PM says he has taken on 'cause' of WA GST

Greg Roberts
The prime minister will investigate claims WA will miss out on an extra $2 billion in GST.
The prime minister will investigate claims WA will miss out on an extra $2 billion in GST.

Prime Minister Malcolm Turnbull says he has taken on "the cause" of getting Western Australia a fairer deal on GST amid new claims the state will lose another $1.9 billion of the national carve-up.

WA's population will be a significant 60,000 people fewer than expected this year based on Bureau of Statistics figures, which the state's treasury estimates will lead to $1.9 billion less in GST over four years.

The WA government made the claims during Mr Turnbull's visit to the state - his first in almost six months - with the rest of the cabinet.

"I haven't had any confirmation of that officially. I've seen the report but look forward to discussing it with my colleagues and West Australian colleagues," Mr Turnbull told reporters in Perth on Monday.

A smaller population reduces a state's need for funding under the Grants Commission's complicated formula.

It is supposed to equally share the nation's riches, but in WA's case has resulted in billions of dollars the state raised sent elsewhere at a time its economy has struggled, leaving it with by far the lowest share in the nation.

"I've taken this cause on on West Australians' behalf. I'm the first prime minister to acknowledge that Western Australia is not getting a fair deal out of the GST," Mr Turnbull said.

"It is very important that any changes to the GST are done in a way seen as being fair to all Australians."

He said he had made the case for GST reform to state and territory leaders around the COAG table.

The prime minister and federal treasurer could unilaterally change the system themselves but refuse to do so.

It is unclear when or if the system will be changed, with Mr Turnbull's suggestion of setting a GST floor that would keep WA and other states' share of GST at 70 to 80 cents in the dollar still years away.

There is pressure to act, with a Galaxy poll published over the weekend showing the federal coalition could lose four seats in WA and lose government.

A Productivity Commission inquiry is not due to report until next year.

WA Premier Mark McGowan is expected to meet with the prime minister this week and urged him to rule out the further GST fall, or else it would hit the state budget, which is already facing record debt and deficit.

"We can't take anymore. Our state budget can't take anymore," Mr McGowan said.

"If we lose another $2 billion, our share will go down to below where it is at catastrophic levels. It will be disastrous and catastrophic."