‘The country is starting to catch on’: Albanese warned that states deal will cost him votes

South Australian Premier Peter Malinauskas has warned Anthony Albanese he could lose vital seats across the east coast if he fails to resolve key problems with the way the GST is carved up among the states and territories.

As NSW Premier Chris Minns said the arrangement, which is on track to cost federal taxpayers $60 billion by the end of the decade, was terrible for his state’s residents, Malinauskas said voters were waking up to the fact the Morrison-era deal was not working for the entire nation.

Speaking to the Bush Summit in the NSW Central West city of Dubbo on Thursday, both premiers confirmed this masthead’s revelations that they wanted a key part of the 2018 WA GST deal made permanent.

The GST arrangement has become a political lightning bolt since the Productivity Commission released an interim report this month. The report found the deal was a mistake that had created perverse fiscal outcomes, almost all of which had benefited Western Australia at the expense of the rest of the federation and federal taxpayers.

A key element of the deal is a series of “no worse-off guarantee” payments, now worth about $6 billion a year, made to all states bar WA to ensure no state and territory is financially penalised by the deal.

The Albanese government has extended the guarantee to the end of 2030.

Malinauskas said while the GST deal was politically important to WA, where Labor now holds 11 of the state’s 16 federal seats, it was of growing interest to voters in his state and elsewhere because the inherent problems with the agreement were increasingly obvious.

“You can win every single seat in every single seat in Western Australia, but if you don’t win a majority of seats in the rest of the country, you still lose,” he said.

“The rest of the country is starting to catch on to the fact that the current arrangement is not okay.

“I’ve actually now got constituents in South Australia asking about GST revenue. That didn’t happen before because they understand that it is intrinsically linked to our capacity to deliver services that they rely upon.”

Minns said he had personally raised the issue of the GST deal at three separate meetings involving the premiers and Albanese.

“The reason for that is the current arrangements aren’t working for New South Wales, and we also think they’re terrible for Australia,” he said.

Minns said the blowout in the cost of the deal meant all Australians were paying for it.

He said the deal needed to be made permanent, instead of states like NSW being forced to negotiate extra cash out of the federal government for key services.