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The federal government will provide an additional $ 9 billion to governments over the next decade to ensure that no one loses a new GST formula and no state will ever receive less than 75 ¢ dollar. [19659002SometimestheAutomatedAutomationwillbeapprostbestmaybeautomotiveWesternAustralia
By 2026-2027, when the new formula and other changes came into effect, WA would have received $ 4.5 billion out of the $ 6.6 million. dollars.
By 2028-2029, the Commonwealth will have disbursed $ 9 billion in total.
In the biggest tax reform since it was introduced in 2000, Treasurer Scott Morrison will change the six-year distribution formula from 2021 to 222 to ensure that there is no no repeat of the fall from WA's share at 30 cents a dollar. From 2026 to 277, the formula will be modified so that only the most stable and tax-stable states, NSW or Victoria, will serve as a reference for the GST money allocation, so that the strongest states will always support the weakest.
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To avoid any reaction from other states that would lose money back to WA, the government will introduce a floor without a falling state, which requires make federal compensation a permanent part of the GST account, which, for the current fiscal year, amounted to nearly $ 70 billion. The federal government's contribution quickly rises to $ 1 billion a year and will be indexed at the same pace as the GST collections.
If states agree, as expected, the changes will put an end to a problem that has upset governments "This problem has been launched for far too long and it is time for us to do it and repair it," Morrison said.
. , which follows a study by the Productivity Commission, will be introduced in three stages.
First, in 2019-2020 and 2020-21, the Commonwealth will spend a total of $ 1.47 billion to bring the share of the GST to WA, which is currently about 47 ¢, returning to above 70 ¢ for every dollar of TPS income that it raises. A small portion of this amount, $ 69 million, will be used to stabilize the volatile portion of the Northern Territory. This sounds like an election promise of the Labor Party
. The second phase will begin in 2021-22 and over the next six years, the Commonwealth will provide an additional $ 5.2 billion to ensure no one is behind in the transition to the new formula. GST revenues The second step also includes the introduction of a floor of 70 ¢ in 2022-23 and a floor of 75 ¢ in 2024-25
The current formula of horizontal fiscal equalization (FTE) GST aims to ensure that all states were typically NSW or Victoria with their broad, diversified and stable economies that were not subject to volatility if a sector suddenly exploded.
But the HFE system was not designed to deal with such aberrations as small states like WA become fiscally strongest because of a single event like the mining boom.
"It is only recently that the benchmark has shifted to WA because of the mining boom that, relying on a particular sector, has led to substantial volatility in the sector. HFE ", the government's answer says
This meant that GST revenues were stripped from WA and distributed to other states
In the HFE system, it was not foreseen and could not reasonably be expected when the GST was introduced at a time when the economy of Australia seemed very different from what it is today, says the answer
. retain the formula HFE at present, but compare it only to NSW or Victoria, whichever is greater.
"The diversified and broad-based economies of these states provided a much more stable standard for equalizing GST revenues, which limits [19659002] The third phase of the plan provides for financing Commonwealth Complementary Plan
The government ignored the Productivity Commission's recommendation to transfer Equalization to the average of all states. It would have been prohibitive and politically volatile. It would have cost between $ 16 billion and $ 23 billion in compensation over the first eight years, depending on how quickly the change was introduced.
Mr. Morrison stated that this would have created "an unnecessary level of disorganization and transition costs and the Commonwealth would not be able to accept or reasonably absorb."
M. Morrison will seek states' agreement for the new formula at a meeting of treasurers in September.
Government sources said any state that was not happy with the new formula could have the option of staying under the current formula, but that meant that they would lose money.
The government will also give badurances that the additional funding will never come at the expense other grants to
It is expected that a new intergovernmental agreement, such as that signed first between Peter Costello and the states in 1999, will be negotiated.
The Government Expects that the announcement supports its p rospec A few years ago, a state labor government was elected and the federal government, which holds 11 of the 16 seats in the United States, runs the risk of losing its independence. lose about three
The government chose not to challenge the Labor seats in Fremantle and Perth in the by-elections on Saturday, July 28. Even though he was unlikely to win one or the other, he wanted to avoid the specter of a big move towards the Labor Party and any negative consequences for Malcolm Turnbull [19659027] requirejs.config ({
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