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GST top-up: Why we are $434 million richer

Joe SpagnoloThe West Australian
VideoWATCH: Speaking at Seven West's Leadership Matters breakfast, Prime Minister Scott Morrison was full of praise for WA's efforts to receive a fairer GST share.

The McGowan Government is $434 million richer, with the first promised Commonwealth Government’s GST “top-up” payment hitting WA coffers this week.

Federal Finance Minister Mathias Cormann confirmed the deposit yesterday, saying the $434m payment was made on April 23.

It was part of a $1.24 billion Commonwealth GST payment to WA in 2019-20.

The remaining $814m would be paid to WA by the end of August.

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Senator Cormann said in total it was expected that over the next three financial years WA would receive $4.5b in additional GST top-up payments as part of a new deal passed by the Federal Parliament last November.

The payments would ensure WA would not receive less than 70 cents in the dollar in GST receipts — climbing to 75 cents by 2024-25.

“When we initially announced our GST reforms, it was expected that WA would receive an additional $4.7b over the next eight years,” Senator Cormann said.

“As a result of our reforms working precisely as intended, WA is already on track for $4.5b in additional GST payments over just the next three years.

“This is money which WA would have missed out on if it wasn’t for Scott Morrison’s determination to deliver a better fairer deal for WA.

“This is about future proofing our great State of Western Australia, ensuring that our State is on a solid and sustainable fiscal foundation for the future.”

The better-than-expected GST payments — plus surging iron ore revenues — put further pressure on the McGowan Government to ease up on cost of living charges in its May 9 State Budget.

Surpluses are expected be announced for the current and next financial years.

Still, the State Government is expected to announce electricity hikes of about 2 per cent from July 1 on top of 18 per cent hikes since Mr McGowan won power in 2017.

Federal Attorney-General Christian Porter, a former WA treasurer, says the McGowan Government should freeze all government charges.

But Mr McGowan and Treasurer Ben Wyatt are refusing to yield.

WA’s new-found wealth has already resulted in community and business groups calling for more relief, come July 1.

Yesterday, the WA Chamber of Commerce and Industry called for the “State Government’s tax on jobs” — payroll tax — to be cut.

Patterson Research Group polling of 815 West Australians across the State was commissioned by the CCI.

It revealed 73 per cent of those polled believed the State Government “should prioritise reducing its tax on jobs in the upcoming Budget to help create jobs”.

“WA has the highest payroll tax burden of any State government and the second highest unemployment rate,” CCI chief economist Rick Newnham said yesterday.

“It is more expensive to create a job in WA than any other State because of this tax.”

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