Queensland, Victoria, Tasmania and South Australia make clear their opposition to PM’s promise to ensure WA gets more GST back from Canberra

This article is more than 4 years old

This article is more than 4 years old

Queensland and Tasmania have lined up to condemn Malcolm Turnbull’s pledge to lift Western Australia’s share of GST revenue.

Queensland’s premier, Annastacia Palaszczuk, said the plan, announced by the prime minister at the WA state Liberal conference on Saturday, was “absolutely discriminatory”.

Palaszczuk accused the prime minister of making “policy on the run” and said she expected the issue to dominate discussion at the next Council of Australian Governments meeting.

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“Once again, [he wants] to give a handout to Western Australia which I think is absolutely discriminatory,” she told reporters in Brisbane.

In Tasmania, federal Labor frontbencher Helen Polley said on Monday that the “alarm bells are ringing loud and clear down here in Tasmania”.



The senator criticised what she called another “thought-bubble”, warning it would have a devastating impact on Tasmanians and South Australians.



“Yet again Mr Turnbull goes to WA, espouses a change in the GST - coincidentally they’re heading to a state election and on the other side of the country down here he’ll say something completely different,” she said.



Finance Minister Mathias Cormann has said a gradual phase-in means other states would not be disadvantaged.

Victoria’s treasurer Tim Pallas said Victoria would be short-changed if Western Australia got a bigger slice of the GST.

“Victorians will once again be collateral damage as Malcolm Turnbull short changes our state, and cravenly pursues votes at the WA election,” Pallas said.

Tasmania’s Liberal premier, Will Hodgman, said there has always been ongoing threat that larger mainland states will swallow up Tasmania’s GST share, and he would fight for his state’s entitlements.

“Our position has been consistent - we don’t support any changes to the GST, full stop,” Hodgman said.

“Tasmanians can be confident that just like we stood up for Tasmania previously and defeated proposed changes to the GST distribution method, GST rate, and the state income tax proposal, we will fight and defeat this latest proposal too.”

Western Australia has long complained it gets ripped off by the east coast on the nation’s GST share.

The prime minister received loud cheers at the conference on Saturday when he told party members that West Australians were right to feel aggrieved over their paltry share.

Then he committed to changing the arrangements to ensure there was a minimum percentage floor to the GST it got back from Canberra each year.

WA’s GST share has sharply dropped to an unusually low 30-odd cents back for every dollar it generates in recent years because of lags in the complicated formula based on how well it was doing during the mining boom.

WA government coffers were unfairly hit hard as it simultaneously lost mining royalties as the boom ended and commonwealth GST revenue while the other five states got back at least 100 cents in the dollar.

“The huge gap between what Western Australians pay in GST and what they receive back is unprecedented and Western Australians have every right to feel aggrieved,” Turnbull said.

“We believe that we should take that opportunity – as the WA share of the GST increases under the current system – to change the arrangements so that we set a percentage floor below which no state’s receipts of GST can fall below.”

WA’s premier, Colin Barnett, welcomed the news and said he hoped the percentage floor for the state would end up at about 75 cents for every dollar raised.

He said it was a significant commitment by the PM that would enable WA’s budget – forecast to have a $3.9bn deficit this year – to return to surplus and enable confidence in planning future public works and other expenditure.

“This is the strongest commitment any Australian prime minister has made to correcting this unfair aspect of sharing revenues across Australia,” Barnett said.

The former prime minister Tony Abbott argued the system couldn’t be changed without the agreement of the other states but Turnbull appears to have agreed with Barnett that Treasury can unilaterally change it.

“No other state has ever been treated like WA has over recent years ... we should never suffer that again nor should any other state,” Barnett said.

On Sunday the finance minister, Mathias Cormann, wouldn’t nominate where the floor would be set but did note there had been discussion at Coag meetings about a base of at least 50%.

The 30-cent level was “completely inappropriate and unsustainable”, Cormann told Sky News.

“We are going into this conversation with an open mind but we do believe there needs to be a floor, that the gap between the share of GST that is going back to Western Australia and the share that is going to other states is too large, it’s inappropriately large,” Cormann said.

The federal government’s plan would mean that as WA’s share of the GST increases over the next few years – as dropping iron ore prices reduce the royalties it collects – the floor price would gradually be introduced to make sure no state’s GST can drop too low again.

Cormann said the gradual phase in meant no other state would be disadvantaged because they wouldn’t lose compared with the projected GST shares over that time.