The Chamber of Commerce and Industry WA welcomes Federal Opposition Leader Bill Shorten’s $1.6 billion commitment to WA if Labor wins the next federal election but says more needs to be done to fix the GST over the long term.
Addressing the party’s state conference on the weekend Shorten pledged to create a $1.6 billion infrastructure fund to partially offset WA’s lost GST revenue.
However, he made no commitment to alter the formula used to distribute the GST.
Currently WA receives 34.4 cents from every dollar it raises in GST and the issue could decide the government at the next federal election.
Recent polling commissioned by CCI revealed 12 per cent of WA voters would switch their vote to the Australian Labor Party if it announces a significant GST reform policy, which delivers a greater share to WA.
CCI Chief Economist Rick Newnham says Shorten’s announcement is a positive first step towards encouraging bipartisan support for GST reform.
“Mr Shorten has demonstrated his party’s commitment to Western Australia’s economic welfare during a difficult economic transition by promising $1.6 billion in a GST top-up for infrastructure funding,” he says.
“The GST distribution is broken and we are calling on the Turnbull Government to now match Bill Shorten’s infrastructure commitment along with a ratcheting GST floor.
“A ratcheting GST floor is crucial to ensure WA’s GST share cannot fall to such shockingly low levels again in the future.
“WA is a hard-working state that has been the engine room of the national economy for decades and the establishment of a ratcheting GST floor reaching 70 cents will ensure it continues to pay large dividends to the nation well into the future.”
CCI has relentlessly lobbied for GST reform to bolster WA’s economy and Newnham says the pressure is now on the Turnbull Government to act or face a wipe out at the next election.
“Malcolm Turnbull now has a prime opportunity to fix WA’s GST share once and for all by matching Bill Shorten’s proposal and committing to a ratcheting floor for future years,” he says.
“Western Australians shouldn’t have to wait until the next federal election for a greater share of the GST the Turnbull Government has the ability to reform the system now and make it more equitable for all Australians.”
The Productivity Commission is currently reviewing the GST formula and will present their findings in January 2018.
CCI’s submission to the review demonstrated the current formula is hindering national economic growth by removing incentives for states to develop their economies through sectors like mining and resources.
►As WA’s peak business advocate, CCI works to elevate the concerns of WA industry to key nationwide decision-makers. Find out more about our advocacy efforts.