Turnbull announces changes to the GST

Nic Crowther
Mon 15 Aug

The Prime Minister has set the cat among the pigeons by launching a sweetener into the Western Australian election campaign that focusses on their favourite subject: the GST.

For the last two or three years (well, since the end of the mining boom that paved Perth’s pavements with gold) WA Premier, Colin Barnett, has been screaming about the fact that his state receives somewhere in the vicinity of 25 cents for every dollar it puts forward to the Federal coffers through the GST.


Western Australian Premier, Colin Barnett

 

To fix this, the PM is proposing a ‘floor’ that would prevent returns from dropping below a set number. Turnbull floated something around 65 cents, while Barnett is hedging towards a position around 10 cents higher.

 

 

This wasn’t such an issue when times were good. Fast-forward to today - three months out from a state election -  and Barnett is pushing hard to save his political skin. Now it seems that no less than the Prime Minister himself is shoring up the Premier’s position. The simple reason may be that it’s all designed to protect the PM from a Liberal government falling almost immediately after his narrow re-election.

 

 

Still, the repercussions could be severe. Almost every state and territory jurisdiction is lining up to condemn the proposal. Even the most supportive are asking for consultation before any changes are made, while the most damning accuse the Prime Minister of policy-on-the-run.

 


Tasmanian Premier, Will Hodgeman

 

You can bet that Tasmanians have suffered a couple of sleepless nights wondering what the impact of any change to GST arrangements would have for them. The southern state is the greatest beneficiary of the tax (much to the chagrin of WA and NSW) and will be digging in to protect their highly-subsidised position.

 


ACT Chief Minister, Andrew Barr

 

Both the Northern Territory and the ACT are in de-facto election mode, but that won’t bother Turnbull much (and Barnett less). The collateral damage inflicted by these discussions will be minimal given the expected return of the LNP in the NT and Labor in Canberra.