Keep the politics out of GST

The only way to avoid the annual GST distribution becoming an ongoing festering political sore is to stick with the current, independent Commonwealth Grants Commission process.

The whole point of having the Commonwealth Grants Commission is to provide independent advice on the distribution of GST and ensure it’s not politicised each and every year.

If we tinker with the system once, then every year, GST allocations will be based not on fairness and equity but on politics and polls.

It’s also important to set the record straight on how well Western Australia has done when it comes to their share of the GST.

During the initial stages of the mining boom, Western Australia benefitted from the GST distribution system. The surge in mining royalties filled Western Australia’s coffers, yet had a delayed impact on its GST revenue.

The Commonwealth Grants Commission estimates that the Western Australian windfall was in excess of $7 billion, a windfall that came directly out of the pockets of the other states.

Even the Western Australian Government’s own reports show that its share of the GST will rise significantly from 2016-17 onwards.

If there is a case made out for specific support for Western Australia, it should be dealt with bilaterally between Western Australia and the Commonwealth, outside of the GST distribution arrangements.

Any attempt to meddle with the decision of the independent umpire would be unprecedented and fundamentally detract from the fabric of our federation, and under no circumstances would we support it.
Peter Gutwein, Treasurer