WA Budget 2025: GST win coming for the west as fight looms over lucrative deal

WA will see its GST share lift above the legislated 75 cent floor for the first time the Budget has predicted, as the Government prepares to argue for the 2018 deal which has proven an economic boon for the State.

Ahead of a Productivity Commission-lead review next year, Treasury has made concerns clear over the Commonwealth Grants Commission’s process for calculating the annual handouts to the States, including outdated references to the pandemic.

Under the fair share deal, which mandates WA receives 75 cents for every dollar, from 2026-27 the State’s GST will be weighted to NSW’s share, putting WA’s slice of the national fund at 82 cents in the dollar — the highest point in more than a decade.

Without the deal, WA’s share would have fallen to as low as 18 cents in the coming financial year.

The Budget made the argument that the cost of maintaining WA’s share above the floor — a constant gripe for other State Governments — was clearly outweighed by the value of the State’s iron ore industry.

“Every State, not just Western Australia, has benefited from high iron ore prices,” the Budget states

“The other States can now expect to receive about $30 billion extra GST over 2020-21 to 2028-29, because of the higher than expected iron ore prices to date.

“The three largest iron ore miners paid $17 billion to the Commonwealth in company tax in 2023-24 on its Western Australian operations, while the cost of the no-worse-off guarantee was only $5 billion that year.”

But a recent review of the calculations used by the Commission drew criticism from the State Government, for failing to consider

“For example, the CGC’s decision to include COVID-19 business support and health expenses resulted in States that recorded higher expenses receiving higher GST grants,” the budget read.

“This method change does not acknowledge the different policy approaches of States when responding to COVID-19, and penalises States that took actions that prevented the spread of COVID-19 in the community.”

In her Budget speech, Treasurer Rita Saffioti stood by the deal, saying the global uncertainties were a “constant reminder” the agreement needed to be protected.

“It is again important to point out that despite the irrational and absurd commentary from many over east, WA will still only receive 75 per cent of our population share of GST this year,” she said.

“In fact Members, our Treasury officials have estimated that Western Australia’s net contribution to the other States last financial year was $39 billion. That is, $13,000 that every Western Australian is contributing to the rest of the nation.”