Gambling taxes should be counted in the Commonwealth Grants Commission's calculation of the States' own-source revenues for the purposes of the GST carve-up, shadow parliamentary secretary for WA Alannah MacTiernan says.
Ms MacTiernan says such a measure could be directed by the Federal Treasurer Joe Hockey, avoiding the need for politically difficult agreement between the States, and boost the amount of GST that comes back to WA in the process.
NSW collected $1.8 billion in gambling taxes, Victoria collected $1.7 billion and Queensland collected $950 million annually, according to the Grants Commission's 2012 GST review.
WA collected just $191 million, mostly as a consequence of the State's refusal to allow electronic gaming machines except at Crown Perth.
By comparison, WA collected $4.2 billion out of $8.6 billion of mining royalties collected nationally in 2010-11 - a figure that would have increased rapidly in the past four years as Pilbara miners spent billions of dollars on expansion.
The Grants Commission's equalisation process looks at the States' abilities to raise so-called own-source revenues. The profitability of WA's mining industry is the key to explaining why the State gets such a small share of the national GST pool, because the Grants Commission judges that WA has a greater capacity to raise revenue.
Gambling revenues are not included in the calculation because it is judged that all States have an equal capacity to raise gambling taxes.
Ms MacTiernan said WA should not be penalised for the long-standing bipartisan policy of limiting the growth of electronic gaming machines. She is suggesting that two-thirds of a State's gambling taxes go into the Grants Commission calculation.