Scott Morrison's GST carve up so far fails to convince ACT government
Treasurer Scott Morrison has so far failed to convince the ACT government there is a strong case for changing Australia’s GST carve-up.
On Thursday Mr Morrison announced plans for the first GST redesign in almost two decades, following the release of a landmark Productivity Commission report.
Federal government statistics showed that, under the new plan, the ACT would receive an additional $46 million in GST by 2026-27, the lowest gain of any jurisdiction.
ACT Chief Minister and Treasurer Andrew Barr said questions remained over the need for change.
“The ACT is not convinced the case for a change to the existing GST distribution mechanisms has been made,” Mr Barr said.
“The current system ensures all Australians can receive the same quality of services no matter where they live – this is not a principle we should trade away lightly.”
It was vital the ACT was not left worse off as a result of any GST shake-up, Mr Barr said.
“We will engage constructively with the Commonwealth and other jurisdictions in the coming discussions on this proposal.
“But first and foremost we will be holding the Commonwealth to their commitment that the ACT is not worse off as a result of any change.”
On Wednesday a landmark report by the Productivity Commission came to light, including recommendations for sweeping GST reforms that could cost the ACT $970 million by 2026-27.
Prime Minister Malcolm Turnbull was quick to scotch the recommendations, saying no jurisdiction would wind-up worse off as a result of GST changes.
Instead, Mr Morrison outlined an alternative plan that will put a permanent GST offset in the federal budget, established in perpetuity and indexed at the GST growth rate of 5 per cent.
The majority of the GST boost will flow to WA, which will receive $3.3 billion by 2026 on top of a $1.4 billion increase by 2020.
NSW will receive $351 million and Victoria will receive $425 million over the same period of time.