Federal budget another reminder of how unfair GST carve-up is for NSW

While every Australian household is sure to welcome the $300 sweetener handed out by federal Treasurer Jim Chalmers in Tuesday night’s budget, it’s fair to say the NSW government is feeling less than sweet towards their federal counterparts.

Mookhey has previously claimed the GST carve-up will cost the NSW budget $11.9 billion over four years, meaning the state is likely to lose its premium AAA credit rating. However, forecasts are notoriously fraught, as shown by the increased hit to NSW due to the smaller-than-expected overall GST revenue.

The angry debate over the annual allocation of GST between the states and territories erupted after the commission’s most recent report recommended cuts in Queensland and NSW and an unexpected $3.7 billion boost to Victoria.Senior economics correspondent Shane Wright revealed recently that the reclassification of the Coffs Harbour area alone, from outer regional to inner regional, cost the NSW budget more than $200 million in foregone GST.

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