WA Treasurer Issues Stark Warning Over GST and Iron Ore Royalties
In an exclusive move, Western Australia's Treasurer Rita Saffioti has delivered a forceful message to other states: if they attempt to claim a larger share of WA's GST, the state will aggressively fight to exclude iron ore royalties from the formula. This bold stance comes as the Cook Government submits its case to the Productivity Commission, which is currently reviewing the 2018 agreement that ensured every state receives at least 75 cents back for each dollar contributed.
Defending the GST Floor and Proposing a Royalty Discount
The submission, obtained by The West Australian, argues "in the strongest possible terms" that the GST floor must be preserved. However, it also includes a contentious Plan B: a recommendation for a 25 percent discount on the Commonwealth Grant Commission's mining revenue assessment. Ms Saffioti emphasizes that this moderate approach, inspired by Canada's 50 percent discount and supported by mining companies, aims to reduce the impact of high iron ore prices, which triggered nearly $5 billion in Commonwealth top-ups to other states in 2025-26.
Despite previous rejections by the Productivity Commission due to fears of other carve-outs, WA's Treasurer points to the total exclusion of poker machine revenue as a precedent. She criticizes Tasmanian MP Andrew Wilkie's submission, which dismissed WA's concerns as "puerile bleating," highlighting what she calls hypocrisy in his support for Tasmania's pokie revenue retention.
Clashing with Other States Over Fairness and Funding
Ms Saffioti adopts a more diplomatic tone toward South Australia's claims of a $500 million opportunity cost but accuses its leaders of "harping" ahead of their state election. She asserts that other states believe they deserve more money from Western Australians, citing unfair disparities in regional funding: Tasmania receives $1400 per person compared to WA's $230, despite WA being 37 times larger. The Treasurer argues the system is "grossly unfair and broken," with WA now contributing significantly more than it receives, especially from iron ore booms.
WA Treasury estimates a cumulative loss of $32 billion since 1942-43 from Commonwealth equalisation payments. The submission counters claims that the no-worse-off guarantee has become too costly, noting that higher iron ore prices have benefited the Commonwealth three to four times more than the increased expenses. Additionally, Ms Saffioti highlights inequities in other grants, such as a $15 billion road project in South Australia receiving over $7 billion in federal funds.
Political Promises and Future Implications
Prime Minister Anthony Albanese has repeatedly pledged no changes to WA's GST deal, even signing this commitment in ink on a reporter's arm in 2024. Ms Saffioti vows to hold him to this promise, regardless of the Productivity Commission's report due in August. As the GST pie has grown from $64.5 billion in 2018-19 to an estimated $95 billion this year, with WA royalties adding $39 billion to Commonwealth coffers, the stakes are high for inter-state relations and national fiscal policy.
