Madeline King, the Federal Resources Minister, has assured residents of Western Australia that there will be no alterations to the current Goods and Services Tax (GST) agreement. Her statements followed a controversial interim report from the Productivity Commission that suggested reducing the state’s GST allocation.
WA Premier Roger Cook has also confirmed that Prime Minister Anthony Albanese provided similar reassurances regarding the GST deal. Minister King criticized the Productivity Commission’s report as “unbalanced, highly speculative, and clearly incorrect,” emphasizing the Labor government’s commitment to backing the resource-abundant state.
During her address, which coincided with the Labor Party’s campaign launch for the competitive Secret Harbour seat located south of Perth, King stated, “I want to make it clear to all Western Australians that the Albanese Labor government has your back. We will always ensure Western Australia gets its fair share of the GST and support the state’s aspirations to be the resources capital.”
The contentious report, released on Friday, proposed that the government eliminate the 2018 amendments concerning GST distribution, arguing that Western Australia was the sole beneficiary of these changes and labeling them a “costly mistake.”
Prime Minister Albanese, whose administration has agreed to maintain the GST deal until at least 2029, has indicated that Western Australia will receive its fair share of GST but suggested that further comments would be deferred until the final report is available in December.
Minister King reiterated that Albanese assured Cook that there would be no modification to the existing GST arrangements. She pointed out that the report overlooks the substantial contributions made by Western Australia and its resources sector to the national economy.
At the same event in Secret Harbour, Premier Cook reiterated his confidence in the Prime Minister’s commitment to preserving the GST agreement, stating, “He knows that Western Australia is the engine room of the national economy. That’s why he’s backing our team, our state, and our position regarding the GST.”
The arrangement initially negotiated by former Treasurer Scott Morrison guarantees that Western Australia receives a larger share of GST revenue than what would be allocated under the national formula, which aims to provide more funds to states with higher needs and lower financial capabilities.
This formula has always sparked debate, particularly in Western Australia, where successive mining booms have positioned the state as the wealthiest in the country, leading to low GST relativity due to its perceived high financial standing.
The government of WA argues that any changes to the GST distribution would unjustly penalize the state for its achievements, with State Treasurer Rita Saffioti noting that calls from other states for a redistribution stem from “pure envy.” Independent economist Saul Eslake has also suggested that funds used to supplement WA could be allocated more effectively elsewhere.
