Four eminent Western Australian businessmen will step into the ring again to convince the federal government the 75-cent floor on the state’s GST share should remain in place.
Four eminent Western Australian businessmen will step into the ring again to convince the federal government the 75-cent floor on the state’s GST share should remain in place.
Land developer Nigel Satterley, Fortescue founder Andrew Forrest, corporate advisor John Poynton, and Wesfarmers chairman Michael Chaney have been called up by the Chamber of Commerce and Industry WA to advocate for what the state argues is a fair GST deal.
The four Sandgropers played a central role in lobbying former prime ministers Malcolm Turnbull and Scott Morrison for the 2018 deal which put a 75-cent floor under the state’s GST share.
In the years leading up to that decision, WA’s GST share had fallen to 30c in the dollar due mainly to strong iron ore royalties.
Some $6bn in extra GST royalties will be shovelled into WA’s coffers this financial year alone because of the deal.
That is more in one year than initial forecasts which had WA $4.7bn better off over eight years.
Now, with the Productivity Commission reviewing the deal, CCIWA chief economist Aaron Morey said the federal government would come under immense pressure from other states to make changes.
“Prior to the 2017 deal, WA had subsidised the other states to the tune of $36 billion since the GST was introduced,” he said.
“Those other states are desperate for WA to pick up the tab again.
“Having these four icons of WA business front and centre of the campaign, along with the WA government and other advocates, will help to drive home the oversized contribution our state makes to the rest of the country.”
Productivity Commissioner Danielle Woods has until the end of next year to probe whether the arrangements struck in 2018 are working effectively.
A Grattan Institute report co-authored by Ms Woods prior to taking on her current role recommended scrapping the deal, lifting the GST rate to 15 per cent, and removing exemptions.
The federal government has already ruled out a hike to 15 per cent and has backed the 75-cent floor for Western Australia.
Advocates in Western Australia have argued the changes made in 2018 work in the national interest; the state remains a relative contributor to the rest of the nation.
Former premier Colin Barnett this year pitched an idea to guarantee states and territories get back 90 per cent of the GST revenue they generate, with the remaining 10 per cent spent where it was needed.
The NSW, Queensland and South Australian governments have been particularly vocal in opposition to the existing arrangements.
Prominent economist Saul Eslake described it as the “worst public policy decision of the 21st century”, noting a $50bn hit to the Commonwealth budget and its favourable terms to the nation’s “richest state”, Western Australia.
The state government has regularly used war-like rhetoric in defending the deal, something the CCIWA has latched onto by naming its new lobby group the GST Deal Defender Steering Committee.
WA Premier Roger Cook in November appointed former under treasurer Michael Barnes to lead a “GST fairness fighter” team, funded by a $1.6m kitty.
A CCIWA survey conducted recently found more than 60 per cent of Western Australians were concerned about cuts to WA’s GST share.
“The GST revenue returned to WA as part of the 2018 deal has ensured our state can build the vital economic infrastructure that fuels our contribution to the nation,” Mr Morey said.
“Roads, rail, power transmission and port infrastructure are all vitally important to getting WA’s resources to the world, and those returns flow back to all Australians, not just those of us in the west.”
