GST a State Budget blind spot for Gutwein, warns Labor’s Rebecca White

TREASURER Peter Gutwein hands down his budget in less than two weeks as uncertainty surrounds GST revenue.

Labor leader Rebecca White has questioned how the State Government will be able to forecast funding for the upcoming State Budget. Picture: MATHEW FARRELL

TREASURER Peter Gutwein will be flying blind on GST when he delivers the State Budget in less than two weeks, Opposition Leader Rebecca White says.

A Productivity Commission review into GST distribution among the states led to the Federal Budget leaving out projections for revenue to the states beyond next financial year.

The Federal Government is yet to decide on any changes to the current horizontal fiscal equalisation model that props up states with greater needs.

Prime Minister Malcolm has said Tasmania will not be worse off in dollar terms, prompting speculation the formula could change.

MORE: PM’S PLEDGE ON SIZE OF STATE’S SLICE OF GST

“They hand down their budget in two weeks time and they don’t know how much GST Tasmania’s going to get beyond next financial year,” Ms White said.

“So how can they forecast how much health’s going to receive, how much education’s going to receive, how they’re going to fund the commitments they made at the last election?”

Economist Saul Eslake has expressed concern that Tasmania could receive $367 million less in 2021-22 if only the dollar amount is guaranteed.

Ms White said Treasury estimates had shown Tasmania could lose as much as $600 million over four years.

She said Western Australia, which has long argued it is disadvantaged by the current GST model, had been lobbying hard for change in Canberra.

“Why hasn’t the Premier been in Canberra?” Ms White said.

“We’ve seen Western Australia do that just this week — Tasmania wasn’t there.”

Treasurer Peter Gutwein.

Economist Saul Eslake.

Mr Eslake said it was likely the budget would assume there would be little change, but he urged Mr Gutwein to present an alternative version taking the Prime Minister’s words literally.

That would mean a fall in the share of the GST pie from 3.7 per cent — or $2.5 billion each year — to 3.2 per cent, he said.

The second version would indicate what cuts would need to be made or taxes increased.

“The really conservative thing to do would be to take Mr Turnbull at face value and put in the same dollar amount,” Mr Eslake said.

“That would be provocative.

“He could put both scenarios in and say here is an illustration of what would happen if this is what the Federal Government decides.”

Premier Will Hodgman said the budget would take possible fluctuations in GST revenue into account.

“If there’s a volatility, a downturn in the GST, you need to plan for that as we’ve done in the past,” he said.

“We are well aware of the risk of any change to the GST distribution, the methodology.

“That’s why we are fighting tooth and nail to ensure that Tasmania’s fair share is properly recognised.”