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Saul Eslake

Three reasons Victoria has joined Tasmania, SA as a beggar state

Unless it can substantially improve its productivity performance, Victoria will continue to be the butt of sneering from richer states.

The Commonwealth Grants Commission’s 2025-26 update of its recommendations on how revenue from the GST should be carved up contained a few more surprises than usual because it incorporated the results of the review of its methodology, which it does every five years.

One thing that wasn’t a surprise was that Western Australia will get $6 billion more in 2025-26 than it would have if the “rules” governing the distribution of GST revenues had not been altered by the Morrison government, with the support of Labor, in 2018. That support has continued and been extended by the Albanese government since coming to office in 2022.

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Saul Eslake is former chief economist of ANZ Bank and of Bank of America Merrill Lynch in Australia, and is now principal of Corinna Economic Advisory based in Hobart.

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    Original URL: https://www.afr.com/policy/tax-and-super/three-reasons-victoria-has-joined-tasmania-sa-as-a-mendicant-state-20250315-p5ljt6