The conservative Liberal senator Eric Abetz has attacked Malcolm Turnbull’s suggestion that the GST formula ought to be changed to placate Western Australia.

Abetz issued a joint statement on Monday with his fellow Tasmanian Liberal senators – David Bushby, Stephen Parry, and Jonathon Duniam – saying they are opposed to “any changes” to the GST distribution formula that would disadvantage Tasmania.

Their statement will undermine Turnbull’s authority, given that the prime minister used his keynote speech to the WA Liberal party state conference at the weekend to say he would like to change the way the GST formula allocates funding for Australia’s states and territories.

Turnbull had said the “huge gap” between what Western Australians pay in goods and services tax and what they receive back is “unprecedented” at the moment, and he would like to set a percentage floor below which no state’s GST receipts can fall in the future.



His comments received loud cheers from the audience, with the WA state election just seven months away.

The WA Liberal premier, Colin Barnett, is recontesting the election, but this year his government delivered a forecast deficit of $3.9bn – the worst deficit in the state’s history.

Barnett has repeatedly blamed the GST allocation for his record budget deficit, and he told the state conference he was thrilled with Turnbull’s pledge because it would help to restore his government’s finances.

“The reason we have the large deficit had been the GST issue, so you can understand how delighted I was with Malcolm Turnbull’s commitment last night,” Barnett said on Sunday.

He said he hoped the percentage floor for the state would end up at about 75 cents for every dollar raised rather than the current 30-odd cents.

But state and territory leaders reacted angrily to Turnbull’s suggestion that the GST formula ought to be changed.

Queensland’s Labor premier, Annastacia Palaszczuk, said the plan was “absolutely discriminatory” and she accused the prime minister of making “policy on the run”.

And Victoria’s Labor treasurer, Tim Pallas, said Victoria would be shortchanged if Western Australia got a bigger slice of the GST.

Tasmania’s Liberal premier, Will Hodgman, said there had always been a threat that larger mainland states would 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.”



Now Abetz says the Tasmanian Liberal Senate team is “united in [its] support of premier Will Hodgman’s position”.

“The current formula was agreed in the intergovernmental agreement and changes to it under that agreement require the unanimous agreement of all states and territories, as well as the commonwealth,” the joint statement says.

“Tasmania’s Liberal senators commend the state Liberal government for making it absolutely clear that Tasmania’s agreement to a change will not be forthcoming on the most recent proposal.

“Last year, the Commonwealth Grants Commission, in providing independent advice on the distribution of GST, recommended against changing the current distribution formula to assist Western Australia.

“It is difficult to comprehend what, if anything, has changed. The present GST relativity formula has [been] proven to work well and should not be altered to advantage one state’s particular budgetary concerns over another.”



The Labor leader, Bill Shorten, said on Monday that he couldn’t take Turnbull’s idea seriously unless more detail was provided.



“Tell you what we’ll do about the GST – one, we’ll never increase it, unlike Mr Turnbull, and two – if he’s got a serious proposal to change the allocation, let’s see his detail,” Shorten said.

“I’m just not going to entertain Mr Turnbull’s thought bubbles, which are purely going by state politics in WA. Australia is getting fed up with Mr Turnbull’s all-talk, no-action approach to government.”

The treasurer, Scott Morrison, cautioned on Monday that WA’s complaint about the current GST allocation couldn’t be addressed for years, despite Turnbull saying on Western Australians had “every right to feel aggrieved” about it.



He said voters should understand that Turnbull was not promising to fix the GST allocation immediately. “It is down the track,” he told 2GB radio. “We shouldn’t get ahead of ourselves.”