Malcolm Turnbull is under pressure from one of his own to send the GST mess to an independent review amid concerns the Liberal Party could be wiped out in WA at the next Federal election.
Senator Dean Smith said yesterday the State election result had to be the impetus for real action by the Federal Government to ensure WA was no longer short-changed and received a fair share of the GST distribution.
The Commonwealth Grants Commission will reveal the GST carve-up next week.
The WA Treasury expects the State to get just 38.8¢ for every dollar of GST raised.
Senator Smith wrote to the Prime Minister in November 2015, when WA’s GST share had fallen to 30¢ in the dollar, urging a Productivity Commission review that would look at the Commonwealth Grants Commission system.
Senator Smith said then that a review could consider a floor for the GST and the timing of its introduction in a non-partisan manner.
Senator Smith said yesterday there was no getting away from the importance of the GST to WA voters. A commission review would provide an analysis that took into account the economic damage being caused to WA by the current distribution.
“The GST issue for West Australians is like back pain — it’s always there, it’s distressing, it makes you grumpy,” Senator Smith said.
There is concern among Liberal MPs about the GST issue and the way it has been handled by Mr Turnbull, who made just a 20-hour appearance during the election campaign.
Huge swings in key Liberal-held seats such as Pearce, Hasluck and Swan, plus the collapse of the Liberal Party’s support in the Upper House, have sparked concerns the Turnbull Government could lose its hold on power because of WA.
The Government has a one-seat majority in the House of Representatives.
For the past two years, WA has been given $500 million by Canberra to take its GST allocation to 2014 levels.
WA is unlikely to qualify for such assistance this time.
Chamber of Commerce and Industry chief Deidre Willmott said it was clear the GST allocation system was broken.
With the incoming McGowan government facing substantial Budget pressures, a change to the GST distribution would alleviate some of the State’s financial pain and improve the operation of the Federation.
“While the State government has a job ahead to rein in spending and that must be its first priority, the people of Western Australia should not bear the burden of paying more debt taken on to cover our shortfall in GST,” Ms Willmott said.
“The Federal Government has a major problem with the tax system. It needs to be reformed, including the GST.”