Jacob Greber, Mathew Dunckley, Julia-anne Sprague and Mark Ludlow
West Australian Premier Colin Barnett is challenging Tony Abbott to overhaul the way GST revenue is carved up after his state had its share of the $51 billion tax slashed to a record low.
As a furious Mr Barnett claimed WA was missing out on at least $2 billion a year under the latest Commonwealth Grants Commission distribution recommendation, Queensland emerged as the biggest winner.
For the first time in six years, Queensland will get more from the GST than it collects after a slump in revenue from coal royalties and stamp duty.
The independent commission said on Friday that WA should get an unprecedented low of 45¢ for every dollar of GST in 2013-14, down from 55¢ in 2012-13. It’s overall GST share will drop by $379 million to $2.49 billion, or 4.9 per cent of the total from 5.9 per cent in 2012-13.
“That is grossly unfair for a growing state where over 1000 people a week are coming to live,” said Mr Barnett, who argues WA should be getting $5 billion given it has 10 per cent of the population.
“What I find particularly galling is that for the first time in Australian history, a state’s share has fallen below 50¢ in the dollar. This and the mining tax will be the biggest issues at the forthcoming federal election.”
Federal Trade Minister Craig Emerson has criticised Queensland’s Newman government for cutting services. Photo: Arsineh Houspian
WA Premier lobbies Tony Abbott for a better deal
“He is at least prepared to talk about it. Julia Gillard has just ignored the issue.”
In contrast to WA, Queensland should get almost $1.06 for every dollar of GST in 2013-14, according to the commission.
This is up from 98¢ in 2012-13 and means its GST take climbs by $1.3 billion to $11 billion.
The commission said lower coal prices had reduced Queensland’s so-called “fiscal capacity” by $456 million, while a moribund property market had further eroded its stamp duty revenue.
“We have assessed that Queensland needs $696 million more GST than we assessed them as needing last year,” the commission said.
Federal Trade Minister Craig Emerson seized on the figures to slam Queensland Premier Campbell Newman for slashing services despite the fact it was getting more money from Canberra.
“The Newman government has run out of excuses,” Mr Emerson said. “The more the Gillard government puts in, the more the Newman government takes out,” from services.
severAL STATES KEEP THEIR RELATIVE SHARES OF GST
NSW, Victoria, South Australia, Tasmania and the ACT have kept their relative shares of GST, while the Northern Territory will get $5.31 for each dollar collected, down from $5.53.
NSW Treasurer Mike Baird welcomed his states slightly increased share but renewed calls for a system based on their share of population rather than the grants commission formula that estimates needs and revenue capacity.
“The states cannot continue to deliver the services they are responsible for without access to a fairer share of the national tax base,” Mr Baird said.
Mr O’Brien said the new relativity would still cost Victoria $207 million, as he declared the system was broken.
“Victorians will query why we are losing money from the GST while Queensland, with their massive mining royalties, are getting even more,” he said. “My beef is not with Campbell Newman, it is with an unfair grants formula.”
WA’s per capita product 54pc above national average
Bank of America Merrill Lynch economist Saul Eslake said WA’s demands for a greater share of GST ignored the fact the state’s per capita GDP was 54 per cent above the national average.
“That’s absolutely unprecedented,” Mr Eslake said.
“The simple version of this is that iron-ore prices have gone up and coal prices have gone down and that’s what’s driven the re-distribution from Western Australia to Queensland,” he said.
The grants commission justified the recommendation because WA’s resources boom meant its capacity to raise non-GST revenue out-paced every other state.
The commission said WA raised nearly $2200 per person from royalties in 2011-12, compared to the national average of $450.
South Australian Premier Jay Weatherill said: “We fought for a fairer share of GST distribution. It’s pleasing to see that the Commonwealth has accepted our argument.”
Mr Barnett described the carve up as a “gross inequity”, saying the Northern Territory with one tenth the population of WA would receive higher payments.
“The Northern Territory is a territory. It is the responsibility of the Commonwealth government. Essentially the Commonwealth is neglecting its responsibilities to fund services in the NT and letting WA by default fund the Northern Territory.”
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The Australian Financial Review
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