Bonus GST a shot in arm

More money headed for health

TASMANIA’s $1.4bn GST windfall will help fund improved health services and push the state budget back towards surplus, Deputy Premier Jeremy Rockliff says.

November’s 2020/21 budget forecast showed Tasmania would receive $2.2bn in GST this financial year — the federal budget has revealed the figure will be $2.7bn instead — a $581m single-year improvement.

There are $322m, $268m and $250m improvements over the original forecasts in the following years: for a total of increase $1.4bn. It is an increase of between three and nine per cent in the state’s revenue in each of the next four financial years.

That is $846m more than predicted as late as mid-April in the pre-election budget update, when Treasury forecast a $475m boost to the original budget estimates across the four years of the budget forward estimates.

Mr Rockliff (pictured) said the federal budget was good news for the state.

“Across the board it is good for Tasmania — $846m of additional GST revenue, of course, is very welcome, and will be invested wisely,” he said.

“That will assist us in terms of our financial management, the deficit, and of course, will ensure that additional funding is targeted where it’s needed, such as health.”

Tasmania receives about 4 per cent of the total $75.1bn national pool of GST funds — with 2.1 per cent of the national population.

The formula used to share the kitty means that receives the equivalent GST share for an “adjusted population” of 1.065m people, despite having only 543,000 residents.

In the coming financial year, Tasmanians will get $1.96 back for every dollar the state contributes.

It is the highest figure for any state, although the Northern Territory receives $4.79. NSW, by comparison receives 96c and Western Australia just 41c.

The state’s share of specific purpose payments from the federal government also increase strongly across the forward estimates: money for health and education; housing and homelessness and local government increase are also predicted to rise steadily over the period from $1.5bn in 2020/21 to $1.9bn in 2023/24, an average of 8 per cent per year.