Albanese defies criticism of colleagues, premiers, treasurers and economists to back WA’s ‘unfair’ GST share

Anthony Albanese has stared down a blast of criticism from State Labor colleagues, premiers, treasurers, bureaucrats and economists to issue a full-throated endorsement of Western Australia’s current GST share.

Flanked by WA Premier Roger Cook during a visit to Perth on Monday, Mr Albanese vowed the current arrangement which boosted the State’s disruption after 2018 reforms would remain unchanged “whilst I’m Prime Minister”.

“There will be no change to WA’s GST arrangements whilst I’m Prime Minister. That is my view. That has consistently been my view,” Mr Albanese said on Monday.

“The floor of 75 per cent will absolutely stay. I will always back WA. I am in sync with the Premier. There will be no change to WA’s arrangements, whatsoever, on the GST.”

His iron-clad guarantee comes after the Productivity Commission labelled a deal stuck by Scott Morrison in 2018 to return more of a share back to the resources State via top up payments a “perverse” and “costly mistake” that disproportionately benefited WA.

The federal budget forecasts the deal for Australia’s largest state will cost $6.6 billion in 2026/27 and $60 billion in total by the end of the decade.

The 124-page report validated east coast critics who claimed WA was getting too much out of the $102.5 billion Federal GST pool of Goods and Services Tax (GST) collected across all states and territories but placed presser on the PM from the west to clarify his position.

The report insisted the Scott Morrison-era deal, which rescued WA from a record-low GST return of just 30 cents in the dollar, has cost Australian taxpayers $23 billion — more than four times what was originally projected.

Mr Albanese’s commitment in Perth comes after agitation across the rest of the country as treasurers consistently called for WA’s disruption to be calibrated.

New South Wales treasurer Daniel Mookhey and his Queensland counterpart David Janetzki have both argued for a fairer GST distribution system to ensure all Australians receive equitable services regardless of their location.

Mr Janetzki said the current system produced “perverse outcomes”.

“Jim Chalmers now has a clear choice. He can continue to defend a broken system or finally stick up for his home state and the national interest,” he said in a statement.

South Australian Treasurer Tom Koutsantonis was even more scathing, describing the arrangement as “a dog of a deal” to the ABC.

“We do not want to disadvantage Western Australia, but neither do we want one state to have an unfair advantage relative to all others,” he said.

While WA will receive $9.3 billion from the GST in the distribution for 2026-27, NSW receives $26.1b and Queensland $18.4b.

Tasmanian independent economist Saul Eslake has been the most vocal critic of WA’s deal, labelling it Australia’s “worst public policy decision” for a State.

Mr Mookhey on Monday insisted the Productivity Commission interim report, which was damning to WA’s arrangement, as “historic”.

“I think what the Productivity Commission found was that right now we have a system in which some Australians are automatically entitled to either lower taxes or better services or both than the vast majority of Australians,” he told News24.

“I think the Productivity Commission report is historic. It’s an important milestone.”

In illustrating his point that there the GST system needed to ensure all Australians receive equitable services regardless of their location, Mr Mookhey used to contrasting examples of Cottesloe — one of Perth’s most wealthiest suburbs against the lower socio-economic South West Sydney suburb of Cabramatta.

“An Australian that lives in Cabramatta, is entitled to the same services as an Australian who lives in Cottesloe in West Australia, and that is the principle that we’re arguing for,” he said.

Mr Cook welcomed the PM’s emphatic support for WA’s current arrangement on Monday, telling reporters that “every Western Australian” would be “both relieved and pleased to hear the words from the Prime Minister”.

He had previously expressed his “anger” with WA Treasurer Rita Saffioti at the Productivity Commission’s report and called the authors behind it “east coast clowns” and insisted it penalised the risk the State took to establish a health resources sector.

While the Premier claimed Mr Albanese’s words “finalises this debate”, Mr Cook said he was conscious of east coast critics and declare that regardless of the guarantee, he wouldn’t complacent on WA’s fight.

