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Posted by: Charles Jan 10 2018, 03:09 PM
Labor split over need for GST reform as South Australian, Tasmanian elections loom

Sarah Martin, Federal Political Editor
Wednesday, 10 January 2018 4:30AM

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Labor has split over the need for GST reform, with the WA Government calling for “swift action” from Prime Minister Malcolm Turnbull as the Federal Opposition ramps up its campaign against change.

Sparking a brawl between the States ahead of the South Australian and Tasmanian elections, acting Opposition Leader Tanya Plibersek said the delay to the Productivity Commission’s GST review proved the Federal Government was planning cuts in other States.

“That’s because every State and Territory bar WA will lose, and lose big time, under the proposals in the draft report,” Ms Plibersek said yesterday.

“Malcolm Turnbull has a secret plan to take money away from every other State and Territory and give it to Western Australia.”

WA Acting Premier Roger Cook said it was “disappointing” the GST issue was being “dragged through at least two election campaigns”.

“WA expects swift action from the Federal Government,” he said. “Western Australians won’t cop this issue being ignored any longer.

“So far we haven’t seen a solution from the Federal Government. Action is required, not unnecessary delays for political purposes.”

SA Premier Jay Weatherill, who faces voters on March 17, hit out at WA’s GST grievances, saying there were no problems with the horizontal fiscal equalisation system and called on the Federal Government to “abandon this reform”.

This year, SA will receive a $1.44 GST relativity payment and Tasmania will receive $1.80 compared with 34¢ in the dollar for WA.

Mr Weatherill said the Productivity Commission had acknowledged the GST system had served the country well, despite WA’s share falling to just 30¢ in the dollar.

“We don’t support the analysis that somehow there’s a problem with the system,” Mr Weatherill said.

“Poor old WA got themselves into trouble and somehow we should remedy that?

Well, it’s not an adequate or intellectually rigorous chain of reason.”

Labor’s decision to stoke the campaign over the GST carve-up comes after Federal Treasurer Scott Morrison announced last week that the Government had extended the Productivity Commission’s deadline to May 15, after the two State elections and a week after the Federal Budget.

Rather than rejigging the GST formula, the Federal Opposition has committed to a $1.6 billion infrastructure top-up fund that would lift WA’s share to an equivalent of 70¢ in the GST dollar. Liberal MP Ben Morton said there was now “no doubt” that Labor did not support changing the distribution of the GST.

“It will be galling for all West Australians to see Tanya Plibersek this week running around the country boasting about how Labor would dud WA out of this solution if they were elected,” he said.

Labor MP for Fremantle Josh Wilson said, “no one can argue that 34¢ is fair or reasonable”.

He criticised the “paralysis” from the Government on the reform process.

What hypocrisy from SA's Premier, Jay Weatherhill. His state gets over 4 times the return that WA receives yet he has the gall to say, “Poor old WA got themselves into trouble and somehow we should remedy that?" Has he ever stopped to think that WA's problems would never have occurred had they received even 50% of the GST they raised.

As far as I'm concerned, SA is a parasite feeding off WA's largesse.

Posted by: Bill Jan 10 2018, 03:41 PM
There is a good reason why WA doesn't get as great a % share of the GST as do SA and Tasmania..

If memory serves me correctly, when the Minerals Resource Rent Tax (the dreaded Mining Tax), was being legislated, WA decided to massively lift their mining royalties to circumvent any money flowing to Canberra.

GST takes into account the State's ability to raise revenue and the Mining States have a distinct advantage over states like SA and Tasmania.

I believe...that Labor reduced the amount that WA received from the GST because they had the ability to raise their own revenue, as they demonstrated by raising the Mining Royalties and thereby reducing the mining company profits.

In effect, it meant that tax that would have normally be expected to flow to Canberra went to WA instead. Wayne Swan, affectionately known as the Goose, was not impressed.,

Six years of Coalition governments in Canberra have failed to change the decision made by the Labor Treasurer, Wayne Swan.

Not really Labor's problem. Any changes to GST distribution falls directly at the feet of Slomo Morrison, the Liberal Treasurer, and Mathias Cormann, the WA Senator who is Finance Minister in the Turnbull Government.. .

Curly will fix it up after the next election.

Posted by: Charles Jan 10 2018, 03:53 PM
"Curly will fix it up after the next election."

Not if Tanya Plibersek has her way!

Your summation contains some accuracies Bill, but you fail to mention that the mining boom came to a grinding halt and the Mining Royalties shrank alarmingly. Neither political party addressed the inequity that arose from this.

Posted by: Alicia Jan 10 2018, 04:20 PM
No need to worry about WA, they are only there to make the map look balanced and to provide money to be lavished on the eastern states by eastern states politicians in the never endin quest to secure votes for federal pollies in the East. A pox on them and their houses , I say. Yes, we in the West are fed up with being taken for granted by those non- performing States with their hands out for more gravy. There is no incentive for the mendicant states to get off their collective bums and go out and create the environment in which more jobs and production will be generated. . Rant for the day,

Posted by: lee Jan 10 2018, 04:43 PM

GST takes into account the State's ability to raise revenue and the Mining States have a distinct advantage over states like SA and Tasmania.

You mean like taxes on the gambling industry over east? The big pokie barns?

Posted by: Michael.W Jan 11 2018, 01:13 PM
The problem with all Australian Taxation is that, all Governments fail to administer, budget and control spending to a required functional level. Its just plan greed all the way and the big issue that all tax payers face, the moment something looks lucrative they want more as greedy fat cats trying to control it like there monies other people are stealing. It will never change under the current drop kicks we have in all forms of Government.

The other issue is pollies use tax payer monies to buy votes for them to stay in power. Its a corruption method that hasn't been address and whilst they are all on the perks they all get it will never change until someone has the balls to stop it.

Posted by: lee Jan 11 2018, 02:59 PM
GST takes into account the State's ability to raise revenue and the Mining States have a distinct advantage over states like SA and Tasmania.

On thinking further -

The GST does NOT take into account the states ability to raise revenue.

It is the Commonwealth Grants Commission.

The GST was to be returned to the states where it was raised minus a "housekeeping" fee taken by the ATO.

"In accordance with the Intergovernmental Agreement, the Australian Government administers the GST on behalf of the States and all GST revenue is paid to the States. This provides the States with a robust, secure and growing source of revenue to spend according to their own budget priorities. In 2007-08, GST revenue will be $43.1 billion — an increase of $2.4 billion (5.8 per cent) from 2006-07. "

So it is administering on BEHALF of the states NOT on behalf of the Commonwealth who can dispense as they wish.. That would seem to denote that WA would have to agree to any funding being taken from them via the Grants Commission.

Posted by: scepo Jan 14 2018, 06:23 AM
I may be wrong but I don't think so.

I was of the understanding that the government of the day (federal) has nothing to do with the "carve up" of the GST, it is determined independently so whether the Goose was impressed or not, he had nothing to do cutting WA's share just as Morrison and Cormann have no control over it at present.

Having said that, I do believe that the whole thing is due for an overhaul.

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