The fight over WA's GST has been re-ignited

The fight over WA's GST deal has been re-ignited by two economists, who want the arrangement scrapped.

Transcript

00:00 It's a battle as old as the GST itself.

00:04 We think there's a huge anomaly with a state like Queensland getting extra out of the process

00:10 compared to Western Australia.

00:11 This is the usual pantomime we get when we come to Canberra.

00:15 Western Australia whinge about the GST and we're all meant to jump up and down.

00:20 The debate reignited by two high profile economists who estimate the overall bill to the Commonwealth

00:25 for a deal with WA will grow to $50 billion over a decade, $11 billion more than the government's

00:31 estimate.

00:32 The money makes sure no state is left worse off by WA being guaranteed a return of at

00:37 least 70 cents for every dollar it collects.

00:40 Higher than expected iron ore prices have contributed to the blowout.

00:44 We're investing in energy transformation, in water supply, in transport, in ports.

00:50 We need those finances to help grow the economy and create job opportunities.

00:55 This deal that was originally struck was a sort of short term political fix and it was

01:00 never expected to blow out the way it has.

01:03 So the change in economic circumstances is the big reason why this formula needs to be

01:08 revisited.

01:10 If that does happen, the Treasurer told a business breakfast she's confident WA wouldn't

01:14 be disadvantaged.

01:15 Politically, it would just not work.

01:18 So they would basically, I think, lose every seat in Western Australia.

01:22 So there's just no way.

01:23 The opposition isn't convinced, latching on to the PM's backflip on stage 3 tax cuts.

01:29 We need an assurance in writing, given trust has gone out the door.

01:32 Earlier this month, the Prime Minister wrote to me confirming the decisions of the National

01:38 Cabinet and reiterating his support for the current arrangements.

01:42 WA's strong surpluses make the deal hard to defend, especially when other states aren't

01:47 doing as well.

01:48 It's something WA will have to argue when the Productivity Commission reviews the arrangement

01:53 in just over two years time.

01:55 [BLANK_AUDIO]