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Relief for SA as GST changes shelved

Tuesday, 29 January 2013
Author: Indaily

NEW State Treasurer Jay Weatherill can breathe a sigh of relief - proposed changes to the GST have been shelved.

States with strong economies had been lobbying the Federal Government for GST to be distributed on a per capita basis; such a move would have reduced South Australia's take from the GST pool.

SA receives approximately $1.28 for every dollar it collects - a process called "horizontal fiscal equalisation" which gives poorer states a boost.

The four economic powerhouse states of NSW, Victoria, Queensland and WA have been lobbying for a greater share of the pie.

Former treasurer Jack Snelling told Indaily last year the GST push was one of the biggest threats to South Australia's revenue.

Today, however, a letter has surfaced from federal Treasury secretary Martin Parkinson informing the states and territories that there will be no substantive reforms to GST distribution.

The letter, obtained by The Australian Financial Review, says just three recommendations would be considered in a 2013 update.

"Only those recommendations unanimously agreed by the states through this process will be implemented in the 2013 Update," Parkinson's letter reportedly says.

Weatherill told the AFR: "[It] has underpinned the nation's prosperity by distributing the GST evenly across the nation, allowing all Australians to access a similar level of government services."

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