Fight to maintain WA’s justifiable share of the GST ramps up as evaluate begins

• The Commonwealth Treasurer has launched the
  Terms of Reference for the Productivity Commission’s evaluate into the 2018 GST distribution
  reforms
• WA Labor
  Government will struggle to make sure the legislated 2018 reforms are retained
• Existing 2018
  reforms are vital to each WA and the nationwide financial curiosity
• Submissions to the Productivity Commission
  evaluate are due by 27 February 2026, with PC to launch its interim report by 28
  August 2026 and ultimate report by the tip of 2026

The
beginning gun has fired on the Productivity Commission evaluate (PC evaluate) into
the 2018 GST distribution reforms with the discharge of the Terms of Reference by
the Commonwealth Treasurer at the moment.

The Western Australian
Government has established a GST “fairness fighter” workforce throughout the Department
of Treasury to guide the State’s response to the PC evaluate, with the workforce being
led by former Under Treasurer Michael Barnes.

WA will search to make sure that
the legislated 2018 reforms to the GST system are usually not unwound, whereas
enhancements are made to the underlying methodology to higher assist
growth of mineral and power assets and increase nationwide productiveness.

In 2018, following a marketing campaign by the WA Labor Government, in
partnership with WA trade leaders, the Productivity Commission undertook a
evaluate of the GST redistribution, after Western Australia’s share of the GST
fell to document lows.

The PC Review discovered the system of GST redistribution had
important weaknesses, together with discouraging insurance policies that assist mineral
and power growth, and really useful that the system be revised within the
pursuits of nationwide productiveness and wellbeing.

In response to the PC’s
findings, the then Commonwealth Government legislated reforms, together with guaranteeing
that no State receives lower than 75 pr cent of its inhabitants share of GST. The laws additionally required that the PC evaluate whether or not
the reforms are working successfully and as supposed, in addition to their fiscal
implications by the tip of 2026.

The 2018 GST reforms have
been vital to making sure a good GST share for WA. Without the reforms, WA
would obtain simply 18 per cent of its inhabitants share in 2025‑26 or round $6
billion in much less income per yr. As such, any unwinding of the reforms poses a
very severe menace to WA’s monetary sustainability.

Without the reforms, WA wouldn’t have the ability to put money into the financial infrastructure
that helps the most important useful resource tasks that generate billions of {dollars} in
export earnings for your entire nation, with WA accounting for nearly half of
the nation’s exports. Cutting WA’s GST share would additionally cut back funding for key
providers reminiscent of well being and schooling.

Even with the 2018 reforms, WA continues to subsidise different States and
Territories with round $2.5 billion every year of Western Australia’s GST
redistributed to the east coast. This is on high of billions of {dollars} that
movement to the Commonwealth and different States and Territories by way of greater
firm tax and different revenues, with WA delivering the very best contribution per
capita within the nation.

Submissions to the Productivity
Commission evaluate are due by 27 February 2026. The PC will then ship its
interim report by 28 August 2026 with a ultimate report by the
finish of 2026, earlier than a call by the Commonwealth.

Comments attributed to Acting Premier and Treasurer Rita Saffioti:

“Our authorities is
unwavering in its dedication to sustaining a justifiable share of GST for Western
Australia. We might be preventing extraordinarily exhausting all through this Productivity
Commission evaluate interval to make sure that the 2018 GST reforms stay intact.

“Without the 2018
reforms, WA could be left with a grossly insufficient and unsustainable share of
GST, undermining our capability to put money into the vital financial infrastructure and
supporting providers required to make sure the persevering with prosperity of our State
and the nation.

“We know that the
Albanese Government is acutely conscious and has supported sustaining the 2018
reforms, however we additionally know there are lots of on the east coast advocating for the
reforms to be eliminated. We cannot enable these vital voices to form the
debate.

“This debate cannot simply
be about how the GST pie is split amongst the States and Territories. It should
even be about rising the pie, by encouraging financial growth and
productivity-enhancing reforms. The 2018 GST reforms obtain this stability and
have to be preserved.

“We are investing extra
assets to make sure WA’s voice is powerful in our submissions to the Productivity
Commission evaluate and associated representations, making a transparent case for
retaining these vital reforms.”