Joe Hockey has signalled Western Australia could emerge with a bigger slice of revenue under the goods and services tax, after hosing down that suggestion during the recent New South Wales election campaign.
The federal treasurer said in Canberra on Wednesday that WA had been “hit very hard by not only falling iron ore prices, but also falling GST revenue, and I totally recognise that”.
Hockey will meet state treasurers in Canberra on Thursday.
That meeting will touch on the GST carve-up and other federal/state issues, including the $80bn shortfall in funding for schools and hospitals imposed in the Abbott government’s first budget in May 2014. NSW is expected to be among the states to raise concerns about the funding gap. The Baird government said the federal decision cost the state budget $2bn.
During the recent NSW election, Hockey hosed down reports that WA was set to emerge with a larger slice of the GST pie courtesy of a review of the distribution methodology.
The Australian Financial Review reported in March that WA could emerge with an extra $547m in 2015-16 courtesy of a tweak to the formula that would take account of the state’s declining revenue from iron ore royalties. NSW would lose $200m under the mooted change.
Hockey was asked on Wednesday whether his recent assurance to NSW remained current. The treasurer told parliament on 18 March there “will be nothing of any concern to the NSW government associated out of this review”.
On Wednesday, Hockey gave a more non-specific response. “I don’t think New South Wales has anything to worry about as a general principle, particularly after the election of the Baird government,” he said.
Ahead of the meeting, the NSW treasurer, Gladys Berejiklian, warned NSW would continue to press for its fair share of GST revenue. “I am looking forward to discussing a range of issues with the treasurer in Canberra tomorrow and that includes ensuring NSW gets its fair share of GST revenue,” she said.
“We have been very clear on this issue, we want our per capita share of GST and that’s what we will continue to fight hard for.”
The federal treasurer said on Wednesday he did not want to pre-empt Thursday’s discussion, but he had “concerns about what’s happening to Western Australia”, and would discuss those concerns with other treasurers at Thursday’s meeting.
Hockey said he had been lobbied extensively by the WA government and WA-based colleagues in the federal parliament. The GST carve-up was “an issue that has been at the forefront of discussions with, not only the Western Australian state government, but also the members of parliament from WA and senators.”
“So we’ve been actively engaged in it. I’m not going to pre-empt any discussions on outcomes. But as they’ve been hit hard, so have we. Iron prices are at extraordinary levels compared to what they were and what they were expected to be and that has a very real impact on our revenue,” he said.
Hockey said his expectation was that any change to the status quo on the GST carve-up would be “a consensus position”.
