WA premier furious about $348m black hole

Posted on 04/25/2020

A $348m budget hole due to a cut in GST funds is a “slap in the face”, WA Premier Mark McGowan says.Premier Mark McGowan says he is furious at finding out that WA will be stripped of $348 million in GST when it already receives the nation’s lowest share in the funding pie.
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It is the second time in six months that the state has been stripped of funding because of write-downs by the Commonwealth based on population growth forecasts.

Mr McGowan said he would raise the issue with Prime Minister Malcolm Turnbull and Labor opposition leader Bill Shorten when he goes to Canberra this week for the Council of n Governments meeting.

Population forecasts are a key factor along with mining revenue in the Commonwealth Grants Commission’s complicated annual carve-up of the GST.

It is designed to ensure equalisation among the states and territories in terms of services and infrastructure.

The latest downgrade followed a 60,000 drop in ABS population estimates leading to a $1.9 billion drop in GST share that was revealed six months ago.

“I am going to raise this with Prime Minister Turnbull and say enough is enough, another cut to Western on top of everything else is not right,” Mr McGowan told reporters.

“The fact that we budget, they budget and then they arbitrarily change the figures based upon some spurious ground just upsets me and upsets West ns.

“It is so infuriating … it means further pressure on your local school, local hospital and local police station.”

The Labor state government has promised to return to surplus in 2020.

WA currently receives just 34 cents for every dollar of GST it raises while the rest of the states and territories receives close to $1 or well above. Tasmania received $1.81 this year.

Unfortunately for Mr McGowan, a Productivity Commission report into GST reform that was supposed to be completed last month is not due to be handed to federal Treasurer Scott Morrison until May.

Neither Mr Turnbull nor Mr Shorten has committed to change, which is opposed by most states.

Liberal shadow treasurer Dean Nalder said unless there was bipartisan support from both federal Liberal and Labor to change the GST system, it would not be made fairer for WA.

“There (are) more seats to be lost on the east coast than there are to be gained in Western ,” he told reporters.