NADIA MITSOPOULOS, HOST: Well, the annual GST distribution has been released by the Commonwealth Grants Commission. That happened this morning. It always brings with it some argument between the states about what is fair and what is not. Now you will remember WA's share of the GST is protected by a deal done in 2018 which ensures that we now get at least 75 cents in the dollar, and if any other state is worth worse off as a result, they will get a top-up from the Federal Government. But what we're wondering is how sustainable that will actually be in the long term. Patrick Gorman is the Labor Member for Perth and the Assistant Minister to the Prime Minister. Patrick, good morning to you.
PATRICK GORMAN, ASSISTANT MINISTER TO THE PRIME MINISTER: Good morning. Nadia, good morning to your listeners.
MITSOPOULOS: I suspect at some point this morning, you'll be meeting up with your PM again, will you?
GORMAN: Look, I hope to see the PM while he's here in Western Australia. He's a regular visitor. I was with him when he was here on his last visit at the end of January, and I'm sure I'll see him before he heads back East to get ready for what is a very important Budget in just over a week.
MITSOPOULOS: And an election coming up as well. Now let's look at the GST. We know that WA's GST share cannot fall below 75 cents in the dollar, but if that deal was not in place, what would have happened over the coming year?
GORMAN: This deal from 2018, I'd just entered Parliament when we were debating this in the Parliament, and one of the first bills I spoke on was this Bill. I was very proud to vote for it on behalf of the great state of Western Australia. What would have happened had this not have been in place, is Western Australia's share of the GST would have dropped to just 18 cents in every dollar of GST that Western Australians pay. Every time they're at a cafe, every time they're at a supermarket, only 18 cents of that GST would go back to WA. The intention of the GST was always to fund essential services of the states and territories. That was the argument back in the 1990s when the Liberal Government introduced the GST. And to put it in big dollar figures for your listeners, Nadia, if we were stuck under the old formula, Western Australia would miss out on $6 billion next financial year. And I think your listeners can all think of what would happen if you ripped $6 billion of services out of Western Australia.
MITSOPOULOS: And that would be out of a total that we'll get in 2025-26 financial year of $7.8 billion.
GORMAN: That's correct. And so the increase that Western Australia will get in the new distribution will be an additional $395 million. Obviously, we've seen some of the prices of iron ore and other things come off a little bit. Our GST share was going to be even less than that 18 cents before this. And again, thankfully, that 75 per cents law means we'll get an additional $395 million into the WA State Government's budget, but then back out into the community for essential services.
MITSOPOULOS: Okay, so that $6 billion extra that we'll get this coming year, I mean, that's the difference between a good surplus and a big deficit for the State Government. Is there an argument that they had just been propped up by this deal, and that maybe they're not such good economic managers after all?
GORMAN: I wouldn't agree with that assessment, and I don't think many sensible analysts would. What we know is that no government ever expected when this GST arrangement was put in place in 1999, no one ever foresaw seeing states fall to that nine cents in the dollar, 11 cents in the dollar, 18 cents in the dollar. That was never the outcome. And of course Western Australians don't expect to get a full return of every cent of GST paid in. I, as a Western Australian, want to make sure that services across the Commonwealth are well funded, and that's why we have a GST formula that takes into account the needs and capacities of different states. But some base level is where the Australian Parliament - or most of the Australian Parliament, there are some people who didn't support the GST deal, I'll get to them in a second. But most people think that having a base floor so that governments can plan; state governments get better value for money when they have a bit of certainty about the revenue they're getting in and that's something we've been really committed to.
MITSOPOULOS: But is it really good 'til, because ultimately taxpayers foot the bill?
GORMAN: Well we're talking about a tax that taxpayers do pay in the GST. I mean, most people will find that they're paying GST one way or another every single day of their lives. It's on pretty much every transaction that people pay.
MITSOPOULOS: I'm talking about the top-up, sorry.
GORMAN: The No Worse Off Guarantee, which is not a payment that's made to Western Australia, Western Australia simply gets 75 per cent of its GST contribution back, but that No Worse Off payment from the data released by the Commonwealth Grants Commission. And your listeners can go to cgc.gov.au, and see the full report. That No Worse Off Guarantee -
MITSOPOULOS: Everyone will be scrambling to read it, Patrick Gorman.
