Within System Gives Western Australia Fairer GST Payments

Within System Gives Western Australia Fairer GST Payments

Western Australia Premier Mark McGowan

Western Australia Treasurer Ben Wyatt

State Debt Targeted Following Successful GST Campaign

Victor P Taffa

  • GST reform package successfully passes through the Senate
  • Western Australia’s GST ‘top-up’ payments will solely be used to reduce Western Australia’s debt burden
  • An estimated $1.7 Billion in ‘top-up’ payments between 2019-20 and 2021-22 to be dedicated to a Debt Reduction Account
  • Account forecast to save about $200 Million in interest payments alone in the first 3 years

McGowan Government has welcomed the successful conclusion of the GST debate and announced its plan to utilise the additional funding expected to flow to Western Australia.

“This is a historic day for Western Australia, we have finally secured our fair share of the GST.” Premier Mark McGowan said.

“It has been a long and difficult campaign, but today every Western Australian can take comfort in knowing that our State is no longer taken for granted by Canberra.”

Western Australia’s fair share of the GST campaign was in the making for years and the beginning of the current process started when Premier Mark McGowan wrote to the then Prime Minister in April 2017, requesting the Productivity Commission conduct an inquiry into the flawed system.

Western Australia is now guaranteed to receive a ‘top-up’ to an effective 70 % floor over the 3 years from 2019-20 to 2021-22. The Federal Government currently estimates this to be worth $1.7 Billion.

McGowan Government will direct the first 3 years of the ‘top-up’ payments into the State’s Debt Reduction Account. This will be included in the 2018-19 Mid-year Review.

It will save hundreds of millions of dollars in interest payments over the long term, with Treasury currently forecasting about $200 Million in savings over just the next 3 years.

“Today is a great day for Western Australia. Today, we end decades of political squabbling and point scoring with action that puts the State’s finances back on a path to sustainability.” Treasurer Ben Wyatt said.

“McGowan Government has always said it will manage the finances in a mature, responsible fashion, and utilising this additional GST revenue will be no different.”

With the passage of the legislation in the Senate today, the new GST system will be introduced over 8 years. In addition to the initial untied ‘top-up’ payments for Western Australia, a transition to the new equalisation formula will see all States and Territories equalised to the strongest State out of New South Wales and Victoria.

WA Treasurer Ben Wyatt








GST Within System

A ‘within-system’ 70 % floor will also be locked into place from 2022-23, and rise to 75 % from 2024-25. This will prevent any State or Territory from falling below this mark.

New equalisation formula (and associated GST pool ‘top?ups’) is estimated to deliver an additional $3 Billion in revenue to Western Australia over 6 years from 2021-22. This revenue will form part of the typical annual GST grants.

Over the last 12 years, Western Australia has provided $30 Billion of our GST money to other States and Territories. In 2015-16, Western Australia’s GST fell as low as 30 % with our current share at 47 % under the existing GST formula.



GST                 Goods and Services Tax