WA continues to press for fairer GST share

• WA puts its case for reform of the GST distribution in a submission to the Commonwealth Grants Commission (CGC)
• WA argues that the CGC's aims are not being achieved and proposes changes to the underlying principles for the distribution of GST 

Western Australia has tendered its first formal submission to the Commonwealth Grants Commission's (CGC) current review of its methods for allocating GST between the States and Territories, which is due to report in 2020.

The submission argues that the CGC's principles are implemented in a misguided manner and are not adhered to in practice.  As such, the commission's aims are not being achieved.

WA proposes a reformed framework that:

• Is simpler and more transparent;
• Allows governments to make policy decisions without direct GST consequences;
• Acknowledges that differences in States' economies partly reflect their policies;
• Is more in line with States' current fiscal circumstances; and
• Holds the CGC more accountable. 

A key proposed reform is that the CGC, as an administrative body, should seek clarification and approval from the Federal Treasurer (following consultation with States and Territories) on its choice of principles before commencing the implementation phase.

This will ensure the Federal Treasurer is accountable for giving the CGC a clear task to do, and that the commission is in turn accountable for its performance in this task.

Comments attributed to Treasurer Ben Wyatt:

"It became clear during their trip to WA that Prime Minister Malcolm Turnbull and Federal Treasurer Scott Morrison are keen to put the onus of leadership on GST reform onto the States and assume a position on the sidelines.

"That is disappointing but we will continue to fight for our fair share and use this review and every other available forum to press our case for reform.  I hope the commission understands the issues at play and has a greater appetite for reform.

"The methods used to distribute the GST are impenetrable, which disguises that they do not achieve their aim.

"Despite four years of domestic recession and very significant revenue write downs, WA's GST relativity is still very low at only 34.4 per cent of our population share.

"The current methods contain serious flaws, such as an assumption that differences in States' economic strengths are purely luck, rather than influenced by States' policies.

"I look forward to hearing the CGC's views on WA's proposed reforms when I meet with the commission this week."

Treasurer's office - 6552 5900