Last month, in recognition of the unique challenges Tasmania faces with housing affordability and homelessness, the Hodgman majority Liberal Government and the Morrison Liberal Government entered into an historic agreement to waive Tasmania’s historic housing-related debt.
Today, I am pleased to confirm advice from the Federal Treasurer that the waiving of Tasmania’s housing debt will be excluded from GST relativity calculations.
If individual funding arrangements between a State and the Commonwealth Government are not specifically excluded, then in subsequent years, the Commonwealth Grants Commission will redistribute that funding to other states through the GST allocation process.
This exclusion is vitally important. It should never be forgotten that Andrew Wilkie failed to secure this when seeking funding from Julia Gillard for the Royal Hobart Hospital redevelopment.
This basic failure has meant Tasmanian taxpayers have been forced to fund, almost in its entirety, the $780 million construction cost of the redevelopment, with other States actually receiving the overwhelming share of the funds committed to the project by the Commonwealth.
Today’s announcement is a great example of how two Liberal Governments can work together to achieve better outcomes, and we acknowledge and thank all parties involved in securing the waiving of the debt and the GST exemption.