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Category: Tax / Government and Politics / State Parliament / Business, Economics and Finance

Queensland 'could lose $720m a year' if WA gets its GST wish

Wednesday, 17 Aug 2016 05:07:20

Mr Pitt says Queensland could lose up to $750m in changes to the CST carve up. (AAP: Dan Peled)

The Queensland Government is warning the state will lose hundreds of millions of dollars if the Commonwealth boosts GST revenue to Western Australia.

Prime Minister Malcolm Turnbull has flagged changes to the GST sharing formula to set a minimum on distributions to the states and territories.

No detail has been provided on what a floor might be set at, although there is speculation about a potential floor of either a 50 per cent or 75 per cent of a population share of GST.

Western Australia is complaining its GST return has dropped to 30 cents of every tax dollar it raises and wants that lifted to 75 cents.

Treasurer Curtis Pitt said state Treasury modelling showed that would be a significant blow to Queensland.

If a 50 per cent floor had been implemented this financial year, WA's GST distribution would have been increased by about $1.3 billion, and reduced Queensland's by about $317 million, Mr Pitt said.

A 75 per cent floor would increase WA's distribution by about $2.9 billion, reducing Queensland's by about $720 million.

Mr Pitt said Western Australia had already been gifted half a billion dollars for roads after it complained about its GST allocation earlier this year.

"Now we've seen the Prime Minister again doing what appears to be a political sweetheart deal," Mr Pitt said.

"I really am astounded to see again Malcolm Turnbull making tax policy on the run after previously floating a GST rise and extra state-based income taxes before dropping them both in very quick order.

"GST revenue belongs to the states and territories and as such any changes should have their agreement.

"Trying to fiddle with the GST system to save the WA Liberal Government is no way to run a country."

AustraliaPlus


 

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