Liberals Rally for Commonwealth to Secure WA's Fair GST Allocation
Federal Liberals have intensified efforts to ensure Western Australia retains its equitable share of GST revenue, calling on the Commonwealth to uphold the 2018 reforms that established a 75-cent floor. This move comes as the Productivity Commission conducts a review of the system, with bipartisan support in WA but opposition from other states.
Bi-Partisan Support for GST Reforms in Western Australia
Senior Liberal Michaelia Cash emphasized that the 2018 reforms corrected a historical injustice, noting that WA's GST share had plummeted to as low as 30 cents per dollar raised. In a submission on behalf of the WA Federal parliamentary team, she argued that this is not about special treatment but preventing the state from being penalized for its economic success. "We delivered these GST reforms in government because the old system was a profound injustice," Cash stated. "We are not going to stand by and watch that hard-won, legislated compact be weakened or unpicked."
The submission urges the Productivity Commission to recommend that the Commonwealth continue funding the 'no worse off' guarantee, which compensates other states and territories and is projected to cost $60 billion by 2030. It asserts that the Commonwealth can absorb this expense due to the substantial tax revenues generated by WA's resources sector.
Federal Government's Stance and Uncertainties
Prime Minister Anthony Albanese has repeatedly pledged "no changes" to the GST floor, a commitment he famously signed on a reporter's arm in 2024. However, in July, he declined to confirm whether the 'no worse off' guarantee would be extended beyond 2028, adding to the uncertainty. Federal Treasurer Jim Chalmers, speaking in Queensland, refrained from commenting on potential recommendations from the Productivity Commission, stating, "We've made it clear in the west and in the east that we want a fair deal for WA." He highlighted the review's purpose to refine the calculation mechanics.
WA Treasurer Rita Saffioti expressed confidence that the Prime Minister will honor his commitment, citing overwhelming public support from over 6000 submissions backing the 75-cent GST floor. "We've got industry backing it, government backing it, everyone in WA backing to keep our fair share of the GST," she said.
Opposition from Other States and Calls for Reform
Despite WA's strong backing, other states are advocating against the current system. Tasmanian MP Andrew Wilkie has called for a return to full horizontal fiscal equalisation, which could significantly reduce WA's share if iron ore prices remain high. He criticized WA's stance as "puerile bleating" driven by self-interest. Similarly, South Australia's Government argued that the existing system creates uncertainty and undermines fairness, stating it does not reflect the 'fair go' principle.
The ongoing debate underscores the tension between WA's economic contributions and national fiscal equity, with the Productivity Commission's review poised to shape future GST distribution policies.
