Federal Budget bonanza for WA

Metronet, roads, dams and hospitals will be winners in this year’s federal budget with $3.2 billion worth of announcements made on a whirlwind visit to Perth by Prime Minister Malcolm Turnbull on Friday.

It includes the Federal Government announcement on Thursday of a GST top-up for WA – in the form of $189m for hospitals – taking the state’s share from 47 cents in the dollar to 50 cents.

Finance Minister Mathias Cormann, who will headline the Chamber of Commerce and Industry WA’s Budget Breakfast, on May 14 will simplify the budget and explain the benefits for WA business.

The Liberal National Government has added about $1.4 billion in additional GST top ups in the last four years.

However, CCIWA has urged the Federal Government to commit to holistic GST reform in the national interest, not short-term top-ups.

Chief Economist Rick Newnham said CCI expected a solution once the Productivity Commission report on the GST was released on May 15.

“West Australians do not consider top-ups to 50 cents in the dollar to be a ‘fair share’ …

band-aid’s will no longer cut it,” Newnham said.

“To date, no political party has come close to solving this issue. The Prime Minister must commit to GST reform which is in the interest of every Australian – continued growth in the national economy depends on it.”

Meanwhile, Federal Treasurer Scott Morrison says the government remains committed to a sustainable fix of the GST distribution issue.

“The volatility of these distributions is what causes so many problems…we’ll keep working methodically through it,” the Treasurer told radio station 6PR last week.

There’s been speculation that the Federal Budget is also expected to contain a range of income tax cuts but Morrison says that is not informed speculation and he won’t reveal details until May 8.

Last November, the government said it would be working to deliver tax relief for lower and middle income-earning Australians.

Last week the Federal Government revealed that it will scrap plans for an increased Medicare Levy for workers earning more than $21,000, which had been planned to help fund the National Disability Insurance Scheme (NDIS).

Morrison says that improved economic conditions meant that the NDIS was now fully funded, without the need for the levy.

“What’s changed is that more people have got into jobs and are not drawing down on the welfare payments … the economy’s strengthening and that’s showing up in the increased revenues we’re picking up,” Morrison said last week.

“We’re doing it without having to charge Australians more through the tax system,” he said.

Morrison maintains that the NDIS is guaranteed to be fully funded by the Liberal National government, regardless of potentially fluctuating future economic conditions.

“We also believe you need to keep taxes under control … what you end up doing is taxes choke the economy,” Morrison said.

“Taxes never keep up with Labor’s spending because they can’t live within their means.”

Find out how WA business fared in this year’s Federal Budget with Finance Minister Mathias Cormann. 

You may also be interested in

Consultation on $15b National Reconstruction Fund
Consultation on $15b National Reconstruction Fund
Businesses have been encouraged to provide feedback on the Federal Government’s proposed new $15 billion National Reconstruction Fund after legislation was introduced to Parliament last...
Read more »
Household confidence dives amid soaring costs
Household confidence dives amid soaring costs
The confidence of WA households for the coming year has tumbled to its weakest position in six years, according to CCIWA’s final Consumer Confidence Survey...
Read more »
Confidence for 2023 dives as households endure soaring costs 
Confidence for 2023 dives as households endure soaring costs 
CCIWA Chief Economist Aaron Morey The confidence of WA households for the coming year has tumbled to its weakest position in six years, worse than...
Read more »