Royalty boom to cost Queensland in GST carve-up

Queensland’s portion of the ­nation’s GST carve-up is set to fall below its share of population for the first time since 2013.

Queensland Treasurer Jackie Trad. Picture: AAP

Queensland’s portion of the ­nation’s GST carve-up is set to fall below its share of population for the first time since 2013, as the Palaszczuk government books a record $5.1 billion in resource ­royalties this financial year.

Despite gloomy predictions of slowing demand for Queensland coal, Treasurer Jackie Trad will today forecast an annual operating surplus of $524 million — a $376m improvement since June, driven by a $678m royalties windfall.

The coal boom coincides with sliding stamp duty revenues across NSW and Victoria, eroding Queensland’s claim to a bigger share of GST revenue collected by the commonwealth.

Ms Trad last night said GST revenue forecasts had been revised down by $772m over the next four years to $59.3 billion.

“Under current arrangements and current forecasts, as the GST pool grows, Queensland is getting pushed further to the shallow end,” she said.

The Commonwealth Grants Commission, which administers the GST distribution formula, last month released a discussion paper suggesting a tweak to how royalties were assessed.

Josh Frydenberg ­kiboshed the idea after West Australian Labor Treasurer Ben Wyatt said the move could cost his state more than $200m a year.

Ms Trad said that decision by the federal Treasurer would “come at a big cost to Queenslanders”.

“We’re paying our fair share, but the Morrison government won’t consider the independent umpire’s suggested reforms to make GST distribution fairer and more efficient,” she said.

Mr Frydenberg said legislation passed in Canberra last month “determined once and for all” the question of how royalties would be considered.

“Under our reforms to the GST, an additional $9bn in extra untied funding will be delivered to the states and territories over 10 years and an additional $1bn in perpetuity once fully implemented,” he said at the time.

Analysts predict coal prices will decline over the next four years.

Additional reporting: AAP