The Commonwealth Grants Commission’s recommendation on Western Australia’s GST share for the coming financial year shows the current GST model is working as
intended.
WA will receive $9.3 billion in GST revenue in 2026/27, which equates to 82 cents in the dollar. It’s the first time WA’s share has risen above 75 cents in the dollar since the floor
was introduced in 2018.
Despite this, WA still receives a GST share of 9.1%, with 11.1% of the national population.
CCIWA’s Chief Economist, Dr Daniel Kiely, said the current deal is working, with the relativity floor providing budget certainty to all states.
“This shows the deal that gave WA a guaranteed floor for what it receives from the national GST pool is working as intended,” he said.
“Without this deal, WA would be $6.6 billion dollars worse off next financial year. That impacts our ability to deliver our services and grow the economy, with WA businesses contributing substantial amounts to the national budget, which benefits all Australians.”
The Commonwealth Grants Commission pointed out that all states are estimated to receive an increased GST distribution in 2026–27, however, falling iron ore prices would impact WA’s budget position in the future.
Dr Kiely said the current GST deal protected all states from the impacts of economic volatility.
“All states can experience boom and bust. It might be Victoria today, it could be WA tomorrow,” he said.
“The floor keeps the system fair for all states and territories and gives Governments certainty to plan their budgets.”
CCIWA’s submission to the Productivity Commission makes a strong case for the current deal to be maintained and recommends some minor changes to the GST formula to improve fairness.
