WA To Receive Improved Share in Federal Government GST Fix

Western Australia is set to become $4.7 billion better off, following the Federal Government’s proposal to overhaul the nation’s current distribution of its GST.

Federal Treasurer Scott Morrison announced there will be changes to the allocation system that will put more money into WA over eight years, while not leaving any state or territory worse off.

The overhaul would lift WA’s return to 70 cents in every dollar of GST payments it made from next year, giving the state $1.4 billion dollars over the next two years.

Its 70 cent “floor” would eventually lift to 75 cents by 2024-25.

The Federal Government had rejected proposals from the Productivity Commission’s review of the GST system, but the new reforms will need to be agreed to by all states and federal Labor before they can be implemented.

Federal Finance Minister Matthias Cormann said the changes were part of the Federal Government’s goal of ensuring “that every other state is better off.”

“That was our commitment, to get a better fairer deal for Western Australia, to get a better deal for our national economy and to do so in a way that was also fair to do so in a way that was also fair to every other state around Australia.”

“We do recognise because it’s important in a federal for stronger states to provide appropriate levels of support.

WA Treasurer Ben Wyatt said it was a solution and a compromise that would work for all states, while benefitting WA.

“This is something that can be landed by all the states and the Commonwealth government,” Mr Wyatt said.

“Once we’re above 75, it is very unlikely that any state will then come down below that particular threshold.”

“It’s not everything that the WA state government wanted, but I think what we’ve got there is something that can be achieved.”

No Plans For Cost of Living Cuts

Mr Wyatt said he did not have any concrete plans for the money as yet.

“What I will do at this point is not start spending money that hasn’t landed in the WA government’s account,” Mr Wyatt said.

“It’s not something that I intend to start spending.”

However, when questioned about it would mean lowering the cost of living, the treasurer did not say if bills would fall but said Western Australians would benefit.

“Everyday West Australians will most certainly get something out of this standing still,” Mr Wyatt said.

“That is of course, lower levels of debt, lower interest payments, making more money available for things like health spending, education spending, law and order, the things that we want to spend money on.”

“Pay Down Debt”: Nahan

The State Opposition has welcomed the Federal Government’s response to the Productivity Commission review.

Opposition leader Mike Nahan said the government had made the right decision to introduce the reforms.

“We have long said structural reform of the distribution of the GST is required and today the Turnbull Government has delivered,” Dr Nahan said.

He said the McGowan government now needed to ensure federal Labor supported the changes.

Dr Nahan agreed with Mr Wyatt that the government should not start spending the money before all states and Federal Opposition agreed to the overhaul, however, he believed that the State Government needed to make paying down state debt a priority.

“The further additional revenue the state will receive from today’s reforms, above the forecast estimates, is a windfall. As such it should be put towards the Debt Repayment Account,” he said.

“If the McGowan Government spends the windfall on anything other than reducing debt, it will shred yet another of Mark McGowan’s election commitments.”

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