Madeleine King, the Federal Resources Minister, has provided assurances to the residents of Western Australia that there will be no alterations to the state’s GST agreement. Her comments came in response to a contentious report released by the Productivity Commission, which suggested a reduction in Western Australia’s GST allocation.
Western Australia’s Premier, Roger Cook, echoed these assurances, stating that he had received similar commitments from Prime Minister Anthony Albanese. Minister King characterized the interim report as “unbalanced, highly speculative, and clearly incorrect,” reaffirming the Labor government’s dedication to supporting the resource-abundant state.
During her remarks, she emphasized, “I want to make it clear to all Western Australians that the Albanese Labor government has your back.” This statement was made during the launch of Labor’s campaign for the competitive Secret Harbour seat, located south of Perth. She added, “We will always ensure that Western Australia receives its fair share of GST and support its aspirations to be the resources capital of Australia.”
The controversial report, released last Friday, proposed that the government eliminate the changes made in 2018 regarding the distribution of the goods and services tax among states. It argued that Western Australia was the sole beneficiary of these changes and labeled them a “costly mistake.”
Prime Minister Albanese, whose administration has supported and extended the current GST deal until at least 2029, remarked that Western Australia would receive “its fair share” of GST. However, he indicated that specific comments would be deferred until the final report is available in December.
Minister King reiterated that the Prime Minister assured Mr. Cook that the existing GST arrangements would not be altered. She criticized the report for failing to recognize the significant contributions that Western Australia and its resources sector make to the national economy.
At the same event in Secret Harbour, Premier Cook reiterated that he had received the Prime Minister’s confirmation that the GST agreement would remain unchanged. “He knows that Western Australia is the engine room of the national economy,” Cook stated, highlighting the importance of the state’s economic success.
The GST agreement, originally established by former Treasurer Scott Morrison, guarantees that Western Australia receives a greater portion of GST revenues than it would under the national distribution formula, which is designed to provide more funding to states with greater financial needs. This formula has been a point of contention, particularly for Western Australia, which has prospered from multiple mining booms, leading to low GST relativities due to its perceived wealth.
Premier Cook’s administration has argued that any changes to GST distribution would unfairly penalize Western Australia for its economic achievements. State Treasurer Rita Saffioti has described calls from other states for a revision of the GST distribution as “pure envy,” while independent economist Saul Eslake has suggested that the funds allocated to Western Australia could be utilized more effectively elsewhere.
