Western Australia Treasurer Rita Saffioti has warned that the Albanese Government could lose every seat in the state if it alters the current GST agreement. Speaking at a Chamber of Commerce and Industry breakfast in Perth on Tuesday, Saffioti defended the deal, which guarantees WA a minimum of 70 cents per dollar of GST, rising to 75 cents in 2024-25.
Under the arrangement introduced by then treasurer Scott Morrison in 2017, WA’s GST share had previously slumped to 30 cents in the dollar. The most recent official estimate put the cost to the federal government at about $39 billion over a decade, but economists Saul Eslake and Chris Richardson have independently reviewed the plan and concluded the actual cost is closer to $50 billion.
Richardson described the deal as “magnificent” for WA but a “massive mistake” for the nation, saying it allows WA to win at the expense of Australia. Eslake’s report called it “the worst public policy decision of the 21st century,” blaming federal politicians for prioritizing narrow political calculations over the national interest.
The reviews have put pressure on the Productivity Commission to reconsider the top-up system when it reviews the deal in 2026-27, especially given WA’s strong financial position. The state is forecasting a $3.7 billion surplus for the current financial year.
Saffioti said the state must continually prove it is a high-cost state to deliver services. In May 2023, former Premier Mark McGowan announced a $1.6 million investment to bolster a Treasury team dubbed GST “fairness fighters” to prepare arguments against any review of GST distribution. WA Liberal Leader Libby Mettam has called on Premier Roger Cook to seek a written agreement from the federal government promising not to backflip on the deal.
