Chris Minns vs Mark McGowan GST battle on cards

WA Labor Premier Mark McGowan is facing a fight with his NSW ALP colleagues to hold on to the GST arrangement that has pumped billions of extra dollars into his state.

WA Premier Mark McGowan. Picture: NCA NewsWire / Philip Gostelow

West Australian Labor Premier Mark McGowan is facing a fight with his NSW ALP colleagues to hold on to the GST arrangement that has pumped billions of extra dollars into his state and helped make it the only one to run a budget surplus.

NSW Labor leader Chris Minns on Sunday said NSW was “entitled to more” of the GST, raising the prospect of the Albanese government having to ­ignore Labor governments in the two most populous states if it is to maintain current arrangements.

Asked to respond to Mr Minns’ latest comments, a spokesman for Mr McGowan said the federal government had already “categorically ruled out” changing WA’s share of the GST.

The spokesman blamed the latest tensions on the incumbent Perrottet government. “The real issue in NSW is the financial mismanagement of the Liberal-Nationals government, which has presided over record debt and record deficits – which has nothing to do with NSW’s GST share,” a WA government spokes­man said. “In fact, NSW has benefited from extra GST, as a result of WA’s strong economy and a larger GST pool.”

Under the deal introduced by the Turnbull government in 2018, WA is guaranteed to keep at least 70c of every dollar of GST revenue it generates. That rises to 75c in the dollar in 2024-25.

The billions of dollars of iron ore royalties WA receives every year would have otherwise meant the state’s GST share would have fallen to about 10c in the dollar under the equalisation formula previously used to carve up the GST pool.

The 2018 deal also included a no-worse-off provision for other states, which sees the share that would otherwise be lost to WA topped up by the commonwealth. That arrangement expires in 2026.

Mr McGowan’s decision in 2021 to appoint himself Treasurer was in large part due to concerns that other states would seek to unwind the GST deal.

He has repeatedly clashed on the issue with NSW Premier Dom­inic Perrottet.