States want details on GST guarantee

Federal Treasurer Josh Frydenberg has ruled out reducing payments to states and territories which receive a windfall through changes to the GST revenue carve-up.

Mr Frydenberg made the commitment as he prepared to introduce draft laws including a legal guarantee no jurisdiction will be worse off under the changes.

“We’re not going to reduce the payments to the states and territories if any additional money will be provided to the states and territories through this guarantee,” he told Sky News.

States are calling for more details on the federal government’s guarantee.

Mr Frydenberg had previously rejected the need for a legislated guarantee, but backed down in the face of pressure from his backbench and state governments.

Queensland Treasurer Jackie Trad welcomed the step, but wants greater clarity around the laws before her state supports them.

“We won’t accept a deal without the detail,” she said.

“The plan was shared with the LNP party room and it should also be shared with Queenslanders.”

Tasmania is also reserving its support, despite being pleased the guarantee will be in law.

“We will review the commonwealth’s latest proposal and subsequent legislation before making further comment,” Tasmanian Treasurer Peter Gutwein said.

The safeguards will ensure every state and territory will be in a better financial position as a new system of carving up GST revenue is rolled out from 2021/22 to 2026/27.

An inquiry will be held in 2026/27 to check if the new system is working as it should.

NSW Treasurer Dominic Perrottet has extended the warmest welcome to the guarantee, saying Mr Frydenberg’s commitment to it was a “great day for the people of NSW”.

Northern Territory Treasurer Nicole Manison said it would protect against future cuts, but not save the top end from being $500 million worse off under the revised carve-up.

“Territorians deserve the same level of services as other Australians,” she said.

The federal government will introduce a 75-cent floor in GST payments, with the reforms hatched to protect WA’s share crashing to the mining boom lows of less than 30 cents in the dollar.


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