At the Western Australian Liberal Party’s state conference over the weekend, the Prime Minister said he would work with premiers to change the redistribution formula for the tax so that every state would be guaranteed a minimum share of its revenue.
WA Premier Colin Barnett has long unsuccessfully lobbied for an increase in his state’s share of GST revenue.
The state’s residents now receive less than 40 cents from every dollar they pay in GST – down from 79 cents in 2009-10. By contrast, South Australians receive $1.28 for every dollar, Tasmanians get $1.63 and Northern Territorians get $5.60.
But Weatherill said today that WA’s politicians had been intellectually dishonest about the impact of the tax.
“Western Australia always have taken a pretty intellectually dishonest view about the GST,” he told ABC 891 radio.
“For most of their existence they’re a net receiver state, and it’s only recently that they’ve actually become a donor state to the other states around the federation.
“And the way the GST system works is that for the first three years you get to keep all of the windfall – so they were busily … living up big on the windfall of the mining boom, and then what happens [is] it starts to gradually get equalised out so that other states get to share.”
He suggested Turnbull was trying to “divide and conquer” the states on the GST issue in order to distract from other substantive issues, such as health and education funding cuts, and reform of the national energy market.
South Australia’s soaring electricity prices will be high on the agenda at Friday’s Council of Australian Governments (COAG) Energy Council meeting.
“The whole thing does horribly look like a distraction designed to divide and conquer the states, so that … we don’t start talking about things like cuts to health-care funding, cuts to education funding and all the other difficult issues the commonwealth doesn’t want to talk about,” Weatherill said.
“It’s unusual to get this just after an election. If this were a serious idea you’d imagine it would’ve been spoken about before the election.”
He said he believed it was not possible to change the rules around GST redistribution in favour of WA without disadvantaging other states.
“It’s a fixed pool of money so the more you give to one state the less you have to give to other states – unless, of course, the commonwealth kicks the can and puts more money in but nobody thinks they’re interested in doing that,” he said.
“It either has to make a difference to WA and give them more money – in which case somebody else has to lose – or it makes no difference at all, in which case why would you bother?
“Wherever you live in the nation you should expect a similar level of service and there should be an adjustment to the revenues to allow that to happen.”
But Treasurer Scott Morrison defended Turnbull’s income-share guarantee proposal, adding that while changes would not be made to the GST anytime soon, the system was not functioning fairly.
“I think he’s making a pretty fair dinkum and obvious point that the system is not really working the way it should,” he told Sydney 2GB radio.
– with AAP.
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