The Western Australian Government has finalised its submission to the review of the distribution of Goods and Services Tax revenue commissioned by the Prime Minister earlier this year.

 

The State Government is calling for significant reform to the GST grant system, with Treasurer Christian Porter calling for a 75 per cent floor in GST grants and a 50 per cent discount to the redistribution of mining royalties.

 

“The reform of the GST distribution system is imperative to restore confidence in State/Commonwealth financial relationships and remove impediments to growth in the national economy,” Mr Porter said.


“The current form of ‘fiscal equalisation’ is too extreme - it fails equity tests, penalises hard work, encourages welfare dependency and is now a divisive rather than unifying influence.”

 

Recent results show that the state is receiving 72 per cent of its total contribution to the national GST pool, with some estimates projecting that it was fall to 33 per cent within the next three years.

 

“The Federal Government should move immediately to introduce a floor on GST shares equal to 75 per cent of a State’s population share,” Mr Porter said.

 

“In 2011-12, a 75 per cent floor would have delivered additional GST revenue of $166million to WA, with the cost to other States being just 0.4 per cent of their total GST grants.

 

A copy of the state’s submission can be found here