Eastern States Pressure Federal Treasurer on Western Australia’s GST Deal
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Eastern States Pressure Federal Treasurer on Western Australia's GST Deal
- Eastern state treasurers are advocating for changes to a 2018 Goods and Services Tax (GST) agreement that benefits Western Australia, an arrangement projected to cost the federal budget $60 billion over 11 years.
- The Productivity Commission is reviewing the 2018 GST reforms, with an interim report due on August 14, 2026, and a final report expected by December 31, 2026.
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Eastern Australian states are intensifying pressure on Federal Treasurer Jim Chalmers to reconsider the existing GST distribution deal benefiting Western Australia. This arrangement, introduced in 2018 under former Treasurer Scott Morrison, guaranteed Western Australia a minimum of 75 cents for every dollar of GST revenue it raised, with the Commonwealth topping up other states to ensure they were not worse off. The deal was intended to address concerns from Western Australia that it was not receiving a fair share of GST revenue, particularly during mining booms when its per capita share decreased due to its strong economic performance.
However, the “no worse-off” guarantee, initially estimated to cost $9 billion over eight years, has significantly blown out, with current federal estimates projecting a cost to the federal budget of $60 billion over 11 years to 2029. This substantial cost has fueled calls from other states and some economists for a review and potential reversal of the policy.
The Productivity Commission launched its scheduled review into the GST distribution arrangements in September 2025, with an interim report expected on August 14, 2026, and a final report by the end of December 2026. The review aims to assess whether the 2018 reforms are operating as intended and how the system can best promote fiscal sustainability across all states and territories. Western Australia has, however, strongly defended the current deal, with Premier Roger Cook warning that removing the floor could cost the state approximately $6 billion annually. Both Prime Minister Anthony Albanese and Treasurer Jim Chalmers have repeatedly affirmed their support for Western Australia receiving its “fair share” of GST.