Govt lobbies for 'fairer' GST handouts

Queensland eyes greater slice of GST after Prime Minister Julia Gillard announces review of revenue distribution

March 31, 2011

The Queensland Government says it will push for a fairer share of GST after Prime Minister Julia Gillard this week announced a review of revenue distribution.

Instead of states facing penalties for economic growth and rewards for economic performance, Gillard says the GST distribution process should encourage economic reform and better delivery of services.

This includes more efficient delivery of essential services like schools and hospitals.

Queensland Treasurer Andrew Fraser says over the past decade, states like Queensland and WA have seen billions of dollars worth of GST revenue stripped away because of the "superior performance" of their economies.

"Both states have been punished for our economic success, and any move to see that discontinued is welcome," Fraser says.

"The fact is that states that receive mining royalties are penalised far more harshly than the southern states that rely on transfers," he says.

"Currently, Victorians gets more out of Queensland's resources sector than Queenslanders do."

Gillard says there are a number of changes that could be investigated, and admits that under current arrangements there is not enough incentive for reform, a need for more certainty and predictability, and the potential for greater simplicity.

"Under any changes that might be considered by the Government, we will ensure that the smaller States continue to receive a fair share of GST revenue, and that States with larger economies are not unfairly penalised for success," she says in a statement.

The Federal Government has appointed Nick Greiner, John Brumby and Bruce Carter to conduct the review.

The Review will be advised by a Heads of Treasuries Committee comprising representatives from all States and Territories, and will seek submissions from the public.

The Government says the Review will provide an interim report to the Treasurer by February 2012 and a final report by September 2012.

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