Federal Budget: Jim Chalmers reveals $30b GST bump for WA as he puts focus on cost-of-living relief

WA is in line to get more than $30.6 billion in GST payments in next week’s Budget as Treasurer Jim Chalmers again guarantees that the limit on how far the State’s share can fall is set in stone. Targeted cost-of-living relief, a bid to end pockets of entrenched disadvantage and moves to seize the economic opportunities of clean energy will be the centrepieces of next Tuesday’s Budget. Dr Chalmers will also unveil changes to taxes on offshore gas projects and is tipped to reveal a balanced bottom line or possibly even a small surplus. But there are still significant long-term spending pressures — including more than $20 billion each year in interest payments on government debt — that constrain what can be done. The Treasurer’s watchwords are “responsible, methodical, considered”, he told The West in an exclusive pre-Budget interview. “The balance that we will strike is providing that cost-of-living relief in the most responsible way and laying the foundations for future growth and having a responsible and restrained Budget,” he said. The Budget will show WA is expected to $6.5 billion in GST in 2023-24, rising to $9.1 billion in 2026-27. In total the State should get $30.6 billion over the next four years. Without the guaranteed return of 70¢ on every dollar of GST raised in WA, the State would be receiving just $900 million in the next year. Dr Chalmers said the Government remained “very committed” to the GST floor. “It’s there for the right reasons,” he told The West. “We are so grateful and cognisant of the immense contribution that WA makes to the national economy and to the national Budget. And we want to see that recognised and the Albanese government will always recognise it.” The State and Territory treasurers, including Mark McGowan, jointly wrote to Dr Chalmers in January asking for the “no worse off” transitional payments part of the 2018 deal to be made permanent instead of ending in mid-2027. Dr Chalmers said this week that was an important decision but the Government had plenty of time in which to make it. Mr McGowan welcomed the Federal commitment to keeping the GST deal. “WA will still be providing a GST subsidy to other States and Territories to the tune of $2.8 billion in 2023-24,” he said. Dr Chalmers and Finance Minister Katy Gallagher are expecting a substantial near-term improvement in the Budget bottom line on the back of high commodity prices and high employment levels increasing tax revenue for the year. But they’re not rushing to spend the money, noting that “the pressures intensify rather than ease” in the longer term. “We still have big structural challenges, Dr Chalmers said. “We still have that combination of interest costs on the debt, the NDIS, health care, aged care and Defence putting substantial pressure on the Budget.” The West has confirmed there will be changes to the petroleum resources rent tax made on Tuesday, although Dr Chalmers cast doubt on reports it would raise an additional $3 billion. Asked how the Government reconciled its rhetoric about the important contribution of WA to the national economy with changing resources tax and regulatory regimes, he said he did recognise the “crucial role” of gas in the nation’s future energy mix. “I have said repeatedly — even as we’ve had to engage in difficult issues with the industry on the east coast and elsewhere — that I recognise the central importance of gas and resources to our economy and to the net-zero transformation, frankly, and our policies will reflect that,” he said. The measures to help households doing it tough will include help with energy bills, including in WA even though the State hasn’t experienced the 20-30 per cent hikes seen on the east coast. “It’s a different energy market with a different set of pressures and the assistance will reflect that, but it will be meaningful,” Dr Chalmers said. “We’ve worked closely with Premier and Treasurer McGowan and his team to deliver some relief, but which recognises that the pressures are far more acute on the east coast.” The McGowan Government will match the Federal contribution and Dr Chalmers said it had had a lot of say in how the measure was shaped. There will also be a $200 million package of local initiatives aiming to “shift the need in disadvantaged communities”. “It has been, I think, a concern of ours for some time that even in an economy which is capable of creating opportunities, an economy with 3.5 per cent national unemployment . . . there are pockets of disadvantage in this country,” Dr Chalmers said. “We don’t want to see long-term unemployment. We don’t want to see entrenched intergenerational disadvantage.”