Western Australia’s Premier Roger Cook and Treasurer Rita Saffioti are currently in Canberra to engage in critical discussions with Prime Minister Anthony Albanese regarding the state’s Goods and Services Tax (GST) deal. This high-stakes meeting will address long-standing issues. It seeks to guarantee Western Australia’s equitable share of GST revenue — a hot-button issue ever since the deal was brokered in 2018.
It has been the WA government’s position that the 2018 WA GST deal is sacred. Without it, the state will face dire fiscal consequences. WA Treasurer Saffioti spoke of this agreement being critical for WA’s economic wellbeing and as an economic lifeline for the whole Australian economy. She noted the collaborative spirit of the GST agreement reached in 2018. Without it, we could not deliver on the promise of economic development or execute an infrastructure improvement by constructing the roads, ports and other facilities that provide access to energy and water that new developments need.
The Importance of the GST Deal
This GST deal, put in place when we enjoyed a rare period of fiscal harmony between states, has been vitally important for WA. The state now adds $2.5 billion to the GST pool that funds the other Australian states. This contribution is meant to call attention to WA’s fiscal importance to the national economy as it continues to struggle with its own budgetary desires.
The WA government has launched an advertising campaign titled “WA’s GST is working for Australia,” which seeks to clarify the benefits of the current GST deal to residents in eastern states. The campaign includes advertisements in major newspapers, billboards in Canberra, radio spots, and online promotions, all aimed at educating the public about the implications of potential changes to the GST structure.
Saffioti’s justification for this outreach investment speaks volumes. She added, “We think it’s a good investment of up to $1 million to help eastern staters understand because we’re trying to save $6.5 billion being ripped away from Western Australia. This campaign shows the state’s fierce resolve to protect its fiscal interests. It is the first step in taking on egregious eastern state attempts to undermine the share of GST that flows to Western Australia.
Federal Support and Ongoing Challenges
Prime Minister Anthony Albanese has been publicly supportive of the existing GST arrangement. During his successful election campaign he made the now-infamous promise on WA’s GST arrangements that “no change” would occur. He even got a bit symbolic in writing and signing “No Change To WA GST” on the arm of a reporter. Even in the face of this commitment, frustration still lingers as the four eastern states have allegedly been continuing efforts to reduce WA’s share.
Saffioti noted that the Feds are on WA’s side, which is a nice change of pace. Unshaken, she highlighted a genuine concern that eastern states placings as they attempt to amend the lively type basin.… Anthony Albanese and the Federal Government are standing up for WA and the status quo GST deal. As we’ve seen, east coast states are still trying to undermine the GST floor and further reduce WA’s GST share.
This is the kind of action the WA government must continue to pursue to bolster its position. It has created a “GST Fairness Fighter” task force within the Department of Treasury. This team will lead the state’s response to the ongoing review initiated by Federal Treasurer Jim Chalmers, who released terms of reference for an Australian Productivity Commission review into GST reforms in September.
The Broader Economic Implications
The WA government is right to assert that a fair share of the GST is necessary for its economic sustainability. Further, they argue, it is essential to powering national economic growth. Saffioti underlined that “that GST deal is critical to WA’s economic development and national economic development.” WA’s significant investment in public infrastructure, funded by record GST revenue, sets the stage beautifully. Infrastructure projects funded under this program help improve the lives of all Australians.
Saffioti’s overarching message remains clear: “So we have a job to inform people that a good GST deal for WA is good for the nation.” As negotiations continue in Canberra those tapes aren’t the only item at play so far—far from it. Western Australia’s ongoing dogfight to get its fair share of GST revenue reminds us of the state’s importance in Australia’s economic future.
