WA's GST raided to help pay for Queensland floods

WA will lose more than $400 million from its share of the GST next financial year to prop up flood-ravaged Queensland.

In another blow to the State Government's bottom line, the Commonwealth Grants Commission's review of GST payments is understood to back the deep cut to WA's share.

But the move will increase pressure on the Federal Government and States to overhaul the way the $50 billion in GST is carved up.

_The West Australian _can reveal that for every $1 of GST from WA, it will get less than 60¢ back under the commission's formula for next financial year.

This year it gets 72¢ in the dollar, a surprise increase on the previous year.

It is understood the sharp fall is solely because of the natural disasters in Queensland last year.

Coal mines across the State were flooded and some are not yet dry, which has caused the Queensland Government's mining royalty revenue to crash.

The commission's GST formula relies on how much money the States can raise so Queensland will get extra cash from other States. Because WA's royalty income soared this financial year, it will lose the most.

The commission says the huge swing in Queensland is a "one-off" and suggests WA's big loss will be offset in the next two years.

Queensland's coal industry is expected to grow sharply through major projects due to begin production in coming years.

Treasurer Christian Porter anticipated a fall in WA's 2012-13 GST share in last year's State Budget - but not to the level apparent in the commission's recommendations. Depending on how much WA loses, it could put Mr Porter's slated $305 million Budget surplus next financial year at risk.

The drop in revenue adds impetus for an overhaul of the way the grants commission shares out the GST.

An interim report on the system from a committee under former NSW premier Nick Greiner is due this month before a final report in September.

However, any changes it recommends to boost WA's revenue at the expense of dependent States such as Tasmania and South Australia are expected to be fiercely opposed.

WA also accounted for half the Australian jobs created since last July with growth in the resources sector countering job losses in finance and manufacturing in other States.

Australian Bureau of Statistics figures show WA businesses created 20,000 jobs last month as the national unemployment rate fell to 5.1 per cent. The State's monthly unemployment rate was steady at 4.2 per cent because though jobs were created, people came to the State looking for work.

Since July, the number of Australian jobs has risen 25,000.

WA had almost 24,000 more people in work while fellow resources giant Queensland added more than 26,000 positions.

Big job losses were in manufacturing areas - with Victoria shedding 19,500 - and in finance, with NSW employment down 2100.

A record number of WA men have full-time work at 603,000 and more WA women than ever - 555,000 - are in work.

Reserve Bank deputy governor Philip Lowe said the economy was going through high structural change with some industries expanding and others contracting.