Please sir … don’t give WA any more money

Described by independent economist (and proud Tasmanian) Saul Eslake as the worst public policy initiative of this century, the GST deal put in place by Scott Morrison and Josh Frydenberg in 2018 has become an unmitigated fiscal disaster for Canberra. It was driven by problems with the GST allocation system that had led to WA, in the midst of a domestic recession, receiving ever-dwindling amounts of GST. At one point, it was clear that unless the system changed that WA taxpayers would not receive a cent of the tax. To fix a clearly broken system, the Productivity Commission recommended the GST be shared on a per capita basis between the states and territories with top-ups for those areas with particularly difficult financial problems (primarily Tasmania and the Northern Territory). Instead, Morrison came up with the current two-part system.