Tim Nicholls lobbies Canberra for ‘fair’ share of GST

Queensland Treasurer Tim Nicholls says it would be “unfair” for the Queensland government to be “penalised” by any changes to the Mining Assessment aspect of the GST carve up. Photo: Glenn HuntWhat about Queensland? It isn’t fair.
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The state gives up its mining royalties, now it wants its share.

It is not quite Moving Pictures, but Treasurer Tim Nicholls has written to his federal counterpart urging caution in regards to the GST methodology review following intense lobbying from Western Australia about how GST receipts are calculated.

That state has suffered from a downturn in the iron ore price, which has equated to a drop in royalty payments, but its change in circumstances is unlikely to be considered in the annual GST carve-up, because of a three year lag in how payments are worked out.

Mr Nicholls said many jurisdictions were in the same position and it would be “unfair” for the Queensland government to be “penalised” by any changes to the Mining Assessment aspect of the GST carve up.

“The Queensland government should be recognised for its disciplined and responsible financial management, which has allowed it to start repairing the deficits and debt left by the previous Labor government, despite the major write-downs from mining royalties,” he said.

Western Australia sees about 38 cents from every dollar it pays in GST returned. It wants that figure to jump to at least 75 cents. Queensland receives about $1.08, while Victoria sees 88 cents come back and NSW receives 98 cents come back.

Mr Hockey wrote to the Commonwealth Grants Commission just before Christmas, asking it to consider amending the way GST receipts were worked out and to specifically consider Western Australia’s position, given its changed mining royalties circumstances.

But any more money for Western Australia would mean less money for the other states.

Mr Nicholls now wants to make sure that Queensland is not forgotten in any shake up.

“…A number of states have been severely affected by falls in commodity prices, resulting in major reductions in revenue from mining royalties,” he said in his letter to Mr Hockey.

“In particular, the downturn in coal prices has had a major impact on Queensland’s budget. Between 2012-13 and 2015-16, revenue write-downs from all royalties have so far amounted to $4.9 billion.

“New South Wales, South Australia and the Northern Territory have all made revenue write-downs.

“Given that a number of states and the Northern Territory are affected, it is essential that any proposed changes to the Mining Assessment are universally applied to all jurisdictions.”

Mr Nicholls also said it was “essential” that the states had the opportunity to review any proposed changes to the Mining Assessment and the GST distribution formula, before it becomes fact.

“I will be meeting with Mr Hockey in coming weeks to discuss these issues,” he said.

Prime Minister Tony Abbott had said that “the GST won’t change – full stop, end of story” in 2013, but has since hinted the Coalition was open to making amendments, as part of its tax reform agenda.

This story Administrator ready to work first appeared on Nanjing Night Net.