They appear to have short memories in Western Australia, and memory lapses are not lacking in Canberra either.
Nanjing Night Net

Peter Gutwein

The latest rumblings about increasing Western Australia’s GSTshare are a case in point.

WA has had a tough deal on GST receipts in recent years, largely but not totally due to the rivers of cash whichflowed into the state from the mining boom.

States which did not do so enormously well out of the miningboom -including Tasmania – did far better on GST thanks to a concept called horizontal fiscal equalisation.

That is a concept aimed at allowing the states to provide similar levels of services.

It’s a bitlike federalism’s version of theAFL draft.

Under the current system, if a state is doing relatively poorly, it gets more from the GST than it otherwise would.

WAnever used to bang on about “mendicant states” when it was one itself.

As Tasmanian Treasurer Peter Gutwein said last year: “If we tinker with the system once, then every yearGST allocations will be based not on fairness and equity, but on politics and polls.”

“It’s also important to set the record straight on how well Western Australia has done when it comes to their share of the GST.

“During the initial stages of the mining boom, Western Australia benefitted from the GST distribution system.

“The surge in mining royalties filled Western Australia’s coffers, yet had a delayed impact on its GST revenue.

“The Commonwealth Grants Commission estimates that the Western Australian windfall was in excess of $7 billion;a windfall that came directly out of the pockets of the other states.

“Even the Western Australian government’s own reports show that its share of the GST will rise significantly from 2016-17 onwards.”

The system will rebalance towards stronger relative GST receipts for WA anyway, regardless of any tinkering conjured up between the federal government and WA.

There is a lag, but the system works pretty well.

Incidentally, changes cannot proceed if the states do not agree.

Fat chance of agreement.

The WA government should have made a better job of managing the rivers of money when they were flowing so strongly.

This story Administrator ready to work first appeared on Nanjing Night Net.