Changes to the GST: How WA Will Benefit from the Revision of the Tax on Long Term Interest Goods

Updated

05 July 2018 14:17:26

Western Australia would benefit from an additional $ 4.7 billion under the federal government's GST proposal to prevent the economic shocks that drove the economy down. share of the state after the mining boom. [19659005] Currently, WA receives 47 cents for every dollar that it sends to federal coffers, an improvement over the 34 cents received in 2017-18.

WA's share of the GST has fallen in recent years because the Commonwealth Grants Commission viewed it as "the state with the highest fiscal capacity," long after the end of the mining boom. According to the Langoulant report on state finances released in February, the former Barnett government botched major projects, ignored the warnings of senior officials and did not address the issues of governance and accountability. management, contributing to large deficits and rising debt

If nothing changes, the state's share will reach more than 76 cents a dollar on that date

To improve the stability of the GST the allocation of GST funds, the federal government compare the funding of all states either to NSW or Victoria .

It was previously compared to WA, as the best-performing state because of the mining boom.

But the government says that comparing the GST distribution with the two largest economies in the country would reduce the volatility of the system because they do not depend on a particular sector like WA, which is heavily dependent on mining. 19659014] A first push to put WA back in the game

The first stage of the plan would see WA receive additional special payments worth $ 1.4 billion until 2020 -2021 to help existing base very low

This would also guarantee that WA did not receive less than 70 cents on the dollar during the transitional period.

The second stage would go to the new distribution system calibrated at NSW or Victoria, according to the strongest

More than six years from 2021-22 to 2026-27, WA would receive $ 3.303 billion more than It would not do otherwise

How will they ensure that WA's share does not slip anymore?

For the first time, a floor rate will be established, below which no state will be authorized autumn

The floor of 70 cents per person per dollar of GST would be introduced for all states in 2022-23, and two years later, the floor would be increased to 75 "The relativity of a state should not fall below 0.75 after 2024-2025 on current projections under the new equalization benchmark, "said the federal government's interim response to the productivity commission survey on the GST system