Gillard Caves Into Victoria G.S.T. Needs

Gillard Caves Into Victoria G.S.T. Needs

Victoria Treasurer Kim Wells

Commonwealth Must Reverse Unjustified $2.5 Billion Cut To Victoria’s GST

Victor P Taffa

Today Prime Minister Julia Gillard has conceded the merits of the Victorian Government’s argument in relation to GST distribution.

Given this concession, the Commonwealth should immediately suspend the unjustified $2.5 Billion cut to Victoria’s GST revenue recommended by the Commonwealth Grants Commission (CGC) 2011 Update, until the outcome of the review is completed.

It is clear that the Commonwealth has no confidence in the existing formula.

Therefore it defies logic that Prime Minister Gillard would proceed with the $500 Million cut in Victoria’s revenue each year while the flawed formula itself is being reviewed.

We welcome the acknowledgement by the Commonwealth Government that the current distribution of GST revenue is unpredictable and undermines the incentive for long term economic reform.