Oct 10, 2017

GST carve-up mess makes a diabolical political challenge even tougher

The government is in terrible trouble in Queensland and Western Australia. So you'll never guess who would be one of the biggest losers from a reallocation of the GST to the west ...

Bernard Keane — Politics editor

Bernard Keane

Politics editor

The Productivity Commission's examination of the the means for divvying up GST revenue, and the underlying principle of "horizontal fiscal equalisation", was always going to be a delaying mechanism for the government, and not a solution for what, from the Coalition's point of view, is a Gordian fiscal knot.

The West Australians have been jacking up for years about how their mining royalties have meant they get less GST than the other states under the arcane funding calculations employed by the Commonwealth Grants Commission. They have a point, even if they oddly didn't complain too much when the same calculations delivered them additional funding before the mining boom. The other states, though, think the West Australians can get stuffed. Especially the small mendicant states like Tasmania and South Australia, which lack the economic and demographic size to provide services with the same efficiency as bigger states.

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