Tasmanian Liberal Senators should withhold support for federal government legislation until they are given a “written guarantee” the state’s share of the GST will not be reduced.
That is according to Braddon Labor MHR Justine Keay.
On Monday, the Productivity Commission published a draft report on horizontal fiscal equalisation, the system under which GST dollars are divided between the states and territories.
It came in the wake of Western Australia’s claim that it was losing out as a result of the current equalisation system, which was designed to ensure that all states and territories got their fair share.
Changes to the way GST money is distributed throughout Australia could see Tasmania lose up to $1 billion over four years.
But the commission appeared to lean towards equalising to the second-richest state in the country (New South Wales) rather than the first-richest (WA), in which case Tasmania would lose $77 million per year.
The final report on horizontal fiscal equalisation is due in January 2018, following a consultation period.
Ms Keay said Tasmania’s Liberal senators needed to get “serious about standing up for Tasmania”.
“They should withhold their support for any government legislation until they have obtained a written guarantee from the Prime Minister that Tasmania will not be worse off,” she said.
Tasmanian Liberal Senator Eric Abetz said he and his team had “stood up” to their own party over GST revenues.
“I wrote to the Prime Minister over Tasmania's GST share in August last year and I've also more recently raised my concerns directly in the party room and directly with ministers,” Senator Abetz said.
He said Tasmania’s Labor MPs had “not made a peep” about the federal Opposition Leader’s GST policy.
“Bill Shorten promises more for WA yet claims no one will be worse off,” Senator Abetz said.
Tasmanian Liberal Senator Jonathon Duniam said the state’s Liberal senators would “not allow” any changes to the GST that could disadvantage Tasmania.