Hon Christian Porter BA(Hons) BEc LLB(UWA) MSc(Dist)(LSE) MLA

Hon Christian Porter BA(Hons) BEc LLB(UWA) MSc(Dist)(LSE) MLA

Former Treasurer; Attorney General

    GST cut another slap in the face for WA

    24/02/2012 12:00 AM
     
    • WA’s GST share to fall to 55 per cent in 2012-13
    • Preliminary modelling indicates our GST share may fall to 27 per cent by 2015-16
    • Federal Labor Government continues its push to take more GST from WA
    Treasurer Christian Porter has described the further cut in Western Australia’s GST share proposed in the Commonwealth Grants Commission’s (CGC) 2012 Update report as a slap in the face for all Western Australians.

    The report, which was released today, recommends that the Federal Labor Government slash WA’s share of GST grants from the already low 72 per cent to only 55 per cent in 2012-13.

    This will result in a fall in our GST grant of $598million in 2012 13, which will greatly increase the current $1.4billion shortfall in WA’s GST grants compared to a full population share.  This means that WA’s share of GST would be the lowest of any State and the lowest drop in GST share for any State in the history of the GST grants process.

    Mr Porter said the latest cuts highlighted the urgent need for reform to the GST distribution arrangements.

    “As a result of the CGC’s proposed cuts, WA Treasury preliminary modelling is now predicting the WA share of GST grants will fall to as low as 27 per cent in 2015-16,” he said.

    “If the Federal Labor Government continues to pillage this State’s share of the GST, there soon won’t be anything left to take.  On current trends, before too long, WA will receive nothing at all from the GST pool.”
     
    The Treasurer also said that contrary to some prior media reporting, only a small fraction of the proposed cut would help compensate Queensland for the financial impact of recent floods.

    “Nearly all of this cut is plain and simple a penalty for WA’s ongoing economic success and it will severely constrain the State Government’s ability to continue investing in the infrastructure and services needed to grow WA’s resource sector, which is propping up the national economy,” he said.

    “This cut will see WA being further penalised for growing its economy and producing jobs, while at the same time rewarding those States which generate revenue from gambling.

    “The State Government has long predicted our GST share would fall to about 60 per cent in 2012-13.  The Federal Government continually denied this would happen and have been proven very wrong with today’s cut being even worse than WA forecast.

    “Taking a further $598million from the WA Budget in one year is unfair, it’s destroying WA’s capacity to keep growing the nation’s most successful economy and it makes planning a State Budget very difficult.

    “WA managed to survive the global financial crisis, but surviving the Gillard financial crisis is proving challenging.

    “Compared to our full population share of the GST, a 55 per cent share will cost WA about $2.4billion each year - and this is only the tip of the redistribution iceberg.  Each year, the Federal Government takes about $14billion more in revenue out of WA than it puts back into the State.”

    Mr Porter has called on the Federal Government to fix the GST distribution debacle now.

    “We presented reasoned and balanced reform recommendations in our submission to the current review, including a 75 per cent floor, and the Federal Government needs to act,” he said.

          Fact File
    • WA receives the lowest share of GST grants, while Victoria is next lowest at 92 per cent, and NSW and Queensland also slightly below 100 per cent.  Other States and Territories get well over 100 per cent
    Treasurer's office - 6552 5600