Shock plan to strip $5bn GST revenue from Qld coffers

Frontline services and infrastructure projects in Queensland will be put at risk if the Albanese Government signs off on a plan to strip $5bn of GST revenue from the state’s coffers.

The Prime Minister, Anthony Albanese. Picture: Gaye Gerard

Frontline services and infrastructure projects in Queensland will be put at risk if the Albanese Government signs off on a plan to strip $5bn of GST revenue from the state’s coffers, Treasurer David Janetzki said.

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

It’s understood a significant coal royalty windfall between 2021 and June 30 led to less funding this financial year than last year.

Treasurer David Janetzki said the commission’s recommendations should “shock every Queenslander”.

Queensland Treasurer David Janetzki. Photo: Steve Pohlner

“What it says is that our state should be stripped of more than $5bn in GST revenue, it says the money should instead be given to Victoria and New South Wales,” he said.

“This is the biggest GST reduction from any state since the introduction of the GST in the year 2000.

“That’s $2.4bn less than we received this financial year, despite the national GST pool growing by $4.5bn over the year and every other state and territory receiving increased GST revenue.

“The national pie is bigger but Queensland is getting a smaller slice.”

Mr Janetzki targeted Federal Treasurer Jim Chalmers for his pre-election claim the state LNP government would gut Queensland like a fish.

“Little did we know Jim Chalmers planned to gut Queensland like a whale,” Mr Janetzki said.

Queensland received an extra $8.8bn in coal royalties last financial year compared to the period between June 2020 and June 2023.

The Commonwealth Grants Commission calculated Queensland’s GST entitlement will be $16.6bn in 2025 – $2.3bn less than the $19bn received in 2024.

Victoria is the big winner with an extra $3.94bn to $27.98bn while NSW has received an extra $1.29bn to $27.71bn.

The independent CGC uses an approach agreed to by all the states and territories in 1999, updated by the 2018 reforms. The No Worse off Guarantee ensures QLD receives the higher of its entitlement under the original approach (1999), or the reformed (2018) approach.

A source within the federal government noted Queensland agreed to the 1999 GST carve-up, updated in 2018 with the No Worse off rule.

Federal Treasurer Jim Chalmers. Picture: Martin Ollman

“This system is set up to make sure that all governments get their fair share of funding to be able to pay for schools and hospitals,” they said.

“Queensland does very well out of this deal.”

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

“Queenslanders should share fairly in the growing prosperity of the nation, prosperity we have contributed to time and time again,” he said.

“Without urgent intervention, the Albanese government will be placing the livelihoods of Queenslanders, including their access to critical infrastructure and services, at serious risk.”

Tania Constable, CEO of the Minerals Council of Australia. “Queensland’s coal royalty hike may have delivered a quick budget sugar hit, but the long-term consequences are now abundantly clear: falling GST revenue and weakened investor confidence. “This shortsighted cash grab by the former government has only increased sovereign risk, sending a clear message that Queensland is willing to shift the goalposts for short-term gain, without properly considering the long-term pain.”