Wilkie refuses to back GST carve-up

DRAFT laws to revamp how the GST is distributed between states and territories have passed their first hurdle in federal Parliament.

But Denison independent Andrew Wilkie voted against the Bill, which he labelled “bad public policy”.

The changes include a GST floor of 75c, the GST pool to be boosted with federal money, and for the new standard of distribution for the tax revenue to be the fiscal capacity of the stronger of NSW or Victoria.

“When it comes to the GST we want to ensure the services across the country are at a certain standard,” Treasurer Josh Frydenberg told the Lower House yesterday as the legislation passed.

Mr Frydenberg said the changes were needed after the mining boom saw Western Australia’s share of the GST drop to about 30c in the dollar.

“We’ve provided a national solution to a national chal- lenge,” he said. WA Labor MP Patrick Gorman said the changes had been a long time coming, having counted close to 80 editorials on the topic in the West Australian newspapers over six years.

“Too often West Australian’s feel like they are the forgotten state of the Commonwealth,” he said.

The changes easily passed Parliament with Labor’s support but Mr Wilkie criticised the Bill during debate.

“It’s actually quite shameful that this reform has been pushed in its form by the Government and Opposition,” he said.

Guarantees that the states would be better off were not being locked into law for longer than eight years, he added.

“It reeks of a political fix to get it beyond the election and a bit beyond that,” he said.

“There is no guarantee of Tasmania’s GST allocation growing as gross national GST receipts increase, in other words as the pie gets bigger. And there is no guarantee that special purpose payments won’t be cut.”

During the transition period between 2021-22 and 2026-27, states and territories will get the better of the old or the new system over the period. In 2026 the Productivity Commission will review the system.