WA taxpayers are propping up the country to the tune of nearly $40 billion each year

West Australian

6 days ago

New figures revealing WA's huge contribution to the national Budget should boost the State's campaign to shore up its share of the GST, ahead of a major review next year.
Treasury analysis compared taxes paid by WA workers and businesses with Federal Government spending in WA — finding a whopping gap of $39 billion.
That's an extraordinary $13,300 per person, according to fresh figures buried deep in Thursday's State Budget papers.
And the figure has been increasing rapidly, doubling over just five years.
The numbers — which also factor in the GST redistribution — demonstrate WA is punching well above its weight, propping up Federal Treasurer Jim Chalmers' national Budget and contributing more in net terms than any other State.
Almost every other State effectively relies on WA taxpayers to help fund their services.
'Our contribution to the nation's finances and economy goes well beyond the GST,' Chamber of Commerce and Industry WA chief economist Aaron Morey said.
'This (data) accounts for corporate tax receipts in particular that are flowing into the Federal coffers. It's a reminder that in terms of the Federal financial relationship — the Commonwealth and States — it is a much bigger issue than just the GST.'
Revelations of tax gap come as WA Treasurer Rita Saffioti, pictured, braces for an onslaught of east coast politicians keen to get their hands on more GST cash from the west.
A 2018 deal set a floor on WA's share of the GST distribution but the policy is up for review by the Productivity Commission next year.
Even with that backstop in place, Treasury reckons about $2.9b a year is redistributed through the GST.
But a further $26.7b — nearly 10 times more — is taken through company tax and spent interstate.
Ms Saffioti called on the Productivity Commission to 'take this broader data into account as part of their review next year'.
'The Federal Budget takes the lion's share of the wealth created in this State,' she said, pointing to the Treasury analysis showing $39b more goes from WA to the Commonwealth Budget than is returned to the State.
'If you don't support a successful WA, the whole nation is penalised.'
NSW Treasurer Daniel Mookhey last week reportedly moved to reignite the fight over the GST deal, claiming the agreement was 'ridiculous'. That's despite NSW receiving about $377 more per person than WA under the latest round of funding.
Mr Morey said the Federal Government should be considering the tax imbalance when making spending decisions.
'WA is absolutely within its rights, and standing on very solid ground, when it makes the case that we over-contribute on the revenue side and don't get a fair share when it comes to distribution,' he said.