Tasmania’s Labor and Liberal politicians have called on Treasurer Scott Morrison to ensure Tasmania does not lose revenue following a review into the GST.
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On Sunday Mr Morrison ordered a major review of the way GST revenue is carved up among the states.
But the Treasurer’s review has drawn criticism from his own side, with Tasmania’s Liberal Senators urging Mr Morrison to ensure the state’s GST revenue would not be lowered.
The decision to analyse the dispersion of GST comes as Western Australia’s federal representatives claim their state is being disadvantaged by the system.
But the Tasmanian Liberal Senators said there should be no change to GST distribution if it lowered revenue for this state.
"The system of horizontal fiscal equalisation (HFE), used for GST distribution, has worked well since it was introduced and, at times, all states have been net beneficiaries under the HFE system,” Senator Jonathon Duniam said.
“It is important to remember that there have been times where Western Australia has received more than it was giving.
"The announced review could only serve a useful purpose to the extent that it identifies opportunities to refine the system, to better ensure it reinforces incentives for all states and territories to make sensible, sustainable economic decisions.”
Senator David Bushby said a review “must not be used to alter the system simply because one state is unhappy”.
Their opposition to any reduction in GST funding to Tasmania was echoed by Labor Member for Bass, Ross Hart.
Mr Hart was concerned “about the potential” for Tasmania to lose out in any GST review.
“It is a threat to all Tasmanians,” he declared.
“Scott Morrison has given no assurance that Tasmania’s share of the existing GST revenue arrangements is safe.
“This is vitally important to our schools and public hospitals, as health and education is seen as a priority to all Tasmanians, and particularly in Bass.”
Mr Hart said any “loss, rearrangement or reconfiguration” of the GST allocation would “have a devastating impact on our state budget, and on the economy”.
“This is preparation for changes to distribution to GST revenue, and this state and Northern Tasmania would be particularly hard hit by any changes to the distribution of that revenue,” he said.
Mr Hart said the health and education system would be affected by the lowering of the GST share.
The Productivity Commission is due to report to the government by January.
A review by Julia Gillard in 2012 recommended no changes to the GST system.
