Productivity Commission into GST – Price welcomes an ally in the fight against Horizontal Fiscal Equalisation
June 30, 2017
Member for Durack Melissa Price spoke in Parliament last week on Western Australia’s GST allocation, following news the New South Wales Government is also calling for a change to the model.
“The Western Australian Federal Liberals have been talking about this since I got elected in 2013; arguing that the GST model is broken and is essentially a race to the bottom” Ms Price said.
“The model rewards an economy for poor economic management. For not developing its natural resources. If you can wilfully drive up public spending, drive up deficits, and drive away investment, the grants commission will reward you with greater GST revenue.
“The argument used by the grants commission is that the financially weaker states need more federal revenue to deliver their government services, and that the states with the higher revenue take a cut to fund these programs.
“This process is called Horizontal Fiscal Equalisation, and it is done on economic data about 4 -5 years old.
“The reality on the ground is very simple: in my electorate of Durack, and the neighbouring electorate of O’Connor, we have some of the most disadvantaged communities in Australia.
“We desperately need to increase our GST share to ensure recovery from the resources downturn and to deliver services to our remote towns and communities and it is fantastic to see NSW lending its voice to a call for a per capita model.
“It is a shame WA Labor Federal members aren't as supportive to the plight of our State" Ms Price said
Productivity Commission submissions close at the end of this month. Submissions can be made at: http://www.pc.gov.au/inquiries/current/horizontal-fiscal-equalisation