Labor Split over Need for GST Reform as South Australian, Tasmanian Elections Loom

Labor has split over the need for GST reform, with the WA Government calling for “swift action” from Prime Minister Malcolm Turnbull as the Federal Opposition ramps up its campaign against change.

Sparking a brawl between the States ahead of the South Australian and Tasmanian elections, acting Opposition Leader Tanya Plibersek said the delay to the Productivity Commission’s GST review proved the Federal Government was planning cuts in other States.

“That’s because every State and Territory bar WA will lose, and lose big time, under the proposals in the draft report,” Ms Plibersek said yesterday.

“Malcolm Turnbull has a secret plan to take money away from every other State and Territory and give it to Western Australia.”

WA Acting Premier Roger Cook said it was “disappointing” the GST issue was being “dragged through at least two election campaigns”.

“WA expects swift action from the Federal Government,” he said. “Western Australians won’t cop this issue being ignored any longer.

“So far we haven’t seen a solution from the Federal Government. Action is required, not unnecessary delays for political purposes.”

SA Premier Jay Weatherill, who faces voters on March 17, hit out at WA’s GST grievances, saying there were no problems with the horizontal fiscal equalisation system and called on the Federal Government to “abandon this reform”.

This year, SA will receive a $1.44 GST relativity payment and Tasmania will receive $1.80 compared with 34¢ in the dollar for WA.

Mr Weatherill said the Productivity Commission had acknowledged the GST system had served the country well, despite WA’s share falling to just 30¢ in the dollar.

“We don’t support the analysis that somehow there’s a problem with the system,” Mr Weatherill said.

“Poor old WA got themselves into trouble and somehow we should remedy that?

Well, it’s not an adequate or intellectually rigorous chain of reason.”

Labor’s decision to stoke the campaign over the GST carve-up comes after Federal Treasurer Scott Morrison announced last week that the Government had extended the Productivity Commission’s deadline to May 15, after the two State elections and a week after the Federal Budget.

Rather than rejigging the GST formula, the Federal Opposition has committed to a $1.6 billion infrastructure top-up fund that would lift WA’s share to an equivalent of 70¢ in the GST dollar. Liberal MP Ben Morton said there was now “no doubt” that Labor did not support changing the distribution of the GST.

“It will be galling for all West Australians to see Tanya Plibersek this week running around the country boasting about how Labor would dud WA out of this solution if they were elected,” he said.

Labor MP for Fremantle Josh Wilson said, “no one can argue that 34¢ is fair or reasonable”.

He criticised the “paralysis” from the Government on the reform process.