GORMAN: I'll tell you what, I think you know I am the sort of person who did scramble to read it the minute I could this morning. But that No Worse Off Guarantee costs about $4.9 billion and that's a way of making sure that we do support every state and territory in a way that's seen to be fair, we've been really clear as the Albanese Labor Government that we support the ongoing GST arrangements. We actually put in our budget an extension of the No Worse Off Guarantee, because Scott Morrison and Peter Dutton and the rest they didn't fund it through to the end of this decade. We've fixed that up. Because we want to make sure that states can just get on with doing the important work they've got, running hospitals, delivering great schools, their public transport networks, and this is a way that we support that.
MITSOPOULOS: My guest is Patrick Gorman, Federal Labor Member for Perth, and he's also the Assistant Minister to the Prime Minister. Nine Newspapers are reporting today that the cost of the GST deal is going to hit $60 billion over 11 years, which is 17 times higher than the Morrison Government initially estimated. Surely this cannot continue forever, can it?
GORMAN: Well, I've just said that we've extended this arrangement out for another three years.
MITSOPOULOS: Because no Government, government doesn't want to deal with this going forward, that's why you keep extending it.
GORMAN: Well, we did choose to deal with it going forward. We decided back in 2023 we had an arrangement to extend it forward for the rest of the decade. That was about long term certainty, and it was about making sure - and we worked through National Cabinet as well. We were working through National Cabinet on important things around improving Disability Services and the National Disability Insurance Scheme. Important things around making sure we get the right Commonwealth funding into our state and territory hospital systems. And we made a commitment that would extend, for certainty for states and territories, the No Worse Off Guarantee. And it's worked. I think that's the other thing that -sorry, I'm keen to get to your question. But I just want to say, it's worked. We're not having a constant argument about the GST, the states are just getting on with being able to deliver essential services, and that's what I want to see.
MITSOPOULOS: But will there become a point though, where it won't be sustainable? If we are looking at that figure, that cost set to hit $60 billion over 11 years. Again, 17 times higher than the Morrison government initially estimated. Surely, something will have to be done because of that, you know, No Worse Off provision that's there.
GORMAN: I think people have seen how we've conducted ourselves as the Albanese Labor Government. We have put in place extensions. We've put in place certainty. I think your listeners probably heard me talk about this before, but there was one person, when this was all going through the Cabinet in 2018 back under the then Turnbull Government. There was one person who sat in that Cabinet who didn't support the deal, and that was Peter Dutton. And I know your listeners will go "oh, sure, Patrick, you're saying that. Where's the proof?" The proof is in Malcolm Turnbull's book A Bigger Picture. He said, quote "there was enormous anxiety around the Cabinet table, and especially from Peter Dutton, when they were looking at this GST deal." So if Western Australians want to see certainty for state government funding for essential services, you can't trust Peter Dutton with WA's GST, because the evidence is there that he personally opposed this deal.
MITSOPOULOS: That's in the past, though, I mean, the Liberals have publicly and repeatedly committed to WA's GST deal.
GORMAN: Yeah, but we've seen quite a few people go out of their way to point out just how strongly Peter Dutton opposed this. Julie Bishop has said that Peter Dutton is on record arguing against WA getting a better GST deal. Scott Morrison said that Peter Dutton was a risk to the WA GST deal. Even Ken Wyatt, a Western Australian who I think most people respect to talk straight and tell us the truth. He said that one of the reasons he couldn't ever consider serving in a Dutton Ministry was because he thought that Peter Dutton was a risk to WA's GST and would destroy his credibility.
MITSOPOULOS: Final question Patrick Gorman, I've got a few people texting in like Greg in Mindarie. He says, you know, "why doesn't the Eastern States gambling revenue count? And do you think it should?"
GORMAN: Greg, that's a really good question. That's a question that's been raised in various forms. I think Alannah MacTiernan was raising this issue more than a decade ago. The Commonwealth Grants Commission again have done a look at whether this would be the path forward. They haven't recommended that. We obviously take their recommendations really seriously. We've found the smart way through, which is the No Worse Off Guarantee. That what we've funded. And I think we're really fortunate here in Western Australia not to have pokies on every street corner. It's a good thing, and we should keep it that way.
MITSOPOULOS: All right, I'll leave it there. Good to talk to you, Patrick, thanks for your time.
GORMAN: Thanks Nadia.
MITSOPOULOS: Patrick Gorman there, Federal Labor Member for Perth, he is also the Assistant Minister to the Prime Minister, who is still in town.