Perrottet, McGowan in GST standoff

Dominic Perrottet has refused to entertain any overhaul of the GST until the system is changed so it ‘does not penalise NSW’ bringing a swift rebuke from WA.

Dominic Perrottet has long argued the allocation of GST put a heavy financial burden on NSW and Victoria while WA‘s mining-driven economy has boomed. Picture: NCA NewsWire / Flavio Brancaleone

NSW Premier Dominic Perrottet has refused to entertain any overhaul of the GST until the system is changed so it “does not penalise NSW”, in comments that brought a swift rebuke from WA Premier Mark McGowan.

Mr Perrottet said on Sunday he supported GST reform but would not be in favour of broadening the base or increasing the rate of the tax “under the current system”, which effectively subsidised other states such as Western Australia.

Mr Perrottet has long argued the allocation of GST put a heavy financial burden on NSW and Victoria while WA‘s mining-driven economy has boomed.

“I would not be in favour of broadening the base and increasing the rate of the GST under the current system, because the current system penalises New South Wales, when we continue to subsidise other states,” he said.

However, Mr McGowan said NSW was already at a significant advantage to WA on GST revenues, with NSW receiving back 96c of every dollar of GST spent compared to WA’s 70c. He said the “bleating and carrying on” by NSW and others should stop.

“The other states just want Western Australia to be the automatic teller machine for the nation, and for us to continue to pour money into them because of their poor budget management. I think West Australians are sick of that,” he said.

The commonwealth, Mr McGowan said, used tax revenues generated by WA to help pump tens of billions of dollars of financial support into NSW during its recent lockdown.

As NSW treasurer, Mr Perrottet last month labelled Mr McGowan the “Gollum of Australian politics”, amid renewed wrangling over GST revenue. “You can just picture him over there in his cave with his little precious, the GST,” Mr Perrottet said, in reference to WA’s record breaking $5.6bn budget surplus.