View from The Hill: Pragmatism holds Albanese to bad GST carve up, but Productivity Commission remains burr under saddle

Anthony Albanese insists there will be no retreat from his promise that Western Australia’s over-generous slice of the GST will remain intact as long as he is prime minister, regardless of the Productivity Commission’s compelling argument for it to be scrapped.

“I’ve said it multiple times.

I’ve signed people’s body parts, for goodness sake”, he said when visiting the state this week.

Perhaps scrawling something on a reporter’s arm, as he did in 2024, gives a special character to a promise, distinguishing it from, for example, a pre-election commitment not to change the capital gains tax or negative gearing, or a pledge at Garma to always attend that festival while he is prime minister.

In fact, the strongest protection for that GST promise is that Labor now holds 11 out of 16 federal seats in Western Australia.

Conversely with the Liberals, who forged the WA deal under Scott Morrison – they desperately need to win some of those seats and holding firm to the GST agreement is seen as vital for that.

But the Productivity Commission is undeterred by the put-downs of its recent scathing interim report on the deal received from both sides of politics.

Under its chair, Danielle Wood, who was appointed by Labor, the commission is showing it is willing to join the fight for reform publicly.

On Tuesday commissioner Angela Jackson, a co-author of the review (which was required by legislation), went on News24 to argue its case – that the present heavy skew to WA in the distribution between the states is both costly and unfair.

She pointed out the changes in the first six years ended up costing almost $23 billion rather than the initial estimate of $5 billion.

“Further to that, what we found was that the intent of the reforms hadn’t been met”.

Not only were not all states better off, as was the intention, but WA was the only state better off as a result of the deal.

“What we found was that the reforms really have led to a system that’s far less equal in terms of its primary objective, and less efficient, and costing a lot more than anticipated,” Jackson said.

The commission will proceed to its final report, after a period for consultation.