A FAIRER GST

The Government has announced its intention to alter the way GST revenue is shared across the states.

Citing the finding of the Productivity Commission that the effects of the mining boom created volatility in GST distribution, the Government will introduce:

– A new Horizontal Fiscal Equalisation (HFE) Benchmark

– A permanent in-system GST relativity floor, and

– Provide transitional assistance.

The relativity floor will guarantee that Western Australia retains 75 cents per dollar of GST raised in the state.

These reforms will be legislated, and will deliver an estimated $9 billion over the next ten years.

“All states and territories will be better off. We will have a fairer and more sustainable system,” Treasurer the Hon Josh Frydenberg MP said.

In August this year, the Opposition Leader, the Hon Bill Shorten MP, August pledged a unity ticket with the Coalition on the issue of GST, but Labor appears to be concerned that the proposed laws do not adequately guarantee revenue for all states and territories.

In response to the proposed changes, the Shadow Treasurer, the Hon Chris Bowen MP, said that “as we review the legislation, we will be seeking answers about why this guarantee has been excluded.”

“There should be a proper framework put in place for any changes to the GST distribution and for future Commonwealth top-up payments,” he said.