Brumby GST revamp would give more to WA
Brumby GST revamp would give more to WA

WA's share of GST revenue would double under a proposal put forward by the co-chairman of a review that previously recommended no change to how the tax is spread among the States.

Former Victorian premier John Brumby now says a revamp of how the GST is distributed should be part of any move to increase the rate or broaden the base of the consumption tax.

Mr Brumby told _The West Australian _that if the revenue collected by the tax increased, the allocation should largely move to a per-capita model but with poorer States guaranteed top-up payments.

"The beauty of the discussion that has now been kicked off by the GST is that it would be a mechanism for improving and reforming the allocation of those funds to the States," he said.

The States were in line to share $57 billion in GST revenue next financial year but if the rate was lifted to 15 per cent it would raise an extra $25 billion.

One option Mr Brumby felt had the most merit was setting aside the $3 billion to $4 billion a year used to subsidise South Australia, Tasmania and the Northern Territory (forecast to rise to $4.4 billion in 2014-15) and then distributing the balance to the States on a per-capita basis.

The handout for mendicant States would be indexed every year so they did not fall behind in real dollar terms, and reviewed every five to 10 years.

"That's probably cleaner . . . it gets you away from the administration of the Grants Commission," Mr Brumby said.

_The West Australian _has calculated this method would reap WA about $7.8 billion in GST next financial year, or 9.5 per cent of an expanded $82 billion pot of revenue, based on the latest Treasury figures. This compares with the $2.2 billion - or 4.2 per cent share - WA will get in 2014-15 under existing arrangements.

"The key point is and people have to recognise this: you can't just wish this problem away," Mr Brumby said.

"If you look at Tasmania in particular, to pretend they don't have needs is not realistic."

The West Australian

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