“There is a lot of noise coming from the east coast,” he said.

“We understand that the Productivity Commission provided their interim report — which the (WA) Treasurer dismantled in the space of a short press conference — but we know that they’ve got a final report to make.

“We know that the debate is going to be ongoing. So we’re going to keep the pressure on.”

Mr Eslake, however, rejected WA’s claim that it shouldn’t be penalised for establishing the profitable mining sector — telling Politics Now on Monday afternoon that the State had just been “so richly endowed” with natural resources.

“Let’s be clear that the prosperity which Western Australia is now enjoying is not really, in any material sense, the result of decisions made by the current or previous Western Australian governments,” he said.

“It’s not as if Sir Charles Court and Sir David Brand put the iron ore under the Pilbara.

“And the gas under the Northwest Shelf. Or that Mark McGowan drove the price of those and other resources into the stratosphere.

“Most of the infrastructure that mining companies use to get their minerals out of the ground or from under the sea onto ships that take them to their customers is paid for by the mining companies themselves.”

“This proposition that Western Australia needs this money so that the government can provide the infrastructure which the mining companies use is just simply not supported by the Feds.

“The government has put buying votes in Australia’s richest state, which is what they’re doing above the national interest in a fairer and more equal Australia.”

Mr Eslake accused Mr Albanese of leading Australia down a path “more like the United States”, where what state you live in has a big impact on the quality of schooling, healthcare, policing, environmental protection or other community needs.

Mr Albanese tried to distance himself from the Productivity Commission’s report while in Perth, insisting it had always been part of the 2018 changes legislated by Mr Morrison which were always expected to be handed down by the end of 2026.

Recalling Mr Albanese signing a Perth reporter’s arm with the words “no change to WA’s GST” two years ago, Nationals leader Matt Canavan on Monday insisted he go further.

He had echoed claims from State Liberal leader Basil Zempilas that Mr Albanese had been careful with his language, shifting to saying “fair share” rather than “no change”.

“Given that the Prime Minister can’t be trusted on tax, he doesn’t need to scribble on someone’s arm. He needs a tattoo,” Senator Canavan said.

“The Prime Minister has been using the weasel words of saying that he will make sure that Western Australia receives ‘a fair share’, but those words don’t mean ‘no change’.

“We need a tattoo on the PM saying he will ‘not change the WA GST deal’.”

Every state and territory bar one, including Senator Canavan’s LNP allies in Queensland, agreed that the current system rewarded some Australians more than others and that needed to change.

At the same press conference, Opposition leader Angus Taylor said the Coalition had long supported the arrangements for WA which a former Liberal government put in place.

“I’ve said that many, many times. I’ve been very clear on this,” Mr Taylor said.

“I tell you who you can’t trust on the GST. It’s this prime minister.”

Industry Minister Tim Ayres said the GST dispute was a “truism” of politics in Australia.

“It’s one of the truisms about Australian politics. There’s always going to be differences amongst the premiers about the way that … revenue collected by the Commonwealth is distributed,” he told the ABC.

“That’s business as usual. It’s not a surprise that there is that conflict.”

Labor’s most senior frontbencher in Perth, Resources Minister Madeleine King said she was “very much satisfied” with the PM’s commitment.

“The Prime Minister has been solid, as always, on his commitment to Western Australia. He has committed to not changing WA’s GST share. What more do we need to say? That’s solid,” she told reporter’s in WA’s South West.

“That’s a promise, and that’s really important, and it’s great for the State.”

Mr Albanese will host his Cabinet in Perth on Tuesday morning before the Prime Minister is expected to travel to Sydney in the evening.

He will then host the state and territory leaders at National Cabinet on Wednesday, where sexual violence, artificial intelligence standards, the H5 bird flu outbreak and the gun buy back scheme are expected to be on the agenda.