Federal Treasurer reject request from Qld Treasurer to reject CGC recommendations

Jim Chalmers has returned fire after claims from the Queensland Treasurer that major infrastructure programs will be put at risk if the federal government signs off on a plan to strip $5bn of GST revenue from the state’s coffers.

Federal Treasurer Jim Chalmers. Picture: NewsWire / Glenn Campbell

Treasurer Jim Chalmers said he “does not intend” to take up David Janetzki’s request to reject the independent Commonwealth Grants Commission’s recommendation after the Queensland Treasurer said accepting it would put infrastructure projects at risk.

Mr Chalmers’ response comes after Mr Janetzki last week said frontline services and infrastructure projects in Queensland would be put at risk if the Albanese Government signed off on a plan to strip $5bn of GST revenue from the state’s coffers.

Queensland is set to receive $2.3bn less this financial year and $5bn by 2028 under the recommendation from the independent Commonwealth Grants Commission, despite every other state and territory receiving a GST funding increase.

Mr Janetzki wrote to Mr Chalmers calling on him to reject the recommendation or risk putting essential services and the forward infrastructure program at risk.

“I do not intend to do that and I think David knows that,” he told a press conference on Monday.

“The Commonwealth Grants Commission process is an independent process that takes place at arm’s length from the Commonwealth government of the day.

“Queensland was clearly expecting a reduction, they had booked part of this downgrade in their mid-year update, and they explicitly said at the time that there were further downside risks.

Queensland Treasurer David Janetzki. Picture: Lyndon Mechielsen/Courier Mail

“It’s not unusual for State Treasurers to want more money from the Commonwealth. It’s not unprecedented for State Treasurers to try and blame Commonwealth treasuries for pressures on their own budgets.

“The reason why there’s been this change determined by the independent CGC is because of a really extraordinary bounce back in coal royalties – that’s the other thing as well. And so something like $8.8bn extra in coal royalties over the relevant period compared to the distribution before that. So that’s a bit of perspective.”

Mr Chalmers said Queensland had done “really well” out of the Albanese Labor Government.

“(Queensland had received) billions of dollars in extra funding above baseline levels since coming to government; health, housing, schools, justice and the no worse off guarantee as well,” he said.

“We’ve committed $7.2bn for the Bruce Highway – a lot of other states would like to get their hands on $7.2bn. We are providing that for Queensland.”

When asked whether he would take the blame should the Queensland Government cut infrastructure and frontline service funding following a GST reduction, Mr Chalmers said the federal government shouldn’t be to blame.

“The state government shouldn’t be blaming the Commonwealth Government for pressures on their budget. We’ve all got pressures on our budget,” he said.

“This is not a decision taken by the feds. This is a decision taken by an independent arm’s length Commonwealth Grants Commission.

“Not forgetting as well, that $8.8bn in extra royalties. So nothing that the Commonwealth Government is deciding is putting extra pressure on the Queensland budget.

“It is not unusual for State Treasurers to try and pretend otherwise.”