The Turnbull government is signalling the states will not be worse off when the Coalition responds to a long-anticipated review of goods and services tax distributions later this week.



Malcolm Turnbull told reporters on Monday the government’s response would “ensure that all states are treated fairly and that no state is worse off”.

“Our commitment is to have, a GST system that is fair, that it passes the pub test in Burnie and Bunbury, in Bundaberg and Bathurst – everywhere – and Bendigo, right across the country,” he said.

Speaking separately in Perth, the attorney general, Christian Porter, repeated Turnbull’s line about the states not being worse off under the looming proposal, and said West Australian parliamentarians, including himself, had been lobbying “to make sure that WA is in a better situation than the moment”.

“We’re working to ensure that we’re going to improve WA considerably,” Porter said. “That’s all I’ll say on that.”

Last October, the Productivity Commission recommended in a draft report a radical overhaul of the GST distribution that would see Australia’s eastern states losing billions of dollars in GST revenue and Western Australia gaining a multibillion-dollar windfall.

Having been asked by the government to consider the current system of distributions – an inquiry prompted largely by ongoing complaints from the west that the status quo disadvantages it – the Productivity Commission suggested the government could improve Western Australia’s share of the GST by adopting methods of distribution that would increase its GST take by either $3.2bn or $3.6bn, at the expense of every other state and territory.

Under the proposed overhaul, New South Wales would lose either $1.2bn or $110m in GST in 2017, depending on the method, and Queensland would lose $729m or $1.6bn.

Victoria would lose $920m or $972m, followed by South Australia (-$256m or -$557m), Tasmania (-$77m or -$168m), the ACT (-$60m or -$130m) and the Northern Territory (-$36m or -$79m).

Western Australia would be the only state to gain under the proposal, which delivers it more than $1,200 per person.

The final report went to the government in mid-May. The response has been discussed by cabinet in recent weeks and is expected to be made this week.

Given the overhaul would have significant political repercussions – and with the Coalition currently contesting byelections in several states – the government has been signalling that the response will include a package to ensure the states and territories don’t go backwards as a consequence of any shift.