WA receives highest GST share since 2000 as population and economy grow

Western Australia will receive $6.8 billion in GST revenue in the current financial year — its highest dollar amount and per capita share since 2000 — as the combination of population growth, a rising relativity factor under the 2018 GST reform, and strong national GST collections combine to deliver the state an exceptional fiscal transfer from the Commonwealth.

The 2018 GST reform, which set a floor on WA's relativity at 70 cents per dollar and provided transitional payments to compensate other states, was negotiated by the Morrison government in response to years of WA receiving as little as 30 cents per dollar during the peak of the resources boom when the state's own-source revenues were high. The reform has progressively improved WA's position as own-source revenues have moderated and the relativity formula has adjusted.

WA Treasurer Rita Saffioti said the GST receipt of $6.8 billion, combined with strong royalties from iron ore and lithium, gave the WA government the fiscal capacity to accelerate infrastructure delivery and build the service and housing investments needed to support the state's growing population. "Western Australia has resources, population, and now a fair share of GST. We are building accordingly," she said.

Federal Treasurer Jim Chalmers said the GST distribution was working as intended, providing WA with fiscal support that reflected its service delivery needs rather than simply its mining revenue cycle. He noted the reform had bipartisan support and was not subject to political negotiation, operating through the automatic mechanism of the Commonwealth Grants Commission's relativity assessments.

The states that experience reduced GST shares as WA's relativity improves receive transitional payments from the federal government's GST pool top-up, funded by general revenues.

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