Queensland Premier Should be Wary of GST Karma

Senator Matt Canavan has recommended Queensland Premier Annastacia Palaszczuk consider Queensland's long-term interests when making comments about the GST.

“I know the GST is not Ms Palaszczuk’s favourite subject but she should put in more time to learn about it. At the moment, Ms Palaszczuk seems to get basic facts wrong about the GST,” Senator Canavan said today.

“For example, Ms Palaszczuk told a radio interviewer this morning that the Commonwealth Grants Commission decides how revenue is allocated amongst the States and Territories and that ‘has not been changed for 30 years’.

“In fact, the Grants Commission has published updates or reviews of GST distribution every year since 2004, with major reviews released in 2004, 2010 and this year. The way the GST is distributed between the States can be changed and in fact we might find ourselves here in Queensland wanting to change the distribution in future years.

"In the last major review, we supported Western Australia's position that we needed a revised way of dividing mining royalties among the States. (See reference below.)

"If the Labor Government has now changed the Queensland Government's stance, then it should say so.” 

Senator Canavan said Queensland currently received back slightly more than its share of GST but that might be reversed in years to come.

"We may take glee in Western Australia's current position but karma may visit us sooner than we think. We hope to receive some $850 million a year in royalties from coal seam gas (CSG) in future years but, under the current GST formula, we stand to lose half of that, maybe more, to subsidise other States.

“Right now, WA earns about $7.2 billion in mining royalties but, under the existing GST formula, they lose about $4.6 billion, more than 63%, to other States.

“The CSG industry will generate big royalties but also involves big costs – for example, in areas such as infrastructure – and the Grants Commission does not truly recognise the costs of establishing and maintaining a mining industry. The Commission should establish the net royalties, not the gross royalties, by taking those costs into account.”

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