Call for Turnbull to fix GST crisis

CCI has urged the Federal Government to commit to real GST reform, not short-term top-ups.

The call comes on the back of a $188.9 million health package announced by Prime Minister Malcolm Turnbull last month for infrastructure projects, including expanding the Joondalup Health Campus and the Osborne Park Hospital.

CCI Chief Economist Rick Newnham says that while the spend is welcome, it’s a short-term fix for a bigger problem which is the stalling of the national economy due to the GST crisis.

“Structural reform, as recommended by the Productivity Commission, is the only way to ensure all Australians get a fair go when it comes to GST distribution,” Newnham said.

“Reform will incentivise states and territories to develop their own industries and grow the national economy. We should no longer accept that some state governments can sit back and let other states do the heavy lifting for them while they reap the benefits through the GST distribution.

“Every state should be expected to stand on its own two feet, and that is exactly what a change to the GST carve up will ensure.”

Newnham said West Australians did not consider top-ups to 50 cents in the dollar to be a ‘fair share’ of the GST revenue.

“The only right thing to do now is to fix the GST distribution once and for all,” he said.

“CCI has welcomed the Federal Government’s top-up payments over the past four years, with this latest cash injection taking the Government’s support to $1.4 billion. But bandaids will no longer cut it,” Newnham said.

“To date, no political party has come close to solving this issue.”

Newnham said the CCI was waiting for the Productivity Commission to release its final report into the issue on May 15.

The full breakdown of the $188.9 million is:

·   $158 million towards the Joondalup Health Campus expansion, which will include 90 new public beds, 75 mental health beds, a stroke unit, three cardiac catheter laboratories, a 25-bed coronary care unit, an urgent care clinic, an ambulatory care centre and a Medi Hotel facility

·   $10.6 million towards the Osborne Park Hospital Expansion, to include a neo-natal facility upgrade and additional rehabilitation beds and

·   $20.3 million for the refurbishment of Royal Perth Hospital, including the mental health observation unit and Medi Hotel.

►Find out how WA business fared in this year’s Federal Budget with Finance Minister Mathias Cormann. Get your tickets to CCI’s Federal Budget Breakfast here.

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