Saffioti finds allies in NSW and Queensland as GST fight brews

The additional GST funds, Treasurer Rita Saffioti says, are helping WA invest in the infrastructure needed to support the next wave of major projects in the state.

West Australian Labor Premier Roger Cook together with Treasurer Rita Saffioti walking to the WA Parliament House prior to announcing their budget. Picture: NewsWire/Philip Gostelow

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West Australian Treasurer Rita Saffioti says she believes NSW and Queensland are increasingly supportive of her state’s bigger slice of the GST, which has pumped tens of billions of extra dollars into the treasury of Australia’s richest state.

Speaking on Friday, a day after handing down her state’s seventh straight surplus – a result again owed in no small part to the 2018 decision by the Turnbull federal government to introduce a floor that guaranteed WA retained at least 75c of every dollar of GST it generates – Ms Saffioti again defended those arrangements.

She said the additional funds from the GST floor were helping WA invest in the infrastructure needed to support the next wave of major projects in the state, which would in turn help support the national economy and Commonwealth coffers.

And while the likes of Victoria have long been vocal in their opposition to the current GST deal, Ms Saffioti said other states were increasingly waking up to the merits of the system.

“NSW has popped up and said ... ‘we should have a per capita share’. I say bring it on, because that would mean another $2bn to WA,” Ms Saffioti told a Business News breakfast in Perth.

“And Queensland are now siding with us a little bit, saying that the GST arrangement should not punish success. We’ve always said that.

“The Commonwealth Grants Commission process and the GST arrangements should facilitate growth and not punish success.”

WA collected more than $7.8bn in GST grants this year on its way to a $2.5bn operating surplus. Without the GST floor, WA would have only recouped around $1.8bn in GST as a result of the state’s ongoing mining royalty windfalls.

Ms Saffioti said she would not stop fighting to protect the GST deal.

“As I constantly argue to the other state treasurers, and to any eastern states commentator, without this deal we couldn’t be delivering economic infrastructure that’s supporting new projects,” she said.

“These new projects support Western Australian growth and Western Australian finances, but they actually support the Commonwealth national accounts and also the finances.

“So without a strong WA, you’re not able to build or facilitate the investment that’s growing the nation. So this deal is fundamental going forward.”

WA’s GST grant receipts are forecast to exceed $9bn for the first time next year and will hit $9.88bn by 2029, according to the state budget forecast.

The Victorian government noted in its most recent budget that WA and, to a lesser extent, Queensland enjoyed the highest levels of state revenue per capita thanks primarily to their large mining royalty incomes.

Victoria’s per capita revenues were the lowest in the nation and 5 per cent less than those of NSW.

Queensland and NSW will release their state budgets next week.