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Perth Now
13 hours ago
- Business
- Perth Now
‘Un-Australian': GST change set to cost $60bn
The 'worst policy change in the 21st' century is set to blow out the national budget by $60bn and keep one state in the black for years to come. The goods and services tax (GST) carve up was back in focus this week as state treasurers came out with their budgets. Queensland, NSW, Western Australia, and the ACT all delivered budgets, with one state standing above them all. Mining-rich WA is in the black, with costs tipped to come in at $2.5bn less than predicted spending. The rest, budget deficits. Western Australia has cashed in on changing GST rules. NewsWire / Nicholas Eagar Credit: NewsWire WA Treasurer Rita Saffioti used her speech to focus on the relative strength of the economy compared with other states while warning of an uncertain global outlook. 'This budget is about fortifying WA amid global shocks,' she said. Independent economist Saul Eslake argues that WA has achieved a surplus for the last seven years on the back of soaring GST revenue. 'Between 2016 and 2025, Western Australia essentially had the country by the shorts and they squeezed as hard as they could,' Mr Eslake told NewsWire. 'I call it the worst public policy decision of the 21st century.' So what changed for the WA government to achieve seven years of surplus. WHY IS WA THE LUCKY STATE? Much of WA's success comes back to two changes. The first was a change to the GST in 2018, with Mr Eslake arguing that the then Liberal federal government wanted to appease WA where it held an overwhelming majority of federal seats. Then treasurer Scott Morrison announced a review of Australia's horizontal fiscal equalisation (HFE) system, which determines the distribution of goods and services tax (GST) revenue among states and territories. Then treasurer Scott Morrison enacted the GST reforms. NewsWire / Martin Ollman Credit: News Corp Australia After a Productivity Commission inquiry, the system changed so that all states and territories received 70c for every dollar of GST raised in 2022-23. That figure increased to 75c a dollar in the new agreement, WA's GST share was 30 cents in the dollar. High iron ore prices at the time could have meant WA got just 15.6 cents of every dollar of GST raised. 'So what Morrison did was commission the Productivity Commission to do an inquiry into horizontal fiscal equalisation,' Mr Eslake said. 'The terms of reference for that were written in Mathias Cormann's office. It was a classic example of (fictional TV character) Sir Humphrey Appleby's advice that you never call an inquiry unless you know what it's going to say.' HFE's aim is to ensure that every state and territory should have an equal opportunity to provide public services. The key word is should, as states and territories are free to raise additional revenues how they please as well as fund their own state-based services. 'That principle is they are equalising the fiscal capacity of the states and territories,' Mr Eslake continued. 'And the point of that, it matters far less where you live when it comes to the quality of schooling your kids get, the quality of healthcare that you and your family get, the quality of policy or environment you get.' The price of iron ore stayed high. Rebecca Le May Credit: NCA NewsWire Mr Eslake used the example of the US, which does not have HFE, meaning different states have varying life outcomes. 'If we didn't have it, then Victorians and NSW people would have much better public services and pay lower taxes, all else being equal, than Tasmanians or South Australians,' Mr Eslake said. 'And I would argue, and traditionally most Australians have accepted, that's something that makes Australia a better and fairer place than America in particular.' The second major change for WA was the rise of China, or as Paul Keating famously said, the state got 'kissed on the a*se by a big Chinese rainbow'. This kissing, Mr Eslake argues, turned WA from being propped up into a donor state. '(In the early 2000s) WA got a bigger share of whatever federal grants were going around than they would have got if it was distributed equal per capita,' he said. 'Because the (Commonwealth) Grants Commission recognised that when gold was fixed at $35 an ounce, and iron ore was only trading at $20 a tonne and they weren't selling much of it, they couldn't raise much money for mineral oil fees, but they had a relatively high cost of providing services.' NSW used its budget to call out WA's share of GST. NewsWire/ Gaye Gerard Credit: News Corp Australia BUDGET BOTTOM LINE To get other states to support these changes, a no one is worse off provision was added, with the federal government topping up any shortfalls in GST revenues. This policy was also extended until 2029-2030 under the Albanese government. This NOWO provision turns a $9bn budget blow into a $60bn black hole. 'This is the biggest blowout in the cost of any single policy decision ever with the possible exception of the NDIS, which as (economist) Chris Richardson says is at least set up for a noble purpose,' Mr Eslake said. 'It's what is allowing Western Australia to run a budget surplus while everyone else, including the feds, are running a deficit. 'In the longer run, what it will mean is residents of Australia's richest state, WA, will have better public services and lower taxes than people who live in the eastern states, which I say is un-Australian.'
