SA Treasurer takes on WA in GST stoush

SA Treasurer Stephen Mullighan has labelled an “incredibly unfair deal” favouring Western Australia

New Treasurer Stephen Mullighan at Government House after being formally sworn in March last year. Picture: Kelly Barnes

The brawl between the states over the GST carve-up is set to escalate with next week’s South Australian budget showing the state is $375m worse off thanks to what SA Treasurer Stephen Mullighan has labelled an “incredibly unfair deal” favouring Western Australia.

With former WA premier Mark McGowan using his political exit last month to warn tearing up the deal was “a red line” no party should cross, Mr Mullighan rubbished the current arrangements as “the greatest act of vandalism in our federation’s history” and vowed to fight for change.

Mr Mullighan told The Australian it was absurd that every other state was struggling post-Covid whereas WA enjoyed a greater GST share than ever when resources were further boosting state coffers.

He said next week’s budget would confirm that SA would lose $375m in anticipated GST revenue at the same time WA pocketed an extra $5.6bn under the revenue-sharing arrangements implemented by the Morrison government.

“This is a major pressure for every state and territory other than Western Australia,” Mr Mullighan said.

“That’s all coming out of GST collections that would otherwise go to SA and all the other states and territories. I am not overstating it to say that this new GST deal that was struck by the previous Coalition government is the greatest act of vandalism in our federation’s history.

“We have given billions of dollars to one state over every other state and territory, and it’s happening at the same time they are having one of the biggest mining booms they have ever had.

“It’s the only state that’s been able to deliver budget surpluses and amounts of largesse to its community the likes of which all of us would only ever dream of. And that’s because they’ve got this incredibly unfair revenue-sharing deal.”

SA Premier Peter Malinauskas, Deputy Premier, Dr Susan Close, and Treasurer Stephen Mullighan at Government House to formally sworn in as Premier. Picture: Kelly Barnes

His comments echo those of NSW Premier Chris Minns, who said last week that the resignation of Mr McGowan was “a great opportunity” to restart the national debate about GST share.

But new WA Premier Roger Cook has promised to take the same hardline attitude defending the arrangements as his predecessor, who in one of his final statements as premier said WA would punish any government, Labor or Liberal, if it altered the Morrison GST deal.

“The federal government has said they’re not going to change it, I believe them, and it would be politically deadly were they to do that,” Mr McGowan said last month.

“Obviously it’s a red line they should not cross. Any political party nationally that crosses that will suffer dire consequences in Western Australia so I think it’s here to stay.”

But Mr Mullighan said the job of managing economies outside of WA was being made harder in a post-Covid environment where spending had exploded, with inflation and interest rate hikes adding to the challenge.

Mark McGowan. arrives at Dumas House for his last day as Premier last Friday. Picture: NCA NewsWire / Sharon Smith

Despite this, Mr Mullighan said SA Labor would not be going down the path of the Andrews government in Victoria with special taxes to offset the losses from Covid spending. “Now is not the time to dialling up taxes. You won’t see that from us in next Thursday’s budget.”