Chamber of Commerce urges Productivity Commission to retain current GST distribution model

The Launceston Chamber of Commerce urged the Productivity Commission in Hobart on Friday that Tasmania’s share of GST should not be altered.

Appearing before the Commission in support of the Chamber’s submission on the review of the Horizontal Fiscal Equalisation system, the Chamber strongly urged the Commission not to make any changes.

“Tasmania has been well served by the current distribution model and to change this would place unnecessary hardship on the Tasmanian economy,” said Chamber of Commerce Executive Officer Neil Grose.

“Through prudent management, the current state government has managed to improve the key economic indicators in the Tasmanian economy to their current positive level.

“For Tasmania to lose between 1.2% and 2.6% of GST distribution would plunge the state back decades.

“While the Chamber of Commerce would always maintain that governments can do better in terms of managing budgets, for Tasmania to continue its current upward trajectory, the state needs a stable and predictable level of GST income.

“GST is a state tax, and its distribution takes into account the ability of each respective state to raise revenue from other sources. Western Australia’s proportion is low because it has the revenue stream of a huge mining resources sector. The fact that WA have been unwise in their use of those funds is no reason for Tasmania to be adversely effected.

“A strong economy relies upon a strong community and the nature of Tasmania’s socio-economic profile is such that our community relies heavily on government initiated funding.

“Irrespective of the rights and wrongs of that profile, none-the-less Tasmania would be worse off with an adverse redistribution finding from the Productivity Commission.

“GST funding is untied, and allows the state government to allocate this to fundamental sectors such as health, education and emergency services.

“Should the Productivity Commission ignore the united position of the state government, opposition and key business groups, in the Chamber’s opinion the transition should be managed over a sustainable period of years rather than months.

“It would be parlous for the state’s economy for a reduction to be implemented in a short period of time.

“The Launceston Chamber of Commerce urges the Productivity Commission to retain the current method of redistribution of GST in the best interests of the Tasmanian economy,” said Mr Grose.
Neil Grose Executive Officer, Launceston Chamber of Commerce