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🇦🇺 Australia /Economy & Trade

Albanese sticks to lucrative WA GST deal amid state backlash

From ABC Australia · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

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  • Prime Minister Anthony Albanese will not change a lucrative GST funding deal for Western Australia, despite calls from other states and a Productivity Commission report recommending its overhaul.
  • State leaders are demanding a GST shake-up ahead of a national cabinet meeting, arguing the current system is inequitable and costly for their own budgets.
  • Albanese defended the deal, stating that additional payments to Western Australia have come from the Commonwealth and not from other states, and he is comfortable with that arrangement.

Prime Minister Anthony Albanese is facing renewed pressure from state leaders to overhaul the Goods and Services Tax (GST) distribution system. He has declared he will uphold a 2018 funding deal that significantly benefits Western Australia, despite a Productivity Commission report recommending its termination.

The current system isn't working, it leaves other states like Victoria exposed and goes against the core purpose of fair distribution.

— Colin BrooksVictoria's Labor Treasurer commenting on the Productivity Commission's interim findings.

The commission warned the deal has cost billions more than anticipated and exacerbates inequality between states. This stance puts Albanese on a collision course with premiers who are demanding a GST shake-up at the upcoming national cabinet meeting.

Victoria's Treasurer Colin Brooks echoed the commission's findings, stating the current system is unfair and disadvantages states like Victoria. Queensland's Treasurer David Janetzki also expressed concerns about the inequity and cost-shifting from the federal government, arguing Queensland deserves similar consideration as a resource-rich state.

I do have concerns that the inequity of the GST distribution, the consistent cost shifting from the federal government to the state government, is threatening the integrity of the federation.

— David JanetzkiQueensland's LNP Treasurer on the existing GST funding arrangements.

Tasmania's Treasurer Eric Abetz warned of potential GST revenue reductions for his state if the 2018 decision is not reversed. He invoked the principle of a "fair go" that underpinned the GST's introduction.

If the prime minister shows up for Western Australia and acknowledges their unique character as a resources state, the same should be applied to Queensland.

— David JanetzkiQueensland's LNP Treasurer on fair distribution of GST.

Despite the backlash, Albanese defended the Western Australian deal during a visit to the state. He asserted that the additional payments to Western Australia have not come at the expense of other states but from the Commonwealth, and he is comfortable with this. Western Australia Premier Roger Cook welcomed the prime minister's assurance, having previously criticized the Productivity Commission's report.

Australia was built on a simple concept, a fair go. This sense of fairness is what underpinned GST when it was first introduced.

— Eric AbetzTasmania's Liberal Treasurer warning of potential GST revenue reductions.
DistantNews Editorial

Originally published by ABC Australia in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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