Tasmania to enjoy bump in its share of GST

Tasmania will enjoy a bump in its share of the GST next financial year after changes to the formula used to share the tax between states. Here’s how much more the state will get.

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Tasmania will enjoy a $219m bump in its share of the GST next financial year after changes to the formula used to share the tax between states.

The figure represents an extra $377 per person in state government revenue.

The Commonwealth Grants Commission has released the latest relativities used for sharing the $89bn in revenue expected to be collected from the national consumption tax in 2024/25.

Tasmania’s share of the pie will rise from 3.8 per cent to 3.9 per cent next financial year, lifting receipts from $3.257bn to $3.476bn.

Tasmania will receive $1.82 for every dollar the state contributes, up from $1.79.

“Tasmania’s assessed GST needs increased largely due to a reduced relative capacity to raise mining revenue; below-average growth in property sales; revisions to socio-demographic composition data from the latest 2021 Census release [and] revisions to health activity data,” the Commission noted.

“Tasmania’s increase in assessed GST needs was partly offset by slower growth in assessed wage costs, strong growth in national urban transport investment and above-average growth of other Commonwealth payments.”

Treasurer Michael Ferguson said GST figures were subject to variation over time.

“Whilst the increase in Tasmania’s GST relativity is welcome, more accurate estimates of Tasmania’s future GST receipts will not be known until the release of the Commonwealth 2024-25 Budget in May 2024,” he said.

“It certainly won’t get near filling Labor’s $1bn spendathon.”

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

For example, Tasmania can only raise $157 per person from mining royalties, well below the national average of $1,379 per person.

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

Economist Saul Eslake said it was “outrageous” that Western Australia was getting “$6.2bn more than it should” under the GST deal, which has a floor of 75 cents in 2024-25.

“WA is the richest state in the country and it’s the only one running budget surpluses so this will allow it to run even bigger ones,” Mr Eslake said.

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

Originally published as Tasmania to enjoy bump in its share of GST