GST split leaves all states poorer except Western Australia, says NSW treasurer
NSW Treasurer Daniel Mookhey warned that the 2018 GST arrangement is pushing living standards down across Australia, benefiting only Western Australia.
NSW Treasurer Daniel Mookhey told the Productivity Commission that the 2018 GST allocation, designed to protect Western Australia, now creates a $6 billion yearly subsidy for that state while forcing the rest of the country to reduce services. He warned that this imbalance will erode living standards nationwide and jeopardise the development of about $2 trillion in critical mineral projects in NSW, which require major infrastructure investment.
The Productivity Commission’s interim report described the 2018 deal as a mistake, prompting public hearings this week. Although the arrangement was introduced by the Morrison government, the Albanese government has pledged to keep it despite the findings. Western Australian Premier Roger Cook dismissed the Commission’s criticism, while senior Treasury official Michael Brennan, now heading the e61 think-tank, said the GST formula should be merged with other federal grants into a $200 billion indexed pot. Mookhey and other critics argue a per-capita GST model, with extra support for poorer states, would be fairer.
Why it matters
The GST split could widen economic inequality between Australian states and hinder national mineral development.
How the sides frame it
LOW AGREEMENTLeft-leaning coverage emphasizes the GST split as a harmful subsidy that will erode living standards and threaten critical projects in other states, while right-leaning coverage portrays the arrangement as a privileged, "perverse" deal that unfairly benefits Western Australia at taxpayers' expense.
LEFT
Frames the GST split as a damaging subsidy that makes all other states poorer and threatens living standards and mineral project development.
RIGHT
Frames the GST split as a privileged, "perverse" carve-up that unfairly lines Western Australia’s pockets and defies logic.
The left emphasises
- creates a $6 billion yearly subsidy for WA while forcing the rest of the country to reduce services
- will erode living standards nationwide
- jeopardises the development of about $2 trillion in critical mineral projects in NSW
The right emphasises
- the "perverse" carve-up was costing federal taxpayers $6 billion a year to line WA's pockets
- WA's advantageous GST deal defies logic
- WA premier called the report's authors "east coast clowns"
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