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All better off from fairer way to share the GST

The Federal Government is delivering on its promise to fix problems in the system used to share the revenue from the GST leaving all states and territories better off.

This will be the first time real changes have been made to fix problems in how the GST is shared since the GST was introduced almost 20 years ago.

“This problem has been kicked down the road for too long and it is time we now got on and fixed it,” Melissa Price Federal Member for Durack said.

“Western Australians know that the system was not working, and that volatility was undermining the ‘fair go’ objective of sharing GST between the states and ensuring all Australians access essential services.

“We have developed a plan that is a real, long-term solution, rather than a political quick fix.” Ms Price said.

The proposal will involve transitioning to a new HFE system over eight years from 2019-20 in a way that is fair, reasonable and sustainable, and that will ensure all State or Territories are left financially better off.

To assist with the transition to the new system, the Commonwealth would provide short-term funding over the three years from 2019-20 to 2021-22 to ensure that no State receives less than 70 cents per person per dollar of GST. WA is expected to be the only State with a relativity below 0.70 during this time.

“Importantly, this funding would be untied, meaning WA would be able to spend it as they see fit to deliver services including schools, hospitals and infrastructure. This is a fair way of ensuring WA gets the services it needs.” Ms Price said.

The Federal Government will now consult with states and territories to ensure the transition works.

“Western Australians should be congratulated for persisting with the case for reform. I am proud to be part of a Government that has a plan to make the system fair and deliver more funding for essential services for all Australians.” Ms Price said.

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