The deterioration of the Tasmanian budget means that net debt is expected to reach $10 billion by 2027-28.
However, two simple measures at the Commonwealth level could raise an additional $303 million a year in revenue for the Tasmanian government, or $1.5 billion in total over the 5 years to 2030.
These changes are:
- Renegotiating Western Australia's GST deal, which was struck under the Scott Morrison government, and gives WA a much higher share of total GST.
- Broadening the GST to include private school fees and private health insurance.
Independent Economist Saul Eslake estimates that for the five years to 2030, the average annual cost of the WA GST deal is around $4.1 billion a year, and says changes to the GST carve-up deal are not working as intended.
"A government that truly believed in equity, and was committed to prudent and responsible budget outcomes, would scrap this appalling piece of public policy," wrote Saul Eslake in The Conversation.
"And an Opposition that was sincere in its claims to stand for fiscal responsibility would support any move by the government to do so."
If that $4.1 billion was distributed to other jurisdictions on existing GST revenue shares, the Tasmanian government would receive around $154 million a year in additional revenue.
Over the period to 2030, close to an additional $770 million could be generated.
Australia Institute research in 2014 estimated that extending the GST to private school fees and private health insurance could generate an additional $2.3 billion in revenue a year, with 60% of the revenue coming from the top 40% of income earners.
Since that time, the total GST revenue has grown 60%, and if it is assumed that GST revenue from private school fees and private health insurance followed that growth, that revenue estimate grows to $3.8 billion a year.
Distributed on existing GST shares, that means up to $149 million a year in additional revenue for the Tasmanian government, and $747 million to 2030.
A new poll, conducted for The Australia Institute, reveals more than one in three Tasmanian voters believe seeking more federal funding should be prioritised as the first option to raise revenue and reduce debt for Tasmania.
"The WA GST deal has been described as the worst public policy decision of the 21st Century and one of the worst fiscal decisions ever made," said Eloise Carr, Director of The Australia Institute Tasmania.
"The Productivity Commission will report by the end of next year on whether the new system is working, and – based on the evidence – the answer is no.
"If the government truly believes in equity and responsible fiscal policy, changing the GST carve-up will be high on its agenda.
"Further, broadening the GST to include private school fees and private health insurance is a straightforward way to increase GST revenue without increasing the rate.
"Tasmanians think more funding from the federal government should be a priority for whoever wins the election, and these modest, simple and fair changes would provide help repair Tasmania's budget, while helping other jurisdictions at the same time."
YouGov conducted a national survey of 842 Tasmanian voters on behalf of The Australia Institute between 12 and 16 June 2025, using an online survey polling methodology. Full details are provided in the methodology statement. The poll is compliant with the Australian Polling Council's requirements.
