party to be part of that but we are the major party and we will set the agenda."

If the Liberals are able to withstand an expected massive swing to Labor it is likely to only be able to form government with the support of the Nationals.

"While they are bigger than us, if you don't have the votes to form government then it means nothing," Mr Grylls said.

"I will not be part of any government that plans to take $800 million from Royalties for Regions." Mr Grylls said the move represented a 40 per cent cut to the overall program.

Asked if he could form government with Labor, Mr Grylls said Labor's cuts to Royalties for Regions would be worse.

He said both major parties were preferring to hurt regional residents rather than tap a new revenue source from BHP Billiton and Rio Tinto, referring to his $3 billion a year plan to lift a royalty charge for the two miners.

Royalties for Regions aimed to quarantine 25 per cent of the state's mining royalties for regional spending above and beyond general government expenditure.

The fund has been raided before in 2013 more than $500 million was redirected to general expenses. But this was done by agreement with the Nationals.

In a press conference twice interrupted by costumed protesters, Mr Barnett denied the Liberals' relationship with the Nationals had been damaged beyond repair. The Liberals infuriated the Nationals by cutting a preference deal with Pauline Hanson's One Nation. The Liberals will preference One Nation ahead of the Nationals in upper house seats.

"It is the middle of an election, people say all sorts of things," Mr Barnett said.

"Let's wait and see what the results are. Brendon and I get on fine, we always have."

It came as Labor released an independent assessment of its costings, which forecasta surplus of $205 million in fiscal 2020.

The Liberals' plan, costed by Treasury, would return the state to a$417 million surplus in 2019.

Shadow treasurer Ben Wyatt said Labor's forecast spendingof $2.78 billion over four years would be covered by $2.98 billionof funding.

The Liberals have attacked Labor for not sending its costings to Treasury.

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WA election: Liberal-National alliance hits breaking point - The Australian Financial Review