Queensland premier doesn’t ‘agree with GST carve-up’
Queensland Premier Steven Miles has joined NSW in attacking the GST deal, saying Queenslanders ‘deserve their fair share’.
Queensland Premier Steven Miles has joined NSW in attacking the GST deal, which has left two of the nation’s biggest states with hundreds of millions in lower tax revenue, saying Queenslanders “deserve their fair share”.
A meeting between Jim Chalmers and state and territory treasurers ended in heated debate after Daniel Mookhey of NSW demanded the GST guarantee for Western Australia be scrapped and that the $89bn in GST revenue distributed according to population size, rather than via a complicated formula based on need and fiscal capacity.
After avoiding the storm that followed Tuesday’s determination by the Commonwealth Grants Commission, Mr Miles on Friday entered the fray, saying “we don’t agree with that GST carve-up”.
His state is the biggest loser from the reweighting of the GST relativities, and is set to receive $469m less in the next financial year, thanks in large part to booming coal royalties which the Commonwealth Grants Commission takes into account when splitting the GST pie.
Mr Miles, who faces a difficult election later this year, said “we think they’ve got it wrong, and we think Queenslanders deserve their fair share and we’ll make that point” in Friday’s meeting.
As public statements degenerated into a tit-for-tat slinging match, Victorian Treasurer Tim Pallas called NSW Premier Chris Minns “a mathematically challenged tool” for claiming Victoria was not contributing its fair share. It came after WA Premier Roger Cook – whose state will enjoy a $6.2bn windfall next financial year thanks to a deal made with the former Coalition government in 2018 – derided “whinging” east coast states.
The federal Treasurer on Friday launched a broadside against NSW’s demands for a greater share, saying states were receiving “billions and billions of extra dollars” from the commonwealth.
Dr Chalmers looked to play down the interstate war of words, however, saying “states wanting even more money from the commonwealth is not unprecedented or even unusual, it’s pretty standard”. “We recognise the pressures on state budgets and we ask them to recognise the pressure on ours,” he said. “There is more than one jurisdiction with budget challenges. It is easy but wrong to blame the commonwealth government for these pressures.”
Mr Minns on Friday, however, threatened to scuttle Anthony Albanese’s major policy priorities in areas such housing and the NDIS without a wholesale reform of the GST distribution that would guarantee his state a bigger piece of the pie.
The NSW leader doubled down on his criticism of the Commonwealth Grants Commission’s decision this week that leaves NSW with $310m less in GST in 2024-25 – and Victoria with $3.7bn more.
“We have to fix the system and move to a per capita system, where the states, based on population headcount, get the resources they need to run major metropolises,” he said.
“NSW’s approach to these meetings has changed … we’re expected to dip into our pockets for a whole bunch of reforms and initiatives driven by the commonwealth government. We can’t do that unless we get our fair share of GST revenue. And I’m not saying that to be petty or vindictive – genuinely I’m not – we want to come to the table and start figuring out fixing some of these long-range funding issues that the state faces.”
Mr Pallas said Victoria had consistently received less in GST than its share of the population, and reacted angrily to Mr Minns labelling Victoria a “welfare state”.
“He might not be the sharpest tool in the shed, but he is a tool,” Mr Pallas said.
Economist Chris Richardson said it was fair to raise concerns with how GST was shared, but that the first order of business had to be to reverse the 2018 decision that had left the rest of the country subsidising the richest state in the country, WA – a decision that he branded “a stunning mistake”.
He said the Albanese government’s $5.2bn in “no worse-off” payments to the other states meant the average worker was paying $400 a year of their personal income tax to WA.
“This is the biggest marginal seat spend that Australia has ever seen,” he said.
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