Jim Chalmers says the opposition is ‘confident that our view will prevail as it has prevailed in the past’

This article is more than 1 year old

This article is more than 1 year old

Labor is confident the government will be forced to legislate a guarantee no state or territory will be worse off under new GST carve-up arrangements.

The opposition’s finance spokesman, Jim Chalmers, said his party would lobby crossbench senators to support tacking on a guarantee to legislation putting a 75c floor in payments to states.

“If Scott Morrison is fair dinkum about this commitment that states won’t be worse off, he should be prepared to legislate it,” Chalmers told the ABC on Sunday.

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But he said it was premature to believe the entire proposal could fall over if Labor played hardball on enshrining the guarantee in law.

“We are confident that our view will prevail as it has prevailed in the past,” Chalmers said.

The treasurer, Josh Frydenberg, is continuing to reject the need for a legislated guarantee, saying such a move would create parallel systems.

“They’re wanting us to run an old set of books based on the current system and a new set of books which is based on a new system with the floor,” he told Sky News.

He accused Labor of playing politics on the GST, insisting all states and territories will be better off with the federal government injecting an extra $1bn a year into the funding pool.

Legislation for the GST changes, including a 75c floor in payments is expected to be introduced when parliament resumes in mid-October.

The plan was hatched to protect Western Australia’s share, which crashed to less than 30c in the dollar after the mining boom.

Chalmers said states were nervous the prime minister, Scott Morrison, would cut funding if there was no safeguards in new laws.

“We’ve been saying for some time now that WA has got the rough end of the pineapple when it comes to the GST distribution in the last few years,” Chalmers said. “We’ve said that fixing that challenge or addressing that challenge shouldn’t come at the expense of smashing the budgets of the other states.”