Western Australia Party | WA First Party

The GST system rewards states for population growth and gambling. These are big social issues facing Australia.

If Dick Smith was truly concerned about a sustainable population of Australia, he would tackle the GST system head on. So far he hasn’t.

The GST system divides up the cash based on some criteria:

A state must grow its population or it gets less GST (NSW, VIC).
A state promoting gambling and receiving gambling taxes gets more GST (NT, NSW, VIC, QLD).
A state can lock up its resources and get more GST (VIC, NT)
A state can use GST for consolidated revenue and will still get more GST (NSW, VIC, QLD, TAS,)
A state with falling population numbers will get less GST (WA)
A state which digs up its minerals and farms every bit of arable land will get less GST (WA)
A state which restricts gambling will get less GST (WA)

This GST system can change with a stroke of a pen by the Federal Treasurer, Scott Morrison from NSW. It does NOT need the states to agree!

GST Colin Barnett the Federal Treasurer makes the decision 3

Peter Kennedy, Barnett back to beat the GST drum, Business News WA, 9 February 2018

So why doesn’t the federal treasurer reward Western Australia for it’s economic and social contribution to Australia with more GST? Is he scared of losing political power from the states with the biggest populations and gambling problems?

Western Australia must use its political power to elect candidates who fearlessly represent the rights of our state to share in Commonwealth revenue. Andrew Wilkie has done this for Tasmania, and Nick Xenophon has done it for South Australia.

It’s our turn to elect fearless candidates to both state and federal parliaments.

Other States have claimed that Western Australia has historically benefitted from the distribution of Commonwealth grants – principally GST grants and its predecessors (financial assistance grants, tax reimbursement grants and special grants paid in recognition of State disadvantages).

However, for most of the 20th century Western Australia’s export orientated economy was heavily disadvantaged by Commonwealth tariffs which were set up to protect the manufacturing industries of the Eastern States.

The extra funding received by Western Australia in this period was effectively compensation for Commonwealth tariff policies, and indeed the Commonwealth Grants Commission (which recommends the distribution of GST grants among States) was set up in the 1930s partly in response to concerns about Western Australia’s disadvantages from federation, including tariffs.

Since sustained tariff reform began in 1988-89, Western Australia has been a net contributor to other States through the distribution of GST grants and their predecessors. The following table shows the subsidies received by Western Australia (i.e. funding additional to Western Australia’s population share of GST grants and its predecessors), both in nominal terms and present value terms (adjusted to 2017-18 dollars for the time value of money).
Nominal + Present Value
$b $b
1988-89 +0.2 +1.4
1989-90 +0.2 +1.2
1990-91 +0.3 +1.2
1991-92 +0.3 +1.1
1992-93 +0.3 +0.9
1993-94 +0.2 +0.6
1994-95 +0.1 +0.4
1995-96 +0.1 +0.2
1996-97 -0.0 -0.0
1997-98 -0.0 -0.1
1998-99 -0.0 -0.1
1999-00 -0.1 -0.3
2000-01 -0.1 -0.2
2001-02 -0.2 -0.3
2002-03 -0.2 -0.3
2003-04 -0.1 -0.3
2004-05 +0.1 +0.2
2005-06 +0.1 +0.1
2006-07 -0.0 -0.0
2007-08 -0.3 -0.5
2008-09 -0.7 -0.9
2009-10 -1.0 -1.3
2010-11 -1.5 -1.9
2011-12 -1.4 -1.7
2012-13 -2.2 -2.6
2013-14 -3.0 -3.3
2014-15 -3.6 -3.9
2015-16 -4.3 -4.5
2016-17 -4.3 -4.4
2017-18 -4.4 -4.4
Total -25.7 -24.0

Furthermore, the subsidy that Western Australia now provides through HFE is just one part of Western Australia’s contribution to the Federation. More broadly, Commonwealth revenues derived from Western Australia (such as GST and company tax) exceed the Commonwealth spending on Western Australia (such as GST grants and welfare payments). Based on analysis by the Western Australian Department of Treasury, using latest available data, Western Australia’s net contribution was around $21.7 billion in 2015-16 (details are reported in Appendix 11 of Western Australia’s 2017 18 Budget Paper No. 3). Western Australia is estimated to have provided a net contribution to the Commonwealth since 1986-87.

The above issues were discussed in Western Australia’s first submission to the current Productivity Commission HFE Inquiry, which can be found here (see pages 12 15):
http://www.treasury.wa.gov.au/uploadedFiles/_Treasury/Publications/Western-Australias-Submission-to-the-Productivity-Commissions-Inquiry.pdf

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