WA's GST Deal: Surplus, Not Deficit

0:00A West Australian resident claimed their state pays more in goods and services tax contributions than the rest of Australia combined, and needs extra. Funds to fix hospitals, schools, and housing, but every part of that is off base. West Australia is forecasting a $2.4 billion budget surplus this year, after running surpluses for seven straight years. The goods and services tax started in 2000 as a shared revenue stream for states and territories. Western Australia's share plummeted in the 2010s, even during its local recession, dropping to less than $0.30 per dollar raised there. To calm tensions, then Treasurer Scott Morrison introduced a deal in the 2019-20 budget, Guaranteeing Western Australia at least $0.75 per dollar, or matching new South Wales and Victoria's shares. That arrangement was meant to cost federal taxpayers $2.3 billion, initially, assuming falling iron ore prices key to Western. Australia's economy, instead prices stayed high, forcing extra federal cash into the pool so

1:03no state loses out. Projections now show the total cost hitting nearly $60 billion by 2009-30. Other states are pushing back hard. Tasmania's Treasurer, a former Morrison government member, calls for scrapping the deal due to budget strain. New South Wales and Victoria, both in deficit, complain about opaque allocation rules from the Commonwealth Grants Commission, like a $200 million hit to New South Wales over a coastal city's boundaries. A Productivity Commission review later this year could reshape the federation's funding mess, but with both major parties eyeing Western Australia. Seats, big changes seem unlikely for now. Stay informed with Sydney News today, AI-powered updates.