The Queensland Government has directed the Queensland Productivity Commission to undertake a comprehensive review of the economic impacts of the current GST distribution system.
The Federal Government’s decision to strip a record $2.3 billion in GST revenue from Queensland taxpayers this financial year, and $5.3 billion over the next three, has compounded the significant challenges left by the former Labor Government after a decade of fiscal vandalism, the Queensland Government said in a statement.
The Queensland Productivity Commission review will assess the economic impact of GST distribution including on the Queensland economy and state’s capacity to deliver services to support growth and social outcomes, as well as economic outcomes for Queensland relative to other states and territories, including capital and labour mobility, it stated.
Over the past decade, Queensland’s GST revenue has grown by only 28%, while GST revenue received by NSW, Victoria and Western Australia has grown by 58%, 118% and 317% respectively over the same period.
If Queensland’s GST revenue had grown in line with national GST payments it would this year have been worth $22.7 billion – $6.1 billion higher than reality – and helped repair a decade of the former Labor Government’s financial mismanagement, said Treasurer, David Janetzki.
The existing methodology used to calculate GST also penalises the State for developing its resources industry, while leaving Queensland to also foot the bill for the policy failures of NSW and Victoria during COVID-19, he said.
“Queenslanders are being short-changed, while other states benefit from billions in additional GST revenue,” Mr Janetzki said.
“It is clear the current system to calculate GST distribution is seriously flawed and the impact of Canberra’s record redistribution away from Queensland this year is more acute given the former Labor government’s decade of fiscal vandalism.
“At a time the Federal Government is buck passing on their responsibilities for Aged Care and the NDIS and heaping further pressure on state-run hospitals, with the other hand they are ripping away Queensland’s GST share, it’s not right.
“I have written to the Federal Treasurer Jim Chalmers on multiple occasions, requesting appropriate fiscal support to offset the negative impacts on Queensland.
“If Canberra won’t act, we will. I’ve instructed the QPC to undertake its own review of the economic impacts of Australia’s GST distribution system, particularly on Queensland.
“We’re simply asking that Queensland receives its fair share of GST so we can deliver a better lifestyle through a stronger economy.”
The current Federal Productivity Commission inquiry into the GST system, should have presented an opportunity to address these issues but the Terms of Reference would not facilitate the holistic view needed to drive national productivity and provide a truly fair distribution of revenue across states, the Government stated.
The QPC will report back with an interim report in February, before finalising its report in April.
