SA Treasurer Tom Koutsanton laments ‘unfair’ GST settings as WA rejects independent review

South Australian Treasurer Tom Koutsantonis has urged West Australians to remember who bankrolled the mineral-rich state before its mining boom as division deepens over a federally ordered independent GST review.

The former Coalition government ordered the Productivity Commission to probe 2018 GST reforms that introduced a 75 per cent floor aimed at preventing Western Australia’s share from dropping too low.

To avoid other states and territories losing out, the federal budget topped up the total pool.

Nine years on, the Productivity Commission’s interim report gave a scathing review of the changes, declaring them a “costly mistake” that has “made the system less equitable and more complex while costing Australian taxpayers almost $23bn to 2024-25”.

West Australian Premier Roger Cook has accused the “east coast clowns” behind the interim report of launching “an attack on every hardworking Western Australian”.

Mr Koutsantonis on Monday pushed back, putting the two Labor state governments at polar opposites of the nationwide debate.

“The Productivity Commission has done an exceptional job, and what they’ve basically found is the changes made by the Morrison government made Australia unfairer and Western Australia richer,” Mr Koutsantonis told the ABC’s Radio National.

“Now, any independent analysis of this Productivity Commission interim report would show what (GST) does is unfairly … immorally backs a state that does not need the assistance it’s getting at the expense of other states that do need assistance”.

He went on to “remind” Western Australia that before the iron ore boom last century “what helped Western Australians have the equal level of service that was on the east coast and other parts of Australia was HFE, and it was those bigger states subsidising Western Australia”.

HFE, or horizontal fiscal equalisation, is redistributing federal revenue among the states and territories.

Originally published as SA Treasurer Tom Koutsanton laments ‘unfair’ GST settings as WA rejects independent review