WA gets nice GST surprise
The Barnett Government will get up to an extra $500 million in GST that will help bolster the State's bottom line.
The West Australian can reveal a better-than-expected proportion of a growing pool of GST cash will come back to WA.
The Commonwealth Grants Commission has decided that WA will get 37.6c for every GST dollar raised in the State in the 2014-15 financial year.
When Treasurer Troy Buswell handed down the State Budget in August last year, WA was forecast to get just 27c in the dollar.
The windfall is partly because of a change, directed by Federal Treasurer Joe Hockey, in the treatment of iron ore fines.
However, other parts of the country have started enjoying faster economic growth than WA, and that has also slowed the rate at which the State loses its share of GST.
Retail sales figures out yesterday showed zero growth for WA outlets through the vital Christmas and New Year period. And while exports of iron ore are growing in line with expectations, there has been a fall in mineral prices which will hit the Budget.
Treasurer Joe Hockey revealed this week that the Federal Budget's forecasts for the price of iron ore were higher than those being obtained at present.
Iron ore slipped to $US116.10 a tonne yesterday, its lowest price since the middle of last year. This time last year iron ore was selling at $US132 a tonne.
The improvement in WA's share would eradicate the $124 million Budget deficit that Mr Buswell forecast in the mid-year Budget update released in December.
It also takes pressure off the Government to find more Budget savings.
Premier Colin Barnett, who is acting Treasurer in Mr Buswell's absence, said the State's dwindling share of the GST was the Budget's biggest issue.
"That will still happen next year," Mr Barnett said. "Not quite as bad as we thought but still pretty damn bad."
Despite the higher-than-expected share, WA will still lose ground to the rest of the nation.
This year the State got almost 45¢ for every dollar of GST.
WA's extra cash will come at the expense of the other States and Territories.
Despite the windfall, WA's share of GST has crashed over the past five years. In 2009-10, the State got 78¢ for every GST dollar raised within WA.
In that year the State got $3.6 billion in GST revenue.
