SA received nearly $1bn extra in GST over past financial year, Federal Budget papers show
SA has received a massive unexpected boost in extra GST over the past financial year, budget papers show – here’s why.
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South Australia has received nearly $1bn more in GST payments than originally expected.
The huge increase was thanks to businesses paying GST debts quicker than expected, and more people shopping as COVID-19 restrictions eased.
It resulted in the largest upwards revenue revision in the past 10 years, with total GST payments across the country increasing by a whopping $9.8bn over the course of this financial year.
Tuesday’s Federal Budget shows the government has actually paid SA $6.5bn in GST for the 2020-21 financial year, up from the $5.6bn originally allocated in that budget.
While the total amount was higher, SA’s share as a percentage remained the same, at 9.4 per cent.
The extra cash could boost SA’s spending capabilities, one month out from the State Budget.
SA will receive 9.3 per cent of GST next financial year, with a total take-home amount of $6.7bn.
The state will also receive $4.7bn in federal money tied to specific projects.
Starting from 2021-22, the federal government will inject $600m a year into the GST pool, followed by a further $250m a year from 2024-25.
In 2022-23, SA’s GST will come in at $6.8bn (9 per cent), which would be far less than the $7.3bn the state government was expecting to get by that point.
SA will then be paid $7.4bn (8.9 per cent) by the 2024-25 financial year.
Treasurer Rob Lucas said the extra GST was “good news” for SA, but the state was still worse off when compared with pre-COVID predictions.
“We were predicted in last year’s budget we were going to be $1.3bn worse off in terms of GST in 2020-21, but we ended up only being around about just under $400m worse off as a result of COVID,” he said.
“We are still worse off, but we are nowhere near as badly impacted by the GST writedowns as we originally anticipated.”
In February 2020, a Commonwealth Grant Commission review found SA should be entitled to less GST, due to its strong economic position and ability to raise revenue on its own.
The 2021-22 federal budget papers included an upward revision to nationwide revenue that was the “largest in the past decade”.
Increased domestic consumer spending led to a strong rebound in GST receipts, while more businesses paid their GST debts on time.
Meanwhile, elevated iron ore prices boosted company tax receipts, and the rapid recovery of the labour market led to more personal income tax being paid.
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