TOPIC:

We are 2 billion a year out of pocket with our GST distribution. This will give us an extra 800 million a year.The question has to be asked how this terrible arrangement ever happend to Wa in the first place.Just get the feeling some on the East coast just love the pain its caused Wa.
Not good enough by the major party's on Wa Gst.You would think they would learn what happens if you kick and screw people for a long time.Enter President Trump and an alternative type of politician.

In its most simplistic form and without going into HFE which has been around since year dot in one form or another, the reason is that WA receives royalties for its minerals etc which are considered national resources...therefore the GST distribution is adjusted to take that into account. Because the current system has a 3 year lag in the formula, during the mining boom WA was receiving huge royalties and GST but then when the boom went bust, the royalties dried up and our share of GST went south as well because of the aforesaid 3 year lag. It really does make the states resource sector a disincentive to develop but thankfully the current plan by the govt takes that into account with a floor of 70 cents in the dollar rising to 75 in 2025 I think it was...so even if WA goes through another mining boom we'll never get down to 30 odd cents in the dollar in GST like we did a year or so ago.

Cheers BC.
I was not aware of the formula. The funds should simply be distributed evenly I would have thought. WA's share started heading south in 2008/ 09 and hasn't got any better since then.
Lets hope blundersville stops stuffing around and keeps to it's word.

westaussieguy wrote: Cheers BC.
I was not aware of the formula. The funds should simply be distributed evenly I would have thought. WA's share started heading south in 2008/ 09 and hasn't got any better since then.
Lets hope blundersville stops stuffing around and keeps to it's word.

Didn't Rudd/Gillard rule the roost from 2007/2010? Did they cause this? Couldn't have been the Libs as they weren't in power?

BC wrote: In its most simplistic form and without going into HFE which has been around since year dot in one form or another, the reason is that WA receives royalties for its minerals etc which are considered national resources...therefore the GST distribution is adjusted to take that into account. Because the current system has a 3 year lag in the formula, during the mining boom WA was receiving huge royalties and GST but then when the boom went bust, the royalties dried up and our share of GST went south as well because of the aforesaid 3 year lag. It really does make the states resource sector a disincentive to develop but thankfully the current plan by the govt takes that into account with a floor of 70 cents in the dollar rising to 75 in 2025 I think it was...so even if WA goes through another mining boom we'll never get down to 30 odd cents in the dollar in GST like we did a year or so ago.

And quite conveniently revenue from pokies is EXEMPT from GST distribution calculations. And which is the only state in Australia that is responsible enough to resist filling pubs and clubs with pokies?

Gtr I've been asking that question for a while now. Who was the useless premier from WA who signed off on the GST distribution formula in the first place?

I believe the loss of our GST is the single biggest thing that has hurt and still hurting our economy here in WA even more so than the mining boom coming to an end. Getting more of our GST back will lift everyone's optimism around the state knowing the government now has a chance to get the balance sheet back into a healthier state and hopefully we can get our AAA credit rating back to further help reduce debt.

Fiscal Equalisation between states where the richer states subsidise the poorer one's has been around in one form or another for years...who came up with the distribution formula for GST is anyone's guess. I'd be thinking it was probably Treasury or similar but not sure the states are required to sign off on it. Yes all states and territories must agree to a GST rate change but I'm not sure it's the same for other things associated with the GST like distribution rules....so it could be WA was lumbered with the current system....who knows? The Commonwealth Grants Commission currently has the job of working out who gets what but they're pretty much at the mercy of the government of the day. The CGC recommends who gets how much but it's up to the Treasurer to decide at day's end.

swan42 wrote:

Bazza wrote: Just listened to Whyatt on the radio he sounds wrapped,

Swan Im surprised you didn't post this on a footy thread..

Bazza I am surprised you are making up Liberal Party politicians.

Western Australians won't be fooled by Sco Mo's trickery.

Are you talking code now?

I take it that makes the WA State Labor Treasurer a fool then because he is more that happy with the deal and also went onto say the working relationship with the federal gov has been a good positive one...probably not exactly music to bull shittens ears or your by the sounds.

