Jim Chalmers’ $23 billion GST commitment to WA recognises State’s crucial role in economy

The Budget papers contain a $23 billion demonstration of the Federal Government’s commitment to WA, Jim Chalmers says as he highlights the State’s importance to Australia’s continued prosperity. That’s the amount of extra GST revenue flowing WA’s way over the next four years because of the 70¢ floor. The Treasurer will reiterate Labor’s commitment to the 2018 GST deal when he addresses the Leadership Matters forum on Thursday. “Given the contribution that WA makes to the national economy, to national revenue, it’s only right that you get your fair share,” he will say, according to a draft version of his speech. Dr Chalmers has been under pressure from east coast Premiers and economists to alter or scrap the deal, which also includes “no worse off” payments to other States during a six-year transition phase set to end in mid-2027. But he says he is proud of and committed to a deal that rectified a situation where WA received just 10¢ on every dollar of GST revenue raised in the State. Without it, WA would have received just $900 million in GST payments in 2023-24, instead of the $6.52 billion included in the Budget. “I hope that demonstrates that we will always try to do what’s right by Western Australians,” Dr Chalmers says. “We believe this arrangement better reflects the contribution that WA makes to the national economy. And that’s why we are sticking to it.” His commitment cements the deal, after shadow treasurer Angus Taylor reaffirmed the Coalition’s support and said the right balance had been found. “The Federation, as you rightly say, has been fighting on the sporting field and on the economic field for as long as ... the Federation’s existed,” Mr Taylor told the National Press Club on Wednesday. In Dr Chalmers’ speech, he talks up the alignment in approach between his Budget and the one delivered by Premier Mark McGowan two days afterwards, which Dr Chalmers describes as “close both in time and in the priorities and values it expressed” to his own. Both governments are seeking surpluses not for their own sake but to build a sustainable, solid foundation from which to help vulnerable people and invest in the future, he says. The Treasurer also lauds the way Mr McGowan worked with the Commonwealth on primary health care, energy relief and housing — though he seems sceptical about the Premier’s personal budget prep. “Mark, late at night a few days ago, I stumbled across a picture of you in the lead-up to your own Budget — Swan Draught on the table, KFC next to you, ready to deliver your surplus. It might be the most West Australian photo on the internet,” he says. Last week’s Federal Budget showed a massive turnaround in the state of the nation’s finances, with a $4.2 billion surplus now tipped for the current financial year in place of the $36.9 billion deficit forecast in October. Treasury has put the windfall revenue down to continued high commodity prices, higher income tax take and lower welfare payments from having more people in work, and improved company profits. Dr Chalmers says the resources sector’s contribution to that revenue base is critical. When the West is at its best, so, too, is Australia, he says. “The Prime Minister’s regular engagement with WA, my presence here today, the central role played by WA ministers and members and senators in our Cabinet and caucus — is less about politics and more about your economic significance,” he says. “We simply won’t grab the big chances of the defining decade ahead without WA’s economy firing and contributing.” To that end, Dr Chalmers says the Federal Government wants to help WA replicate its current success as the nation moves to a net zero economy. And he defends the changes to taxes on offshore gas developments — expected to net an extra $2.4 billion — as “designed not to deter investment, diminish supply, or interfere with our key trading relationships” and worked through in a co-operative way with industry. “WA has the minerals and rare earths that go into solar panels, batteries — all the technology that we need for electrification,” he says. “To successfully get to net zero, to build new sources of growth at the intersection between industry, energy, and people and to take our place in the new developing supply chains of the low-carbon world we’ll need you and the wealth-creating, opportunity-generating industries that call this State home.” The Government will announce on Thursday $50 million in grants to kickstart critical minerals projects, including more than $29 million for seven ventures in WA. Resources Minister Madeleine King says the grants will support the Government’s critical minerals strategy and help Australia become “a clean-energy superpower”.