More GST cash, but changes on the agenda
Posted on 12/17/18 5:03 PM
WA will receive 47 cents in every dollar of GST revenue this year, up from 34 cents last year.A crackdown on the illegal cash economy has given states and territories an extra $3.4 billion in GST receipts, but wider changes to the system are still in the works.
Western is the big winner, with its share of the latest carve-up rising from 34c in every dollar to 47c.
But Queensland and the Northern Territory will lose out in the 2018/19 GST distribution, which helps fund state schools, hospitals and other services.
The total pool of $65.8 billion in this financial year is up $3.4 billion, more than half of which comes from a crackdown on the cash economy.
Treasurer Scott Morrison met with his state and territory counterparts in Melbourne on Thursday, but said they didn’t discuss wider changes to the formula.
“Any arrangement, if there were to be a change, would need to have a robust transition scheme which would mean that states could continue to plan for their future with certainty fiscally,” he told reporters.
The Productivity Commission is examining how the formula could be changed to better account for shocks like the mining boom, with proposals to be handed to the government in May.
The overall level of funding will rise in NSW (up $519 million), Victoria (up $1.8 billion), WA (up $1 billion), SA (up $467 million), Tasmania (up $56 million) and the ACT (up $54 million).
However, it will fall in Queensland (down $401 million) and the Northern Territory (down $136 million).
Mr Morrison said the figures – especially for the NT – showed there was more work to be done on the GST distribution formula.
“It’s not an easy issue but it does require a very patient and a good faith discussion about how we proceed,” Mr Morrison told reporters before the meeting.
WA Treasurer Ben Wyatt said his state was on a “better trajectory”, but will still push for reform.
NSW Treasurer Dominic Perrottet said the system needed to stop “subsidising the inefficient states like Queensland and South “.
“We want to see NSW and Victoria rewarded for their strong position, rewarded for the reforms they take,” he told reporters.
Victorian Treasurer Tim Pallas said there didn’t appear to be anything broken in the way GST receipts are allocated, while SA Treasurer Rob Lucas said the new figures showed the system worked.
Queensland Treasurer Jackie Trad said the cut was significant to the state’s budget, but it was not unusual for GST revenue to change.
The big jump in Victoria was mainly due to population movement, while Queensland’s share fell because of improvements to the economy.
Labor leader Bill Shorten said the federal government had previously ignored WA’s “legitimate complaint” about a shortfall in its GST cut.