Together, West Australians have won a David and Goliath battle to fix the GST. We have achieved what was widely regarded as justified but impossible, making history for WA.
Today, the Federal Government’s GST reform package – a GST floor rising to 75 cents, additional funding in the GST pool and changing the broken GST formula – passed the Senate with bipartisan support, leaving no state worse off.
Once implemented, WA will no longer be punished for growing its own economy or developing its natural resources. WA will keep every additional dollar of iron ore royalties it raises instead of 90 per cent being siphoned to other states, creating far stronger incentives for development.
Since the GST was introduced, more than $36 billion has been ripped from WA’s GST share and handed to other states – the equivalent of 24 Optus Stadiums. From today, WA will never have to come back to Canberra, cap in hand, begging for its GST back.
To put this GST fix simply, the Prime Minister is taking all the states out to lunch, he's giving them all a bigger piece of pie, and for once WA doesn't have to pick up the bill.
WA now has a once in a lifetime opportunity that must not be wasted. To maximise the benefit of this GST fix, the additional $4.7 billion of GST coming back to the State over the next eight years must be used to pay down debt. Any other use would simply pass the State Government’s debt, and the billions of dollars of interest payments that go with it, onto another generation.
Fixing the GST was only possible because the Chamber of Commerce and Industry WA (CCI) was able to demonstrate how every Australian would benefit – convincing the independent Productivity Commission that a fix was in the national interest.
CCI was the only organisation, including any state government, to have its proposal backed by the Productivity Commission. Our proposal was held up as first-class as it ensured every state could do more to get ahead but no state would be left behind. The WA State Government also adopted CCI’s proposal of equalising to the average as its preferred option.
GST reform will go down in CCI’s history as one of our most significant achievements for our members. We shifted the debate away from the ‘poor WA’ argument, which was never going to convince a nation, to one that demonstrated how every Australian stood to benefit from fixing the GST.
We commend Prime Minister Scott Morrison for having the initiative to set up the Productivity Commission inquiry and seeing the GST reform package through the Parliament, which will benefit every Australian. We commend the Leader of the Opposition Bill Shorten for giving bi-partisan support to this national interest solution.
We thank the contribution of CCI members, and in particular the business leaders who supported our campaign for reform – Andrew Forrest, John Poynton, Michael Chaney and Nigel Satterley, as well as Premier Mark McGowan for working hand in hand with CCI.