Swan puts heat on Newman over GST 'windfall'

Federal Treasurer Wayne Swan wants Premier Campbell Newman to explain how he intends to use the extra $700 million in GST revenue.
Federal Treasurer Wayne Swan wants Premier Campbell Newman to explain how he intends to use the extra $700 million in GST revenue. Kari Bourne

A SLOWDOWN in mining and a weak property market means Queensland will need $700 million more in GST revenue than initially forecast.

The Commonwealth Grants Commission, which assesses how GST is carved up among the states, recommended Queensland's share of GST largesse be increased by 1.6% to 21.5% in 2013/14.

Queensland will receive almost $11 billion in total, an increase of more than $1.3 billion, or 14%, on the previous year.

Dwindling coal mining revenue had reduced Queensland's fiscal capacity by more than $450 million alone since 2008/09, the CGC report released late on Friday found.

A sharp fall in stamp duty caused by a sluggish property market also hit the state's coffers.

"We have assessed that Queensland needs $696 million more GST than we assessed them as needing last year," the CGC report reads.

It is the first time since 2007/08 Queensland has required GST money above its population share.

Federal Treasurer Wayne Swan pounced on the news, demanding Premier Campbell Newman explain how he intended to use the GST windfall.

He called on the Newman government to reinstate the health and education services cut in last year's budget.

"At a time when many Queenslanders are feeling the impact of the Newman LNP government's savage cuts to jobs and frontline services, Premier Newman must do the right thing and put this money back into frontline health and education services he has cut," Mr Swan said.

"I think Mr Newman owes Queenslanders an explanation as to what he will use this money for given his recent savage cuts to jobs and services."

Queensland Treasurer Tim Nicholls said the increase should not be characterised as a "windfall", claiming the numbers in the CGC report had been factored into last year's Queensland budget.

And he said calls to wind back the austerity measures - which he described as "fiscal repair" - contained in that budget were "utterly ridiculous".

"No new funds are available, and, in fact, the Federal Government is clawing back health payments to the tune of $103 million," Mr Nicholls said.

"While we know Queensland's share of GST will rise from 19.9% to 21.5%, we still don't know how much we will actually receive because Federal Treasurer Wayne Swan is refusing to reveal the total size of the GST pool."

Meanwhile, it was a different story for Western Australia - the only state whose GST revenue will take a hit in 2013-14.

The CGC found WA would need $550 million less than forecast last year, which means the state's total GST revenue will be fall by almost $400 million, or 13.2%, year-on-year.

WA's share of the GST pie will fall a full point to 4.9%.

CGC chairman Alan Henderson said one word explained WA's need for less GST cash - mining.

"Western Australia's mining production continued to grow to the point where, by 2011-12, it had the capacity to raise nearly $2200 per person in mining royalties compared with about $450 per person for all states," Mr Henderson said.

"This sustained growth and the associated impact on employment and wages elsewhere in the State gives it an unprecedented fiscal capacity."

The changes in GST distribution were only small for other states and territories.

CGC recommendations are designed to allow all states to provide the same standard of services, provided they make the same effort to raise revenue. .

Topics:  campbell newman, gst, tim nicholls, wayne swan



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