GST Inequity

I cannot believe either the authors of the GST, or those who supported it at the ballot box ever anticipated the current situation, where one State only receiving 37% of their GST take. The GST was promoted as a State tax, one that offered the States a degree of financial autonomy, how that has changed. It was also supposed to replace a suite of other State taxes such as Stamp Duty, FID & BAD, we still have Stamp Duty and the Treasurer is calling for a return of FID.

Of course a crucial role of a tax system is to offer financial support to those who need it, funded by those who can afford it, but this is the role of Federal taxes such as income tax and company tax. The GST was designed for each State to fund important services to the community in that States, not for States to cross subsidies each other, especially when it results in the current proposal for WA to only receive 30% of our tax take.

The Federal Government has created a situation where some States are dependent on GST from other states. It is disingenuous for them to now step away from the problem and say it is up to the States to sort out the mess. I suspect the Feds are now trying to insulate themselves from the GST, so the can blame the States for any proposed increase to the 10% rate. Furthermore for the treasurer to say for WA to keep our current 37% portion of GST, the State needs to undertake micro economic reform really rubs salt into the wound.

This entry was posted in federal politics, Politics, Social equity and tagged . Bookmark the permalink.

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