‘Terrible for Australia’: Pressure mounts on PM to revise GST

Pressure is mounting on Anthony Albanese to act on official advice to change Goods and Services Tax (GST) settings, with NSW Premier Chris Minns declaring them “terrible for Australia”.

The Prime Minister this week joined his close ally, West Australian Premier Roger Cook, in dismissing initial Productivity Commission findings that 2018 GST reforms were “a costly mistake” that have “have made the system less equitable and more complex while costing Australian taxpayers almost $23 billion to 2024-25”.

The reforms, introduced under the Coalition, created a 75 per cent floor to stop Western Australia’s share dropping too low.

The federal budget has since plugged any funding shortfalls for other states and territories.

Fronting News Corp Australia’s Bush Summit in Dubbo, NSW, Mr Minns said on Thursday that “current arrangements aren’t working” for his state.

“From this state’s perspective, we get 26 per cent of GST revenue,” Mr Minns said.

“And the 2018 GST deal, as it applies to Western Australia, was meant to cost $5bn – it’s cost the feds $24bn.”

He said it must be “on the national agenda because all of our other arrangements depend on what our GST split is”.

GST is Australia’s vehicle for horizontal fiscal equalisation – redistributing federal revenue among the states and territories to make sure public services are funded.

Federal coffers propping up the total pool hinges on the commonwealth’s No Worse Off Guarantee, which is set to expire by decade’s end.

Appearing alongside Mr Minns, South Australian Premier Peter Malinauskas said if the guarantee is not extended “you’ll see services in South Australia, along with a whole bunch of other places around the country, become worse off and that will inevitably have a disproportionate impact on lower socio-economic communities”.

“And don’t take my word for it – just take the Productivity Commission’s word for it,” Mr Malinauskas said.

“They’re a bunch of independent economists who assess the policy settings as they stand today and adjudicated independently that it’s bad economically for the country.”

He said that if Canberra “is going to, in perpetuity, preserve the Western Australian arrangement, then they must, in perpetuity, preserve the No Worse Off Guarantee”.