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Posted: Oct 9 2017, 06:36 PM
Group: Featured Blogers
Member No.: 17
Joined: 17-January 12
Rep: 144 pts
Federal Treasurer Scott Morrison says it’s time for a proper GST fix
Colin Brinsden, AAP
Monday, 9 October 2017 10:54AM
The way GST revenue is carved up among the states needs a proper fix, rather than more “band-aids and bolt-ons“, Treasurer Scott Morrison says.
Responding to a Productivity Commission’s draft report on how the GST is distributed, Mr Morrison says there is still a long way to go to resolve the issue, which has especially hit Western Australia.
The resources State had its revenue share reduced to less than 30c in the dollar at the end of the mining boom, but the treasurer says the report also shows it is not just a WA problem, but a national issue.
“It is finding that the current way we do this is holding our economy back,” Mr Morrison told reporters in Sydney on Monday.
The present system means states and territories have a disincentive to undertake positive changes to their tax systems and make the most of the resources and minerals they have.
The commission says providing top-ups - such as the federal government’s $1.2 billion payment to WA to stop its GST falling below 37c - or setting a GST floor are not longer-term solutions.
The report recommends resetting the horizontal fiscal equalisation system, which determines how revenue is shared, from “full” equalisation - now interpreted as bringing everyone up to the fiscal standard of the strongest state - to a more practical objective of “reasonable equalisation”.
KPMG tax partner Grant Wardell-Johnson says revising the target to the second highest or average state seems a sensible approach.
“It will still provide states a high level of fiscal capacity, but not be distorted by the extreme swings of one state,” he told AAP.
The draft report will be discussed with Mr Morrison’s State and Territory counterparts at the Council of Federal Financial Relations on October 27, which will also be attended by the Productivity Commission.
The draft report didn’t make any recommendations on gas policy, although Prime Minister Malcolm Turnbull has threatened to cut grants to States such as NSW which don’t develop their gas resources.
This is an issue that WA has been crying out for over several years. The other states won't like any revision that reduces their GST take, but they have "sponged" off WA for long enough!
“If life were predictable it would cease to be life, and be without flavor.” - Eleanor Roosevelt
“All of life is peaks and valleys. Don’t let the peaks get too high and the valleys too low.” - John Wooden
Posted: Oct 9 2017, 06:58 PM
Member No.: 1
Joined: 20-July 11
Rep: 47 pts
The GST paid in a state should be returned to the state. Plain and simple.
Living In An Elected Dictatorship
Flin's opinions and comments reflect his perception of the facts and not necessarily reality
Posted: Oct 9 2017, 07:09 PM
Group: Active Member
Member No.: 48
Joined: 15-February 12
Rep: 17 pts
You can't bring everyone up to the level of the top state. You can only drag the top state down to a median level.
While the lower states are getting more; the top state stagnates, its infrastructure ages at the expense of the others.
This post has been edited by lee: Oct 9 2017, 07:10 PM
Life is neither a race to the end, nor a slow ramble whose sole aim is longevity
Do not regret growing older. It is a privilege denied to many.
Posted: Oct 12 2017, 05:34 PM
Group: Active Member
Member No.: 79
Joined: 7-August 13
Rep: 10 pts
Before the interview with Saul Eslake, Brian Carlton was stating how much money WA has spent on itself, more or less WA is being selfish. I don't have an issue with this - as Flin indicates the GST earn by a state should remain in that state - good on WA for investing in their infrastructure!
Saul Eslake talks Tasmania's GST fight.
A productivity commission report has recommended that changes be made to the national GST carve-up, and could see Tasmania lose up to $1 billion over four years. With Western Australia leading the charge for reform, the question may not be whether or not the system is changed, but how. Economist Saul Eslake talks with Brian Carlton about the different options the government may look at to change the GST system, so that WA would still stand to gain money but the other states will not lose out significantly. “[Government would have to say to WA] That’s it, you’re not getting any more, fix up your own problems that you’ve made, and be quiet,” says Mr Eslake.
Politicians and diapers should be changed frequently and all for the same reason.
~José Maria de Eça de Queiroz,
We live in a world in which politics has replaced philosophy. ~Martin L. Gross, A Call for Revolution, 1993
"Stupid people are like glow sticks: I wanna snap em and shake the shit outta them till the light comes on."
Posted: Oct 12 2017, 06:02 PM
Group: Active Member
Member No.: 53
Joined: 13-March 12
Rep: 11 pts
It does get a bit tedious when the pollies keep saying that someone else has to fix it because they can't. I am hereby offering my services to make the rules more palatable.