Fixing GST redistribution is dead simple: Colin Barnett



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Fundamental reforms need to be made to GST distribution based on population, according to WA Premier, the Hon. Colin Barnett.

Speaking at CEDA’s State of the State forum in WA, Mr Barnett said: “Fixing our simple redistribution income within Australia is dead simple.

“No one, including myself, has ever said you need to do it overnight but you need to gradually correct that fiscal imbalance, otherwise you hold back the successful parts of the economy and you reward the unsuccessful.”

On the Commonwealth Grants Commission, which recommends how GST revenues raised should be distributed among Australia’s states and territories, Mr Barnett said the Commission hasn’t kept pace with modern Australia.

The Commission dates back to the 1930s and “is still making deliberations that were deigned back in that period,” he said.

“I think the Commonwealth Grants Commission’s process is completely out of date, I think it’s a black box that no one understands…it has outlived its usefulness,” he said.

Currently, WA gets 37 cents in the dollar, which means WA lost $3.7 billion this year, Mr Barnett said.

While Mr Barnett said he could wear smaller states like Tasmania and South Australia receiving $500 million and $750 million respectively, he wouldn’t wear Queensland and the Northern Territory receiving $600 million and $1.7 billion respectively.

“We get less money in dollars than we did 10 years ago,” he said.

On the state’s economic structure, Mr Barnett said while WA is now uniquely placed to see a broadening of the economy, we need to be mindful of our natural advantages.

“We would be making a mistake if we took our attention away from our natural advantages,” he said.

“As long as we don’t lose sight of our own strengths, our strong sectors in mining, petroleum and agriculture, we can achieve that (economic broadening).

“I dismiss any talk that WA has had its glory days…our glory days are still in front of us.”

Iron Ore production will double this decade, and LNG production will treble, he said.

It should also be possible to double the size of the state’s $7 billion agriculture industry, he said.

“I think Western Australia should always strive to do a limited number of things but do them superbly,” he said.