How fair is the Western Australian GST share?

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For months, if not years, we have been hearing about Western Australia’s fair share, or rather the lack of it, with respect to GST payments to the States form the GST raised by the Australian Government.

Western Australia, under the current arrangements, receives just $0.34 from each $1.00 raised from within WA from GST revenue to the Australian Government. It clearly seems unfair. Particularly clearly unfair by direct comparison:

State/Territory GST reimbursement per $ GST Revenue:

  • New South Wales $0.877
  • Victoria $0.932
  • Queensland $1.188
  • Western Australia $0.344
  • South Australia $1.440
  • Tasmania $1.805
  • ACT $1.195
  • Northern Territory $4.660
  • Average $1.000

I am unsure why there is so much inconsistency in the figures above.

As I read the 2017 Overview from the Commonwealth Grants Commission as to how that body describes the differences in GST reimbursement to the States I get even more confused.

It reads: “In this update, New South Wales and the Northern Territory’s GST shares decreased markedly. For New South Wales, this was driven by an increased revenue capacity, principally because of its strong property market.

For the Northern Territory, this was the partly result of a fall in its relative population growth, which reduced its need to invest in new infrastructure. It also experienced a fall in its costs of providing services across most functions, notably schools, health and rural roads.

The other States’ GST shares increased. For Victoria, this is largely due to an increase in its share of national population growth, which increased its need to invest in infrastructure, and a relative increase in its costs of service delivery.

For Queensland, its increased GST share is largely due to a fall in its capacity to raise revenue from property, land and payrolls.

For South Australia and Tasmania, relative increases in their shares of national population growth acted to maintain their GST shares.

The ACT’s GST share increased, mainly due to an increase in its assessed disability services expenses.”

Sadly Western Australia is entirely omitted in that summary.

But wait, according to our Prime Minister speaking with ABC Radio in Perth on Monday 31 July, the population of Western Australia is slowly decreasing.

If we are more like the Northern Territory, then should not our GST reimbursement go up? A whole lot? But I see that Tasmania and South Australia are getting an increase in GST reimbursement because their proportion of national populations are said to be increasing. I don’t get it.

What I do understand is a simple, straight forward clause from the Australian Constitution that reads as follows:

“99. Commonwealth not to give preference

The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.”

Politicians everywhere – please get over the differences. If we are all Australian then we surely can equalise this GST reimbursement issue to a better extent than we are currently seeing. Why is it so difficult for our Federal Members, of most political persuasions, to find this obvious inequity so hard to overcome.

Finally, the following simple chart tells it all. Relatively WA has suffered at the hands of the Commonwealth Grants Commission for the past eight or so years, falling relatively very far behind the rest of Australia.

This is not necessarily about aged care! It is about fairness and transparency of reimbursement of GST payments. Any improvement we can make with our GST reimbursement will assist essential services in our State, such as health care.

Aged care providers bring important adjunct services and strengths to the health care system. However underpaid and undervalued we may be by our health and hospital counterparts, one blip in aged care funding could contribute mightily to a creaking collapse of the health care system as we know it. To hesitate to support our State in ways that can improve all our outcomes is folly.

Nice chatting!

3 Replies to “How fair is the Western Australian GST share?”

  1. It is remarkable that the politicians keep arguing about this on air and in the pages of the press with the overwhelming comment of “there is nothing we can do without the agreement of the states”.

    As I understood it, the Prime Minister and Finance Minister have discretionary power here?

    1. Hi Richard
      I grew up being told where there is a will, there is a way. This whole matter really should not be as difficult as we witness happening.
      Cheers

  2. Sadly I don’t see it changing until the election result is determined by a state that wants to see this logical change happen. Could be sooner than we think though with the way the current political situation in Canberra is going…….

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