Hodgman, Nikolic slam claim of GST scandal

TASMANIAN Liberals have attacked federal colleague and Defence Minister David Johnston for describing the state’s inflated share of GST revenue as a ‘‘scandal’’.

Premier Will Hodgman

Premier Will Hodgman

Bass Liberal MHR Andrew Nikolic asked why was it not a scandal when Senator Johnston’s home state, Western Australia, was in Tasmania’s shoes and subsidised by other states.

Senator Johnston reportedly told delegates at a West Australian Liberal Party conference that he was outraged the state’s ‘‘hard-earned dollars’’ were going to other states.

‘‘The outrage of the numbers and the destination of our hard-earned revenue to other states and territories is a scandal that only we really understand and are prepared to fight for,’’ he told the conference.

Despite the Abbott government ruling out changes to the way the $50 billion in GST raised each year is distributed between the states, WA Premier Colin Barnett also complained that his state lost $3.7billion in GST each year, including $500 million to Tasmania, $750 million  to South Australia, $600 million to Queensland and $140 million to the ACT.

Mr Nikolic said he would fight any move to change the formula.

‘‘Western Australia is a signatory to the Intergovernmental Agreement on GST, which requires all states to agree to any change,’’ Mr Nikolic said.

‘‘Until 2007, Western Australia was a net GST recipient state under the same principle that some now dismiss as ‘scandalous and outrageous’.’’

Premier Will Hodgman described the stoush as a ‘‘minor irritation’’.

He said when other states’ economies were starting to suffer they looked to blame Tasmania.

‘‘I won’t buy it. In the past Western Australia has been a beneficiary of the GST, now when things get tough they start to look for excuses and blame us,’’ Mr Hodgman said.

Tasmania’s share of GST is usually set at 3.6 per cent, despite our population share being about 2.2 per cent. For every dollar of GST distributed to the states and territories, Tasmania receives $1.63, but Western Australia receives only 37¢ in the dollar, mainly because of its mineral riches.

WA wants the formula changed to a straight population share, which would cost Tasmania $700 million a year in GST revenue.


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