The Turnbull Government has announced a major review of the Goods and Services Tax (GST) distribution system, aiming to address Western Australia's low share of GST revenue. The move is seen as an effort to bolster political support in the state, where the GST carve-up has been a contentious issue.
Western Australia is set to receive only 34 cents for every dollar of GST revenue it generates in the next financial year, a figure widely criticized as unacceptably low. The current distribution formula was identified as a key factor in the Liberal Party's heavy defeat in the March state election.
Finance Minister Mathias Cormann has been leading behind-the-scenes lobbying for the review. In a submission to the OECD, Cormann expressed support for a deal that would ensure a fairer share of GST for Western Australia.
The review is expected to examine the methodology used to allocate GST revenue among states, with the goal of addressing disparities that have left Western Australia at a significant disadvantage. The government hopes the review will help restore confidence in the GST system and improve the state's fiscal position.
