The annual carve-up of the GST revenue pie has again left winners and losers among the states and territories, but as usual no one is happy.


Worst hit was Victoria, which saw its share cut, effectively slashing its GST income by $500 million for 2011/12, the Commonwealth Grants Commission’s advice to the federal government released on Friday showed.

But the big mining states, Western Australia and Queensland, will get a larger share of the cake this time around.

“Volatile mining and property revenues, varying population and more recent data on private-sector wages, are driving adjustments in GST shares,” commission chairman Alan Henderson said releasing the report.

He said that while mining revenues continued to boost the fiscal capacity of Queensland and especially Western Australia, their impact on GST shares had been offset by slower property markets and revised wage levels.

These have increased their costs of service delivery, he said.

“In contrast, Victoria’s GST share has declined because property markets have been more buoyant and relative wages growth has been slower in Victoria,” he said.

Victorian Premier Ted Baillieu was shocked by the report, saying the cut was unjustifiable.

Its proportion for 2011/12 was cut to 22.5 per cent from 23.4 per cent in 2010/11.

The state will still get an additional $280 million because the GST take nationwide will be larger, but the amount will be $500 million less than it would have been if Victoria’s share had stayed the same.

“This is a massive, we believe, unjustified and unprecedented cut in Victoria’s share of GST revenue,” Mr Baillieu told reporters in Melbourne on Friday.

The commission expects total GST revenue in 2011/12 will be $50 billion versus $46.95 billion in 2010/11, meaning that all regions will get additional monies even though their shares may have changed.

Western Australia’s GST slice will rise by $414.3 million, a 7.5 per cent share from 7.1 per cent, while Queensland will get an extra $764.5 million as its proportion rises to 19 per cent from 18.6 per cent.

Despite this, Queensland Treasurer Andrew Fraser says his state is still being “burgled”.

In a speech in Brisbane, Mr Fraser argued that more than 75 per cent of the GST funds redistributed were from mining royalties.

On a per capita basis, Victorians receive $343 from mining, while the mining states, Queensland and WA, get $228 and $199 per capita, respectively.

“The resource states of this nation are being burgled by the likes of NSW and Victoria,” he told the Committee for Economic Development of Australia (CEDA).

Mr Fraser later told reporters the WA treasurer shared his concerns about inequity in the grants commission, proof that it was a problem that transcended the political divide.

WA Treasurer Christian Porter said the state’s greater GST share was “kind of good news” – like hearing your house had been robbed but finding the couch was still there.

WA’s GST cut is equal to about 72 cents for every dollar raised in the state, up from its current record low of 68.2 cents.

Mr Porter said WA’s cut was still very unfair, and the state government hoped to win its case for a floor of 75 cents in the dollar.

The nation’s most populous state, NSW, will see its share rise to 30.9 per cent from 30.8 per cent, bringing in an additional $972.4 million, while the Northern Territory’s GST slice will rise to 5.6 per cent from 5.2 per cent for an additional $316.4 million.

Modest proportional cuts were advised for South Australia and Tasmania, while the ACT was unchanged at 1.8 per cent, still resulting in an extra $26 million GST revenue.

South Australia’s share will fall to 9.3 per cent from 9.4 per cent, but it will still get an extra $204 million.

Tasmania’s cut will be reduced to 3.6 per cent from 3.7 per cent, but the amount will be $72.4 million more than in 2010/11.