6 May 2015

A positive first step in achieving GST fairness for Western Australia

Peter Katsambanis, Member for North Metropolitan Region, welcomed today’s announcement by Prime Minister Tony Abbott and Federal Finance Minister Senator Mathias Cormann that Western Australia will receive partial compensation for our state’s unfair share of GST.

“It is refreshing to see the Federal Government finally acknowledging that the current GST distribution formula is broken and discriminates against Western Australia,” Mr Katsambanis said.

“The partial compensation of $499 million is welcome as a symbolic gesture, but of course it does not make up the multi-billion dollar shortfall that WA endures every year under the existing unfair arrangements. 

“As I highlighted in my submission to the National Commission of Audit as far back as November 2013, Western Australia will miss out on more than $20 billion over four years to 2016/17 under the current flawed and inequitable formula.

“The previous Federal Labor Government completely ignored Western Australia’s plight and in fact made the problem worse by imposing anti-WA taxes like the carbon tax and the mining tax which drove investment away from our state.

“Now that the Federal Liberal Government has accepted that the system is broken, it is well past time that the discredited Commonwealth Grants Commission formula for distribution of GST was consigned to the dustbin of history.

“The only fair solution is to move to a population-based formula as soon as possible with a set percentage of GST revenue being distributed to each state. The balance over and above any set population-based percentage should be allocated drive further microeconomic reforms that will stimulate economic growth and increase prosperity across every state and territory in Australia,” Mr Katsambanis added.

Mr Katsambanis also welcomed the announcement that part of the $499 million package will help fund two major infrastructure projects in the North Metropolitan Region – the extension of the Mitchell Freeway and the duplication of the Reid Highway.

“This demonstrates that the State and Federal governments can work together to deliver these much-needed road projects that will cut travel times, reduce congestion  and improve the quality of life for residents in Perth’s northern suburbs.

“Today’s announcement and spirit of cooperation is a positive first step in achieving meaningful, long term GST reform that will benefit Western Australia and will help strengthen the Australian federation,” Mr Katsambanis concluded.