Australia
The West Australian demands clear definition of fair GST share
An editorial in The West Australian has called on the Prime Minister to define a fair share of GST distribution.
The West Australian has called on the Prime Minister to define what constitutes a "fair share" of the Goods and Services Tax (GST) for the nation's states. According to an editorial published by the Perth-based masthead, there is a pressing need for direct clarity from the federal government on how GST revenues should be distributed across various jurisdictions.
The distribution of the GST has long been a point of friction between Western Australia and the eastern states. Under an agreement brokered in 2018, Western Australia was granted a guaranteed minimum return, known as the GST floor, to ensure the state did not receive less than 70 cents for every dollar of GST raised within its borders. This legislated floor is scheduled to rise to 75 cents in the dollar.
Other state leaders, particularly in the eastern states, have frequently criticised the arrangement. They argue that the Western Australian deal unfairly disadvantages their own budgets, especially as Western Australia continues to benefit from strong mining royalties. Prime Minister Anthony Albanese and the federal Labor government have previously committed to maintaining the Western Australian GST deal, but pressure remains constant from various state treasurers seeking changes to the national tax pool.
The editorial's specific call highlights the ongoing tension over the definition of fairness in commonwealth state funding. The federal government has not yet provided a formal response to this latest demand for clarification, and it is not yet confirmed whether any review of the formula is being actively considered by the federal Treasury.
Watch to see how the federal government responds to the growing calls for tax reform ahead of the next national cabinet meeting.
This report draws on original reporting by The West Australian.
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