 | | ABC Analysis: Monday 20 April 2015 |  | | Analysis: Colin Barnett backs himself into a corner on GST | |  | | WA Premier Colin Barnett has had an uneasy relationship with BHP and Rio Tinto for years, which has become a major factor in the constitutional fight over the GST, writes ABC Business Editor Ian Verrender.
Barnett's attempts to simultaneously whip up fury in his home state and garner sympathy from the rest of the federation over the apparent injustice meted out on his state through the GST allocation appear to have backfired spectacularly. In the process, he has created dangerous battle lines on two fronts. One revolves around the constitution, which has generated vigorous arguments across the nation. The other, however, goes to the heart of capitalism and, in particular, the role of competition.
You can understand why the panic has set in. With iron ore now below $US50 a tonne, and with little chance of any recovery for years, Western Australia looks like emerging from the greatest resources boom in history an economic basket case.
But by attacking the majors, Barnett is providing tacit support for Fortescue founder Andrew Forrest's call for an iron ore cartel, where Australian producers curb production in an attempt to inflate prices. And that's an uncomfortable place for a Liberal Premier to find himself.
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