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Now is the time to fix the GST in the national interest

Fixing the GST distribution has never been more important to the national economy than it is today.

Today, Federal Treasurer Scott Morrison will receive the independent Productivity Commission’s final report investigating how the GST distribution impacts the national economy, leaving him with 25 sitting days to release it to the public.

Chamber of Commerce and Industry WA (CCI) Chief Economist Rick Newnham said the Productivity Commission concluded in its draft report that the current GST arrangements hold back the national economy and has backed CCI’s proposal to fix the GST – the only organisation to have this support.

“The reason is simple – it is in the national interest,” Mr Newnham said.

“This isn’t about ‘poor WA’. We are just the unfortunate State that has copped the brunt of a broken GST system that has not been updated since it was introduced almost two decades ago.

“The Productivity Commission has made it clear that without a change to the GST formula the national economy will suffer, holding back business investment and job creation for decades to come.

“The Federal Treasurer has admitted this and said that short-term payments to states that suffer are no longer enough, so now is the time to act – the future of the national economy depends on it.”

There is enormous sympathy in Australia for WA’s poor GST share. No other state has ever had its GST share fall below 83 cents, while WA’s fell all the way to 30 cents.

“Long-term 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,” Mr Newnham said.

“Every state should be expected to stand on its own two feet but no state can be left to fall behind, and that is exactly what a change to the GST carve up will ensure.

“CCI will continue to work closely with the Federal and State Government to fix the GST once and for all.”

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