A federal minister from WA has questioned how the Productivity Commission reached its recommendation to overhaul the state’s costly GST deal, despite the prime minister vowing to leave it in place.
The commission found the “perverse” deal struck in 2018 by the Morrison government had cost federal taxpayers $23 billion in top-up payments to WA since it was struck, and said in a report it needed to be scrapped.
The federal budget forecasts the deal will cost $6.6 billion in 2026/27 and $60 billion in total by the end of the decade.
But Prime Minister Anthony Albanese said the deal was not going anywhere, arguing the resource-rich state needed its fair share of GST.
The report had revitalised calls from other jurisdictions for the GST deal to be changed, as Mr Albanese prepares to meet with state and territory leaders on Wednesday at national cabinet.
Resources Minister Madeleine King, who is from WA, welcomed the prime minister’s decision to keep the GST deal in place.
However, she cast doubt over how the Productivity Commission came to its conclusions.
“There’s no kind of halfway house in that report. It was all about winding back the arrangements that the Productivity Commission itself had recommended in 2018 to the government of the day,” she told ABC Radio on Tuesday.
“I don’t actually quite agree that it has gone through it as methodically as it might have. When you look through the report, you’ll notice there’s zero reference to suggestions made by the WA government.
“This is the government representing the population that will be the most widely affected by any changes.”
Ms King said other states have benefited from the GST besides WA.
“States have all benefited because the iron ore royalties that Western Australia has earned for the country have been distributed, for the most part, like 90 per cent all around the country,” she said.
“That’s a good thing for the country. We want that industry to keep going and to keep going well, and it is good to have Western Australia incentivised to do so.”
While premiers and chief ministers outside of WA said the GST needed to be changed, opposition frontbencher Dan Tehan said his home state of Victoria was also better off under the deal.
“Victoria, like Western Australia uses its own natural resources, grows its economy, and makes sure that it is as productive as it possibly can be,” he told ABC Radio.
“What we’ve seen in Victoria is it’s locked down all its natural resources and hasn’t been able to develop the state like it was in the past.”
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