View from The Hill: Pragmatism holds Albanese to bad GST carve up, but Productivity Commission remains burr under saddle
The government is so far turning a blind eye to the Productivity Commission’s scathing GST review. But that’s not stopping the commission from making its case.
Prime Minister Anthony Albanese has made a commitment to maintain Western Australia's generous share of the Goods and Services Tax (GST), despite the Productivity Commission's recommendation to dismantle it. Albanese's pledge, which he has repeatedly reinforced, is supported by Labor's strong hold on 11 out of 16 federal seats in the state.
However, the Productivity Commission, chaired by Danielle Wood, remains resolute in advocating for reform. Commissioner Angela Jackson, a co-author of the commission's interim report, contends that the current GST distribution is unfair to states other than Western Australia, costing them nearly $23 billion in the first six years.
Despite the commission's strong stance, Albanese's government continues to face pressure to uphold the deal, as it serves their immediate political interests. The commission's role as a bastion of economic rationalism highlights the challenges in achieving significant tax reform, given the strong resistance from state governments and the potential political backlash against bold policy changes.
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