Economic Times
25-04-2025
- Business
- Economic Times
Hero Future Energies appoints 4 I-bankers for Rs 5,000-crore IPO
Around 43% of the power offtake from its operational plants are through contracts with Solar Energy Corporation of India (SECI). HFE has scaled up its IPO fundraising ambition to ₹5,000 crore after initial positive feedback from ESG investors. Backed by KKR and IFC, HFE has appointed JM Financial, Axis, Nomura and Bank of America, said multiple people aware of the development. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai | New Delhi: KKR-backed Hero Future Energies (HFE), the Munjal family promoted green energy producer, has mandated four investment bankers , including Bank of America and Nomura for its proposed IPO, while the Hero MotoCorp-backed Ather Energy prepares to open its initial share sales has scaled up its IPO fundraising ambition to ₹5,000 crore after initial positive feedback from ESG investors. Backed by KKR and IFC, HFE has appointed JM Financial , Axis, Nomura and Bank of America, said multiple people aware of the had earlier planned a ₹3,000 crore fund raise. ET first reported in Future's 5.2 gigawatt of renewable power generation assets are largely concentrated in India, but it has expanded to the UK, Ukraine, Singapore, Vietnam and Hero Motocorp owns about 40% stake in Ather Future Energies' external shareholders KKR and International Finance Corp (IFC) could trim some of their stakes in the share offering. Hero's Munjal family are the controlling shareholders of the sent to HFE did not elicit any response until the publication of this would invest $20 billion in renewable energy generation by 2030, Reuters had reported last year, quoting Rahul Munjal. This would include solar and wind projects and battery storage, he told the news subsidiaries of HFE include Hero Wind Energy, Hero Solar Energy and Hero Rooftop Energy. The operational portfolio comprised wind capacity of over 583 MW across Rajasthan, Maharashtra, Tamil Nadu, Karnataka, Madhya Pradesh, and Andhra Pradesh; solar capacity of over 1576 MW across MP, Telangana, AP, Karnataka and operational portfolio has long-term power purchase agreements with distribution companies in Rajasthan, Karnataka, MP, AP, Maharashtra, several private industrial and commercial customers, and Solar Energy Corporation of India (SECI). Diversification of assets in terms of location and presence of strong counterparties reduces the associated credit risk, said a recent report by 43% of the power offtake from its operational plants are through contracts with Solar Energy Corporation of India (SECI). The remainder of the power is sold through direct agreements with distribution companies in the states and also to captive customers, such as the Hero made its debut fundraise in 2017 from IFC- which invested $125 million. Subsequently in 2022, KKR and the Munjal family collectively infused $450 million into the company. The Hero Group forayed into renewable energy generation in 2012.
Time of India
25-04-2025
- Business
- Time of India
Hero Future Energies appoints 4 I-bankers for Rs 5,000-crore IPO
Mumbai | New Delhi: KKR-backed Hero Future Energies (HFE), the Munjal family promoted green energy producer, has mandated four investment bankers , including Bank of America and Nomura for its proposed IPO, while the Hero MotoCorp-backed Ather Energy prepares to open its initial share sales Monday. HFE has scaled up its IPO fundraising ambition to ₹5,000 crore after initial positive feedback from ESG investors. Backed by KKR and IFC, HFE has appointed JM Financial , Axis, Nomura and Bank of America, said multiple people aware of the development. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo HFE had earlier planned a ₹3,000 crore fund raise. ET first reported in January. Hero Future's 5.2 gigawatt of renewable power generation assets are largely concentrated in India, but it has expanded to the UK, Ukraine, Singapore, Vietnam and Bangladesh. Separately, Hero Motocorp owns about 40% stake in Ather Energy. Live Events Agencies Hero Future Energies' external shareholders KKR and International Finance Corp (IFC) could trim some of their stakes in the share offering. Hero's Munjal family are the controlling shareholders of the company. Mails sent to HFE did not elicit any response until the publication of this report. HFE would invest $20 billion in renewable energy generation by 2030, Reuters had reported last year, quoting Rahul Munjal. This would include solar and wind projects and battery storage, he told the news agency. The subsidiaries of HFE include Hero Wind Energy, Hero Solar Energy and Hero Rooftop Energy. The operational portfolio comprised wind capacity of over 583 MW across Rajasthan, Maharashtra, Tamil Nadu, Karnataka, Madhya Pradesh, and Andhra Pradesh; solar capacity of over 1576 MW across MP, Telangana, AP, Karnataka and Rajasthan. The operational portfolio has long-term power purchase agreements with distribution companies in Rajasthan, Karnataka, MP, AP, Maharashtra, several private industrial and commercial customers, and Solar Energy Corporation of India (SECI). Diversification of assets in terms of location and presence of strong counterparties reduces the associated credit risk, said a recent report by Crisil. Around 43% of the power offtake from its operational plants are through contracts with Solar Energy Corporation of India (SECI). The remainder of the power is sold through direct agreements with distribution companies in the states and also to captive customers, such as the Hero Group. HFE made its debut fundraise in 2017 from IFC- which invested $125 million. Subsequently in 2022, KKR and the Munjal family collectively infused $450 million into the company. The Hero Group forayed into renewable energy generation in 2012.
