Okay, let’s nail the furphy that the failure to obtain agreement with the West Australians could yet derail the health deal.

Wrong, wrong and wrong.

The myth persists that the Commonwealth can’t alter the GST without the unanimous agreement of the States. That’s based on the Intergovernmental Agreement reached between John Howard and the state premiers in 1999, where he promised there’d be no changes to the GST without their consent — partly to head off a scare campaign about GST rate increases.

But that was only ever a promise. It had no legal basis. As George Williams showed back then, it didn’t restrain the Commonwealth from any future changes. The promise was contained in the A New Tax System (Good and Services Tax) Act 1999 which says:

The Parliament acknowledges that the Commonwealth:

…(b)  will maintain the rate and base of the GST in accordance with the Agreement on Principles for the Reform of Commonwealth‑State Financial Relations endorsed at the Special Premiers’ Conference in Canberra on 13 November 1998.

But that’s an Act of the Commonwealth Parliament, and that can be changed however the Commonwealth likes.

Moreover, that commitment, even if it were legally-binding, only applied to the “rate” and “base”. On the health deal we’re talking about the allocation, not the collection, of GST. And in any event, that’s irrelevant because in late 2008 the Commonwealth and the states agreed to supersede that Agreement with a new Intergovernmental Agreement on Federal Financial Relations. The 1999 agreement is a dead letter.

The Federal Government can change the GST allocation mechanism any way it likes. The allocation is now governed by the Federal Financial Relations Act 2009, put in place to reflect the 2008 agreement, which was centred around reducing the plethora of special purpose payments from the Commonwealth to the states down to 5. On Intergovernmental Agreements, that Act only requires the relevant Commonwealth minister allocating GST revenue to “have regard to” the 2008 agreement and “any other written agreement between the Commonwealth and the State that relates to the financial assistance”.

As some of our finest jurists and most eminent judges have said: “have regard to” don’t mean jack.

Kevin Rudd, provided he can get the numbers in the Senate, could amend the FFR Act to take back 30% of the GST everywhere but WA. And he could couple that with a special arrangement for WA, or simply leave the status quo intact.

As the caveat about the Senate shows, this is primarily a political issue.

Which brings us to an annoying problem for the Opposition in all this: they’re already blocking the private health insurance rebate amendment bill, and they’ll go to the election blocking that, it appears.  The Prime Minister will make much of this blockage as a major threat to health reform, and Tony Abbott will make much of it as a broken promise. A double dissolution election will sort that out one way or the other. That’s not the issue.

The problem is there could be only three sitting weeks for the Senate before the election. That’s very little time for that leisurely chamber to get around to considering the Government’s GST amendment bill — especially if it’s not introduced until an agreement is reached with WA, which might be closer to June. If it is introduced then, it will need what’s called “T-status”, which is given to bills that must be introduced and passed in the same session (normally bills have “A” or “B” status which means they are introduced in one session but not considered for passage until the next, or even later).

If the bill is referred to an inquiry, as is the fate of most any bill these days, it will have to be a damn quick one to get passed before the election.

In the interim, the Government — despite having rushed this whole thing through in a matter of months — can cry obstruction and complain the so-called ‘States’ House’ is blocking and delaying a reform the states themselves have signed up to. If the Government is leaving WA’s GST intact and thereby not disadvantaging West Australians at all, it will look a lot like the Senate being willfully uncooperative. Well, even more than usual. The Opposition will have to figure out whether it wants to cop that grief, or just roll with the Government’s absurdly fast and highly-political agenda.

If you thought we could stop talking about health now, you might be wrong. We could be talking about it all the way until the passage of the bills.