A plan by the WA Government to reform distribution of the GST would add more than $10 billion to the state’s troubled budget bottom line, Premier Mark McGowan has said.
The idea, to share revenue on a per-capita basis, is one of a suite of proposals being put forward to reform what WA has long argued is an unfair system.
The proposals are part of WA’s submission to the Productivity Commission’s review of the GST and they come a day before Treasurer Scott Morrison is due in Perth to spruik how the federal budget is benefiting Western Australians.
But front and centre during his visit will be the GST, and a widespread belief — including from both major parties — that the current system is broken and WA’s 34.4-cent return for every dollar raised is woeful.
Mr McGowan warned any delays to GST reform would cost the Liberals a swathe of federal seats in WA.
“My message to Mr Morrison is the GST is the biggest issue in Western Australia and the people of WA spoke at the state election saying they want change,” the Premier told the ABC.
“This is the opportunity for him to create change.
“If he wants to squib it, then the Liberal Party will go down big time in Western Australia.”
The Productivity Commission is reviewing the GST’s horizontal fiscal equalisation system, which distributes funds to ensure states and territories can deliver the same standard of services.
Mr McGowan said the preferred option in the Government’s submission was for GST revenue to be allocated according to the population size of each state.
Five Liberal seats in jeopardy
Earlier this week, Mr Morrison appeared to hose down expectations of any major change, signalling the inquiry may find the current system is not having a negative impact on productivity, efficiency and economic growth nationally.
But that will be little solace to federal Liberal MPs, including Cabinet Minister Christian Porter, who would be certain to lose their seats if current polling was replicated at the next federal election.
Election analyst William Bowe said this week’s Newspoll, which gave a two-party preferred federal result of 53 per cent to Labor to 47 per cent to the Coalition in WA, was consistent with other recent polls.
“That points to a swing over over 7 per cent, which would be enough to cost the Liberals five seats,” Mr Bowe said, noting they were all metropolitan electorates where Labor had won scores of seats at the March state election.
As well as Mr Porter’s electorate of Pearce, Aged Care Minister Ken Wyatt’s seat of Hasluck and Steve Iron’s seat of Swan are also in jeopardy.
Justice Minister Michael Keenan in Stirling and Andrew Hastie in Canning could also be in trouble.
In Pearce, at a shopping centre in the suburb of Bullsbrook, sentiment ran strong that WA was being ripped off on the GST.
Bullsbrook resident Dean Dixon says WA deserves a bigger share of GST revenue. (ABC News: Eliza Borrello)
“We need to bring more of it back to WA, like I say I work on the mines so I pay a lot of tax and even I don’t get to see it back,” local resident Dean Dixon said.
“So you drive around on our roads and our infrastructure, yeah we definitely need to bring some back here.”
Retiree Paddy May agreed.
“Well I think the biggest problem at the moment is this carve-up of the GST, we don’t get a fair share of that for the amount of mining … that goes on up in our state and I think that’s always been a big problem. I think they need to look at it better,” Mr May said.
‘Difficult environment’: Christian Porter
But Mr Porter said in the four years since he had entered Federal Parliament, he and other WA Liberals had clawed back about $3.4 billion worth of GST for WA.
“We’re all working in what is a very difficult environment to get as fair a share as we possibly can, and, as I say, we’ve had very significant success so far,” he said.
“This isn’t about individual seats, it’s about a state getting a fairer share.”
Retiree Paddy May says WA does not get enough GST revenue in return for what it provides. (ABC News: Eliza Borrello)
The WA Liberal Party is running full-page newspaper advertisements and commercial radio spots to promote the Commonwealth’s investment in shipbuilding and jobs in WA, reminding voters it has not forgotten the state.
But WA Treasurer Ben Wyatt said Mr Morrison should carefully heed the voters’ message on the GST.
“The Federal Treasurer, will probably, if he speaks to a few Western Australians, get a very clear understanding that the current return of GST to Western Australia is no longer acceptable and governments, regardless of their stripe, will be punished accordingly if there isn’t a better return,” Mr Wyatt said.
In August last year, Prime Minister Malcolm Turnbull promised a floor on the share of GST each state could receive, to avoid any repeat of the “unprecedented” collapse in WA’s GST revenue.
But during the state election campaign, he said any change would have to wait a few years until WA’s share under the current formula climbed back up to a “more normal level”.