Victoria wants GST reform to stop $1bn annual loss

Tim Pallas has escalated his attack on the Morrison government over the GST distribution, accusing it of short-changing Victoria of more than $1bn annually.

Victorian Treasurer Tim Pallas. Picture: NCA NewsWire / Andrew Henshaw

Tim Pallas has escalated his attack on the Morrison government over the GST distribution, accusing it of short-changing Victoria and warning it could cost the state more than $1bn annually.

The Victorian Treasurer said the state could lose that amount if the no-worse-off guarantee is ­allowed to expire in 2027 as part of the federal government’s “distorted GST carve-up”.

“The pain across the nation that will be felt makes no sense,” Mr Pallas said, as he and Premier Daniel Andrews spruiked Labor’s 2022 state budget.

“A state of two million people is getting an overwhelming share of the GST. Western Australia … is running massive surpluses and is likely to profit by a distorted forecast being put on the GST.”

The Treasurer said the commonwealth would remain in deficit for more than a decade with “no plan to deal with it”.

“Whilst they’re hurtling above 33 per cent debt to GSP without any strategy to deal with it, we are doing much better, much, much better – 26.5% of GSP as a percentage, effectively, of our respective economies.”

Mr Andrews also called on the federal government to give Victorians their “fair share while out spruiking the “pandemic repair” budget in the state’s outer west on Wednesday.

The Premier accused the federal government of making “cuts to health money” in Victoria while the state budget allocated more than $12bn worth of funding to the health sector.

“They’re taking $1.5bn away from our health system just here in Victoria in just a couple of months’ time,” Mr Andrews said.

He said Victorians were “sick and tired” of supporting services in other states with GST payments and urged the federal government to continue sharing eq­ually the cost of public healthcare.

“I think every Victorian is a bit sick and tired of our GST – GST paid by Victorian taxpayers – supporting services in other states,” he said. “A fair share of the GST will, of course, mean we can have more teachers, nurses, and better services in the state.”

Opposition Leader Matthew Guy attacked Tuesday’s budget, saying much of the health funding “isn’t new money”.

“They’re out there on a big-spending $12bn budget of which billions of it have either already been spent or are co-contributions with the federal government,” Mr Guy said.

“You cannot rely on what this government says. Case in point is this hospital in Melton (which) Labor promised four years ago (and) remains an empty field.