Federal Member for Fairfax

Media release

Senator for Western Australia Zhenya ‘Dio’ Wang has welcomed the establishment of a Senate inquiry into legislation he has introduced to ensure a fairer distribution of GST returns among states and territories.

“States and territories as well as their agencies and stakeholders such as economists will now be invited by the Senate Finance and Public Administration Legislation Committee to make submissions on my Commonwealth Grants Commission Amendment (GST Distribution) Bill 2015,” he said.

When introducing the Bill on October 13, Senator Wang said he did not want a vote to be rushed, so that all stakeholders had the opportunity to fully scrutinise the overall benefits of ensuring mining states’ share of GST returns better reflect royalty volatilities.

In support of calls by the WA Government for the Federal Government to overhaul its methodology for distributing GST among states and territories, Senator Wang’s Bill simply amends the Commonwealth Grants Commission Act 1973 to account for the impact of mining revenue annually – providing for an immediate, real-time buffer against extreme peaks and troughs and stability in budget formulation – instead of over three-year averages.

“Annual assessment is a fairer way of equalising GST distribution using the correct data because when royalties rise sharply, non-mining states will be immediately rewarded with a greater share of the GST; but when mining drops rapidly, WA is protected,” Senator Wang said.

“Annually accounting for mining royalties would increase WA’s share of GST from just 30c to about 85c in the dollar per capita in 2015/16 – or about $3,500m in additional GST revenue at a time when royalty revenue has plummeted – while making no other change to the assessment and distribution of GST revenue to other states.”

The committee will accept submissions until December 11 and is scheduled to report on the Bill in March next year. Further details are available online via the Parliament of Australia website at www.aph.gov.au/Parliamentary_Business/Committees/Senate/Finance_and_Public_Administration.