24 October 2007

Labor's GST Plan to Cut Queensland and WA

Labor candidate Belinda Neal has let the cat out of the bag on the prospect of wall-to-wall Labor Governments changing the way funds flow to the States from the GST.

In an interview with a Central Coast radio station, Labor candidate for Robertson and the wife of NSW Labor powerbroker John Della Bosca revealed that Shadow Treasurer Wayne Swan has given a commitment to give more GST to New South Wales at the expense of the other States.

The independent Commonwealth Grants Commission currently oversees the distribution, which seeks to ensure every State has the same opportunity to provide equivalent standard of service regardless of size and population.

NSW says it wants other States to be cut so it can get more GST. Belinda Neal is clearly in favour of taking money from other States and Wayne Swan has been fingered as agreeing to help NSW to the detriment of other States and Territories.

Belinda Neal: ...Obviously I would like to see the formula for the GST and its distribution between the States reviewed...

Interviewer: Will it happen?

Belinda Neal: Yes, Wayne Swan has already given that commitment - to say that we will review the GST formula in government but obviously no final decision has been made about exactly how that will be done but certainly I will be pushing for a bigger share for NSW; that I think NSW has a great need at the moment and some of the other states like Western Australia and Queensland are benefiting more from the resources boom than we are and I think that the national Government needs to recognise that and give us a greater share particularly since we are short-changed now. ABCCentralCoast, 24 October 2007.

The election of Labor Governments in all Australian jurisdictions would open the way to change the allocation of GST. Whilst cutting Queensland and WA will be popular in NSW, Mr Rudd should level with voters in those other States to explain how it will leave those States worse off.

The management over Australia's $1 trillion economy is a difficult task. Reigniting State rivalries by favouring some States at the expense of others is short sighted and ill considered.