States query GST carve-up despite ‘constructive’ budget

States are split on the federal budget as the two most populous jurisdictions question their GST shares, while resource-heavy Western Australia counts its riches.

NSW will be the biggest loser from the annual GST distribution set out in the budget papers, which say it will receive more than $1.9 billion less in 2024/25 than projected a year earlier.

It has also won support from Victoria for an overhaul of the carve-up to deliver a per-capita distribution, despite the southern state benefiting from a $2.2 billion lift in GST share compared to the previous forecast.

NSW Premier Chris Minns on Wednesday repeated calls for GST distribution on a per-capita basis, which would leave his state substantially better off.

“(That) is the only fair way of ensuring states like NSW can grow, contingent with the real pressures we’ve got on our budget but also the services we have to deliver to millions of people,” he said.

“A different carve-up of the GST is what NSW needs and we think it deserves.”

NSW is slated to receive 27.6 per cent of the GST funding in 2024/25 despite being home to 31.2 per cent of the population, while Victoria is scheduled to get 25.1 per cent but is home to 25.7 per cent of people.

The Victorian government noted a “dramatic improvement” in its dealings with Canberra, having pulled in a significant share of extra infrastructure spending unveiled in the budget.

“”Am I satisfied? The simple answer is no,” state treasurer Tim Pallas said.

“But do I recognise the Commonwealth has made a constructive contribution? Yes.”

Federal Treasurer Jim Chalmers laughed off suggestions he had let down his Labor colleagues in NSW, adding that states complaining of underfunding was “a story as old as federation”.

“NSW does really well out of the budget, heap of new infrastructure projects with a big emphasis on western Sydney, new housing investment, new health investments,” he said.

NSW Treasurer Daniel Mookhey previously warned the state would likely lose its AAA credit rating if federal support dropped, pushing his budget into the red.

Mr Minns welcomed the key road and infrastructure funding for NSW and remained hopeful of fruitful discussions on upcoming health and education deals.

Meanwhile, Western Australia says nearly $20 billion in support will help it become a “world leader in the downstream processing of critical minerals”.

A 10 per cent production tax credit for critical minerals producers, worth $17.6 billion over 14 years, is expected to deliver a big win for the resource-rich state.

‘”I congratulate the government for its foresight and vision to assist WA in becoming a world leader in the downstream processing of critical minerals and production of renewable hydrogen,” Premier Roger Cook said.

Queenslanders are set for an electricity rebate double-up with the Albanese government’s $300 on top of their own $1000 announced earlier this month.

Premier Steven Miles said the “massive” rebate was a big win for the state’s families.

Australia’s only Liberal treasurer – Tasmania’s Michael Ferguson – echoed criticisms made by the federal opposition, labelling the budget “inflationary” and “an election budget designed to put money into people’s pockets”.


Alex Mitchell, Jack Gramenz and Callum Godde
(Australian Associated Press)


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