Productivity Commission calls WA GST arrangement a costly error, urges repeal
The Productivity Commission’s interim review labels the Western Australia GST uplift as a “costly mistake” and recommends scrapping the deal, warning the fiscal gap will keep widening.
The Productivity Commission released an interim assessment of the Western Australia GST uplift, describing it as a “costly mistake” that should be terminated. The 2018 deal, introduced by former treasurer Scott Morrison, guarantees WA a higher share of GST revenue than the national formula would provide, costing the federal budget $23 billion in its first six years, with $22 billion flowing to WA. The commission warns the disparity will grow and exacerbate fiscal inequality among states.
While Prime Minister Anthony Albanese pledged to wait for the final December report before commenting, treasurers from New South Wales, Queensland, South Australia and Victoria hailed the review as confirmation that the current carve-up is unfair. The report outlines two less-preferred alternatives if the deal is not fully removed, including a direct payment system that would avoid penalising other states. Deputy chair Alex Robson emphasized restoring the original purpose of horizontal fiscal equalisation to ensure comparable public services nationwide.
Why it matters
The review could reshape how GST revenue is shared, affecting budgets and services across all Australian states.
How the sides frame it
HIGH AGREEMENTBoth left-leaning and centrist coverage describe the WA GST arrangement as a costly mistake, highlight its fiscal unfairness, and call for its repeal, with no substantive differences.
LEFT
Frames the GST deal as a multi-billion-dollar error that should be undone because it distorts equity among states.
CENTER
Frames the GST uplift as a costly mistake that must be terminated, stressing its contribution to fiscal inequality.
The left emphasises
- calls the 2018 GST agreement a “costly mistake”
- notes $23 billion diverted to WA and $60 billion projected by 2029-30
- argues the deal has achieved little and distorts equity across states
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