BC wrote: Fiscal Equalisation between states where the richer states subsidise the poorer one's has been around in one form or another for years...who came up with the distribution formula for GST is anyone's guess. I'd be thinking it was probably Treasury or similar but not sure the states are required to sign off on it. Yes all states and territories must agree to a GST rate change but I'm not sure it's the same for other things associated with the GST like distribution rules....so it could be WA was lumbered with the current system....who knows? The Commonwealth Grants Commission currently has the job of working out who gets what but they're pretty much at the mercy of the government of the day. The CGC recommends who gets how much but it's up to the Treasurer to decide at day's end.

Yep spot on BC, further over course of the Commonwealths history WA has been the net recipent of National Funds rather than a loser, at the time the GST came we were actually being subsidized for several years, so the formula hasn't always had a down side for WA, the recent mining boom a freak event I guess , meant we got hit with a fair bit of pay back. Unfortunately as you rightly say it rewards the states ( medicant ) that do not develop their own resources, SA could be rolling in dough if it could export Uranium, but it cant. Im not really sure what you can do for Tasmania, as for the NT its a massive financial black hole due to Government funds being spent of Indigenous Welfare and failed projects.

WA cant cry too much we are the only state to have made the mind blowingly stupid decision to go without gambling revenues, thats our decision not anyone else s.

All that being said, I'd crank the GST up to 15% , bugger off most of the exemptions and distribute of on per capita basis.

and Introduce pokies to WA.
Job done.

Bazza wrote:

BC wrote: Fiscal Equalisation between states where the richer states subsidise the poorer one's has been around in one form or another for years...who came up with the distribution formula for GST is anyone's guess. I'd be thinking it was probably Treasury or similar but not sure the states are required to sign off on it. Yes all states and territories must agree to a GST rate change but I'm not sure it's the same for other things associated with the GST like distribution rules....so it could be WA was lumbered with the current system....who knows? The Commonwealth Grants Commission currently has the job of working out who gets what but they're pretty much at the mercy of the government of the day. The CGC recommends who gets how much but it's up to the Treasurer to decide at day's end.

Yep spot on BC, further over course of the Commonwealths history WA has been the net recipent of National Funds rather than a loser, at the time the GST came we were actually being subsidized for several years, so the formula hasn't always had a down side for WA, the recent mining boom a freak event I guess , meant we got hit with a fair bit of pay back. Unfortunately as you rightly say it rewards the states ( medicant ) that do not develop their own resources, SA could be rolling in dough if it could export Uranium, but it cant. Im not really sure what you can do for Tasmania, as for the NT its a massive financial black hole due to Government funds being spent of Indigenous Welfare and failed projects.

WA cant cry too much we are the only state to have made the mind blowingly stupid decision to go without gambling revenues, thats our decision not anyone else s.

All that being said, I'd crank the GST up to 15% , bugger off most of the exemptions and distribute of on per capita basis.

and Introduce pokies to WA.
Job done.

In answer to your last two sentences Bazza, No thanks and No thanks. I will NEVER agree to giving governments more than what they already rake in because all they do is waste it and drive the country further into debt. We are already one of if not the highest tax paying country in the world. We need a Donald Trump to come in and put a broom through the fat cats bludging of our taxes and wasting OUR MONEY.

BC wrote: In its most simplistic form and without going into HFE which has been around since year dot in one form or another, the reason is that WA receives royalties for its minerals etc which are considered national resources...therefore the GST distribution is adjusted to take that into account. Because the current system has a 3 year lag in the formula, during the mining boom WA was receiving huge royalties and GST but then when the boom went bust, the royalties dried up and our share of GST went south as well because of the aforesaid 3 year lag. It really does make the states resource sector a disincentive to develop but thankfully the current plan by the govt takes that into account with a floor of 70 cents in the dollar rising to 75 in 2025 I think it was...so even if WA goes through another mining boom we'll never get down to 30 odd cents in the dollar in GST like we did a year or so ago.

BC had a floor of 70 cents in the dollar been proposed earlier this year or last year and by whom prior to the current government's announcement?