Western Australia’s GST fight puts Canberra on notice as review backs state funding deal
Western Australia is once again in the fight over its GST share, after a new Productivity Commission interim report said the state received enough revenue
Western Australia is once again in the fight over its GST share, after a new Productivity Commission interim report said the state received enough revenue in 2024-25 to meet 113% of its assessed fiscal needs. Other states were assessed at 98%, with the Commonwealth covering the remaining gap.
The numbers land in the middle of a long-running political argument in Australia over how the national tax pool is split. WA has relied on a special arrangement in recent years, a deal that replaced the formula used by every other state and delivered an extra A$22 billion from the federal government through to mid-2025. That windfall helped WA post record surpluses while the rest of the country was left no worse off.
A fight over “precious GST dollars”
Alarm bells were said to be ringing in WA government offices after what Treasurer Rita Saffioti called an attack from the “east coast clowns” on the state’s GST money. Before leaving a fiery press conference, she joked: “While we’re gone, they’re going to take our GST.”
WA’s leaders say the extra billions are justified. They argue the state has paid the nation back through company tax and other contributions, and that the cash has helped underpin Australia’s broader prosperity.
Canberra’s review sharpens the dispute
The Productivity Commission’s interim report cut against WA’s position. It said the state’s current share of GST already exceeds its assessed needs, at least on the commission’s measure, and the federal top-up fills the final 2%.
The report also aligned with every other state and territory, according to the commission’s findings. That leaves Canberra with a familiar political headache: any move to scale back WA’s deal would trigger a fierce response in Perth, while leaving it untouched keeps the national carve-up under pressure.
The issue is not new, and it is not small. GST redistribution has long been one of Australia’s most sensitive federal-state disputes, because it reaches straight into budgets, surpluses and the balance of power between the east coast and the west. With the commission now airing its view, the next round of pressure will fall on federal decision-makers and WA leaders still defending the arrangement.
