WA on track to receiving zero GST return, Crook

THE first interim report by the Federal Government’s GST Distribution Review board has acknowledged that Western Australia could be ruled out of GST returns entirely in the “medium to long term.”

Nationals WA Federal Member for O’Connor, Tony Crook MP, said the report validated his claims that significant reform to the GST distribution process is essential for Western Australia’s economic future.

Mr Crook said Western Australian residents should be concerned about the State’s economic future as our GST return continues to diminish.

“A zero per cent GST return would be an unquantifiable economic loss to our State.”

“We already know that WA’s GST return is expected to drop to 55 per cent next year, on its way to 36 per cent by 2014-15.

“Depending on the strength of the resources industry, this return could continue to diminish, costing the State billions of dollars each year.”

Mr Crook said the report was not all “doom and gloom” as it recommended a number of reforms that would improve the GST distribution process.

“While the interim report does not make any formal recommendations, it suggests several reforms that WA could benefit from.”

Mr Crook said many States agreed that the current GST distribution process – through Horizontal Fiscal Equalisation - is overly complex, unpredictable, and not transparent.

“There is certainly a need for this formula to be fair, simple, transparent and predictable, to allow all States to plan their Budget’s reasonably.”

Mr Crook said while he welcomed a number of reform options that could potentially benefit Western Australia – including more adequate recognition of State spending on mining infrastructure and a lowered penalty rate for iron-ore royalty increases – his proposal to establish a GST floor was dismissed.

“It is disappointing that the review does not support a GST floor, as this proposal is supported unanimously by the WA State Parliament, and would have a greater ability to address GST distribution anomalies than the proposed reforms combined.”

Mr Crook was the only Federal Member of Parliament to enter a submission into the GST Review Board.

“Given the impact the GST distribution is likely to have on our State’s future, it is particularly disappointing that none of Western Australia’s Federal MPs involved themselves in this process.”

The GST Review Board is expected to table an further interim report in November.

Further information on WA’s GST rip-off can be found online at www.tonycrook.com.au.