The Chamber of Commerce and Industry WA (CCI) has today welcomed the Federal Government’s landmark proposal for GST reform in the national interest.

CCI Chief Economist Rick Newnham said these reforms transcend the zero-sum game of GST reform, ensuring that every state and territory receives a greater amount of GST while structurally improving the system.

“CCI’s principles for any proposed change to the GST system are that it must be fair for all states, it must be pro-growth and it must be durable over the long-term. This proposal ticks all three boxes,” Mr Newnham said.

“Although the Federal Government has not adopted the ambitious model of equalising to the average, as recommended by the Productivity Commission and proposed by CCI, the Federal Government’s approach meets the national interest test for change.

“When the GST was introduced it was never envisaged that the system would ever come under so much strain – the new system protects against these extreme outcomes in the GST formula.

“These reforms ensure that no state is left behind but every state can do more to get ahead. The GST floor will ensure that states which forge ahead to develop their own economy are not punished with less GST as a result of their success.”

We know that most Australians support a change to the GST distribution if it is in the national interest.

According to exclusive national polling of 2,350 Australians commissioned by CCI, 70 per cent of Australians believe that WA’s GST share fell to an unacceptable level – below 35 cents – and most Australians (52%) believe that if it is in the national interest to change the GST distribution it should be changed.

“The poll also revealed that fixing the GST was the most important issue to West Australians, second only to cost of living,” Mr Newnham said.

“CCI’s focus on national interest has transformed the debate from ‘poor WA’ to one that ensures every Australian stands to benefit which has carried this reform over the line. If adopted, these reforms would represent one of the most significant policy achievements in CCI’s 130-year history. 

“CCI urges Opposition Leader Bill Shorten and each state Premier to back the Federal Government’s proposed model given that every Australian now stands to benefit.”