Tasmania a winner under GST carve-up

The Tasmanian government’s ability to provide services will continue to be lavishly subsidised by interstate taxpayers under the latest GST carve-up.

Treasurer Jim Chalmers. Picture: NewsWire / Glenn Campbell

Interstate taxpayers will continue lavishly subsidising the Tasmanian government’s ability to provide services, with the latest GST giving the state an increased share of the consumption tax revenue.

Tasmania will be better off by $151m in GST in 2025/26 under the latest determination of the GST shares.

The Commonwealth Grants Commission’s latest decision means Tasmania — with 2.1 per cent of the Australian population — will receive 3.8 per cent of the revenue raised by the GST nationwide next financial year.

Tasmania’s share of the GST pool will rise from $1.82 for every dollar it collects to $1.84 — the highest for any state.

The state’s revenue from the GST will rise from $3.48bn in 2024/25 to $3.64bn in 2025/26.

Last year’s state budget estimated $3.519m in 2024/25 and $3.650bn in 2025/26.

The funding boost amounts to an extra $261 per person, taking the total to the equivalent of $6,290 per person.

By comparison NSW will receive $2,940 per person and Victoria $3,647 per person

Tasmania receives an outsizes share of the GST, largely driven by the states below-average revenue raising capacity, particularly in the areas of property taxes and mining royalties and

has high expenditure needs because of a relatively high proportion of people living in regional areas.

Liberal Senator Jonno Duniam.

Liberal senator Jonno Duniam said the figures showed an improvement in the state’s outlook.

“Labor tried to get away with dudding our state of $240m of GST payments. We were being treated as a second class state,” he said.

“Their about face only came through sustained pressure from the community. It is welcome that they finally came to the table to give us what was due.”

“You can’t trust Labor to have Tasmania’s back.”

In 2018, the Morrison Coalition government struck a deal in for Western Australia to receive no less than 75c in the dollar, but promised to leave no state worse off in the short term.

Federal Treasurer Jim Chalmers last year cut his own deal with state and territory leaders to extend the “no worse off” provision for three years until the end of 2029-30.

Tasmania’s GST share includes $120m in “no worse off” payments.

Western Australia is estimated to receive almost $6 billion more in GST payments in 2025–26 than it would have received under the pr32018 arrangements.

Grants Commission chair Mike Callaghan said making sure each state got their fare share so all Australians could enjoy equal access to services was an exacting task.

“With the GST pool estimated to increase from $91 billion in 2024–25 to around $95 billion in 2025–26, this is an important source of revenue for the states,” he said.

“In preparing its recommendations, the Commission has applied the GST distribution legislation and terms of reference issued by the Commonwealth Treasurer, both of which are underpinned by the goal of providing all states with the fiscal capacity to provide a broadly comparable standard of services to their residents.

“The Commission’s overall approach is designed so that the GST distribution is not influenced by states’ individual policy decisions.”

Originally published as Tasmania a winner under GST carve-up