Jim Chalmers' GST review opens door to unwinding WA’s sweetheart deal
Economist Saul Eslake, a key critic of the GST carve-up, says he supports the scope of the review, arguing it should be enough to justify overturning the WA deal.
Treasurer Jim Chalmers’ review of the 2018 GST arrangement, to be undertaken by the Productivity Commission, paves the way to overturn a deal with Western Australia that has long been criticised as overly generous.
One of the nation’s most outspoken critics of the current GST carve-up, Tasmania-based independent economist Saul Eslake, said the review should be enough to prompt a complete shake-up of the deal and make it less favourable to WA.
The arrangement was struck in 2018 by then-treasurer Scott Morrison and former WA premier Mark McGowan. It delivers 75c of every dollar raised in GST in the state back to WA.
By the end of 2030 this will provide WA with about $50 billion more than it would have received under the Commonwealth Grants Commission formula, which penalises the state for its ability to raise billions in mining royalties from soaring iron ore prices.
