CCIWA will deliver a strong case for keeping Western Australia’s GST deal, when it appears before a Productivity Commission hearing on Friday morning.
It comes after the Productivity Commission released its controversial interim report on the GST, recommending up to $6 billion a year be ripped from WA’s economy under proposed GST reforms.
CCIWA will argue that the report, released last month, is flawed, diverging significantly from previous positions held by the Commission.
CCIWA Chief Economist, Dr Daniel Kiely, said it also ignored the broader economic and productivity context of the current GST deal.
“WA contributes more to the national economy per person than any other state but receives the lowest GST distribution on a per capita basis, even with the 2018 deal that provided WA with a safety net,” Dr Kiely said.
“Before that safety net was introduced, WA was getting back as little as 30 cents from every dollar of GST collected.
“The Productivity Commission is advocating for a return to a system that it said itself was broken back in 2018.”
Despite assurances from the Prime Minister that the GST deal will not change, Dr Kiely said WA cannot afford to be complacent.
“It’s extremely important that we continue to highlight the flaws in the Productivity Commission’s interim report,” he said.
“A return to a pre-2018 GST system would blow a hole in WA’s finances, impacting funding for roads, hospitals schools and the services we rely on every day.
“It would also act as a deterrent for investment in emerging industries like critical minerals, at a time when Australia is competing with the rest of the world for capital.”
CCIWA has identified improvements that could be made to the current GST system, including changes to the definitions applied to remote areas of Australia, and the exclusion of East Coast pokies revenue from the GST carve-up.
“It should be noted that while WA’s mining revenue is included in the calculations, pokies revenue from other states is not,” Dr Kiely said.
“This is a clear double standard and an obvious flaw that should be addressed by the Productivity Commission in its final report.”
CCIWA’s petition calling for the GST deal to be kept has been signed by more than 20,000 Western Australians.
