The Productivity Commission’s interim report shows how important the restoration of full horizontal fiscal equalisation is for Tasmania.
The report shows that GST is a material share of the Commonwealth payments that account for 63 per cent of the State’s total revenue base.
Treasurer Eric Abetz said while the Productivity Commission has proposed its own preferred pathway for reform, Tasmania’s position remains that the GST system should return to the pre-2018 arrangements which fully equalised states’ fiscal capacity.
“We will fully analyse the interim report and make a further submission to back in fairness and equity for Tasmania’s sustainability,” the Treasurer said.
“The Productivity Commission acknowledges that the 2018 GST reforms have not met their original intent.
“Securing a fair GST distribution system for Tasmania is vital for the future of our State.
“It is critical for Tasmania’s capacity to fund our hospitals, schools, police, roads and the essential services Tasmanians rely on every day.”
While the Productivity Commission has proposed several reform options, Tasmania’s position remains clear: unless the pre-2018 GST distribution system is restored, Tasmania’s GST revenue could be reduced by up to 15% each year, equivalent to a loss of up to $530 million in 2024-25 alone.
“Tasmanians must once again speak with one voice as we did in our initial submission which has seen a substantial adoption of Tasmania’s input,” the Treasurer said.
“A full urgent analysis will be undertaken to ensure Tasmania’s interests are protected and forcefully advocated.”
