Yes, WA should secede

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Via Domainfax:

Angry sections of the Western Australian Liberal party are pushing to launch a fresh attempt for the state to secede, in what members are calling “WAxit” – a nod towards Britain’s vote to leave the European Union.

…The WAxit idea is one of 25 motions to be put to this weekend’s state conference, potentially embarrassing Prime Minister Malcolm Turnbull who is due to address the gathering.

It calls for the party: “to examine the option of Western Australia becoming an independent state within the Commonwealth and answer the question ‘Should we try’ with a response to be referred to State Council no later than July 2018.”

In 1933, 68 per cent of Western Australians voted in a referendum to self-govern, butthe bid was overruled by the Commonwealth.

But the push for greater independence for the state is at odds with a renewed plea from the membership for Defence Minister Marise Payne to deploy more troops to Western Australia to protect the state from China.

One of WA’s long-running sores with the Commonwealth is the tiny share it receives of the GST revenues, which are divided amongst the states and territories.

There are two ways of looking at this, one cyclical and the other structural.

On the first, WA completely blew its fiscal boom. It was the Liberals that did it so they can go to buggery.

On the second, they are absolutely right that WA is ruthlessly exploited by the parasite states of the east which run enormous external deficits living high on the hog to offset WA’s huge surplus:

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ScreenHunter_16271 Nov. 22 17.21

So, the question of secession is muddied by the credibility of those putting it but the underlying drivers are certainly real.

If I were them I’d definitely secede. WA would instantly become the richest mini-state in the world. It could send an annual $3000 check to every denizen and still run in the black.

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Nor would it need Australia to defend it. It could buy an army of mercenaries with the enormously valuable WA peso.

Besides, the east would go bankrupt so fast, and its currency crash so low, that it could not afford to pay for its armed forced. They’d likely defect to WA to put food on the table.

Then WA could invade the east using its own army! Drag all of those fat consumers over as slave labour to work in the mines, making it even richer.

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It’s foolproof even for Young Liberals!

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.