Former treasurer says WA’s GST deal is ‘the greatest public policy decision this century’

Former state treasurer Ben Wyatt has labelled WA’s 2018 GST deal “the greatest public policy decision of the 21st century” while Premier Roger Cook has claimed that the eastern states “hate us because we are successful”.

The comments follow the publication of the Productivity Commission’s interim report released on Friday that labelled the 2018 deal a “mistake” that could end up costing Australian taxpayers up to $12 billion a year if it’s not overhauled.

Under the 2018 deal, WA is guaranteed a minimum return of 75 cents for every dollar of GST raised in the state, or a share no lower than the lowest distribution attributed to New South Wales or Victoria.

This means that if NSW receives 82c in the dollar and is below the amount Victoria earns – as it is in the current distribution – WA also earns the same.

According to Bankwest Curtin Economics Centre director Professor Alan Duncan, under a return to the pre-2018 deal, one of the options proposed by the Productivity Commission, WA could lose up to $6 billion per year in GST distribution.

Wyatt, who was the state treasurer when the 2018 GST deal was done with then-federal treasurer Scott Morrison, said the distribution floor deal was discussed in the kitchen of then finance minister and WA federal MP Mathias Cormann.

It was put in place after a collapse in Western Australia’s share of the GST despite the state being in a domestic recession caused by the end of the decade’s mining boom.

Morrison came up with a new system that topped up Western Australia’s share until it received the equivalent of 75¢ for every dollar of GST notionally raised by the state.

A “no-worse-off” guarantee was put in place, which has been extended by the Albanese government, to 2030, that ensures the GST of every other state and territory is not reduced.

“We ended up having a conversation in Matthias’s kitchen, where he presented what he thought would be the deal,” Wyatt told an audience at a business breakfast on Wednesday.

“And that was where he presented how we anticipated the floor to work.

“And the rest, I guess, is history. It was an extraordinary couple of hours at Mathias’ house.”

Wyatt then labelled the GST deal the greatest public policy decision of the 21st century.

Speaking to the ABC on Wednesday morning, Cook repeated that an attack on WA’s GST share is an attack on WA.