Productivity Commission Calls 2018 GST Deal Costly Mistake

The Productivity Commission released an interim report describing a 2018 Goods and Services Tax (GST) distribution deal as a costly mistake. The report finds that the arrangement, which established a floor on the per-person share of GST for Western Australia, has failed its objectives and created a less equitable system. The commission estimates the deal cost taxpayers nearly $23 billion by 2024-25, with projected costs reaching $60 billion by 2030. It specifically highlighted perverse outcomes where Western Australia received financial windfalls while other states suffered natural disasters.

While every other state and territory government has called for the deal to be amended or scrapped, Western Australian Premier Roger Cook vowed to fight for the current arrangement. Cook claims the state would lose between $1 billion and $6 billion if the commission's recommendations are implemented.

Prime Minister Anthony Albanese has reassured Western Australians that they will receive a fair share of the national economy. While he has not ruled out changes, he stated the federal government will wait for the commission's final report, due by the end of 2026, before making a decision. Meanwhile, Queensland Treasurer David Janetzki urged Federal Treasurer Jim Chalmers to reform the system, characterizing it as unfair and broken.