- The Commonwealth Treasurer has released the Terms of Reference for the Productivity Commission's review into the 2018 GST distribution reforms
- WA Labor Government will fight to ensure the legislated 2018 reforms are retained
- Existing 2018 reforms are critical to both WA and the national economic interest
- Submissions to the Productivity Commission review are due by 27 February 2026, with PC to release its interim report by 28 August 2026 and final report by the end of 2026
The starting gun has fired on the Productivity Commission review (PC review) into the 2018 GST distribution reforms with the release of the Terms of Reference by the Commonwealth Treasurer today.
The Western Australian Government has established a GST "fairness fighter" team within the Department of Treasury to lead the State's response to the PC review, with the team being led by former Under Treasurer Michael Barnes.
WA will seek to ensure that the legislated 2018 reforms to the GST system are not unwound, while improvements are made to the underlying methodology to better support development of mineral and energy resources and boost national productivity.
In 2018, following a campaign by the WA Labor Government, in partnership with WA industry leaders, the Productivity Commission undertook a review of the GST redistribution, after Western Australia's share of the GST fell to record lows.
The PC Review found the system of GST redistribution had significant weaknesses, including discouraging policies that support mineral and energy development, and recommended that the system be revised in the interests of national productivity and wellbeing.
In response to the PC's findings, the then CommonwealthGovernment legislated reforms, including guaranteeing that no State receives less than 75 pr cent of its population share of GST. The legislation also required that the PC review whether the reforms are operating effectively and as intended, as well as their fiscal implications by the end of 2026.
The 2018 GST reforms have been critical to ensuring a fair GST share for WA. Without the reforms, WA would receive just 18 per cent of its population share in 202526 or around $6 billion in less revenue per year. As such, any unwinding of the reforms poses a very serious threat to WA's financial sustainability.
Without the reforms, WA would not be able to invest in the economic infrastructure that supports the major resource projects that generate billions of dollars in export earnings for the entire nation, with WA accounting for almost half of the nation's exports. Cutting WA's GST share would also reduce funding for key services such as health and education.
Even with the 2018 reforms, WA continues to subsidise other States and Territories with around $2.5 billion per annum of Western Australia's GST redistributed to the east coast. This is on top of billions of dollars that flow to the Commonwealth and other States and Territories through higher company tax and other revenues, with WA delivering the highest contribution per capita in the nation.
Submissions to the Productivity Commission review are due by 27 February 2026. The PC will then deliver its interim report by 28 August 2026 with a final report by the endof2026, before a decision by the Commonwealth.
As stated by Acting Premier and Treasurer Rita Saffioti:
"Our government is unwavering in its commitment to maintaining a fair share of GST for Western Australia. We will be fighting extremely hard throughout this Productivity Commission review period to ensure that the 2018 GST reforms remain intact.
"Without the 2018 reforms, WA would be left with a grossly inadequate and unsustainable share of GST, undermining our ability to invest in the critical economic infrastructure and supporting services required to ensure the continuing prosperity of our State and the nation.
"We know that the Albanese Government is acutely aware and has supported maintaining the 2018 reforms, but we also know there are many on the east coast advocating for the reforms to be removed. We can't allow those critical voices to shape the debate.
"This debate can't just be about how the GST pie is divided amongst the States and Territories. It must also be about growing the pie, by encouraging economic development and productivity-enhancing reforms. The 2018 GST reforms achieve this balance and must be preserved.
"We are investing additional resources to ensure WA's voice is strong in our submissions to the Productivity Commission review and related representations, making a clear case for retaining these critical reforms."
