GST: The real travesty of the WA deal

Already a subscriber?To critics, it’s one of the worst public policy decisions of this century. But to advocates, it’s a simple tweak that addresses a gross inequity.

Anthony Albanese writes and signs a ‘No Change To WA GST’ pledge on the arm of a reporter last month.The deal has been a fiscal windfall for WA, which would have only received about 12¢ in the dollar in 2024-25 based on the previous formula, which penalised the state for its ability to raise billions in mining royalties.The 75¢ floor means WA – the country’s richest state on a per capita basis – will receive $6.

By next year, the top-ups will have cost the federal government almost $18 billion, and a few billion more in so-called GST transition payments.Updated government projections show the GST deal will cost $39 billion over a decade, while eminent economist Saul Eslake nowHigh commodity prices lift WA’s royalty revenue, but lower its GST allocation since other states become relatively more needy.

The Albanese government has wholeheartedly signed on to the agreement, given Labor’s ability to hold its nine federal seats in Western Australia is critical to its electoral fortunes.for a further three years to 2029-30 as part of an agreement to try to get states to take more responsibility for disability-related spending to take pressure off the National Disability Insurance Scheme.

It means that state governments in poorer jurisdictions like Tasmania or South Australia can fund services of the same quality as richer states like NSW.The grants commission considers states’ own revenue-raising capacities and the varying cost of delivering services due to population sizes and other variables such as the extent of Indigenous disadvantage.

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