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Morrison’s GST offer high risk, low yield for Tasmania

5 Jul 2018

Cassy O’Connor MP | Greens’ Leader

The GST offering the Tasmanian Liberals are so eager to defend is a high risk, low yield arrangement that places the State at future financial risk.

What is on offer is a $17 million boost in 2021-22, which is 0.6% over our estimated $2.76 billion in revenue in that financial year.

It is not clear what the additional revenue to the States is being benchmarked from, increasing the uncertainty.

Tasmanians who recognize the fairness of the current GST carve up need to know whether the Turnbull Government has used modelling that solely looks at the impacts of the methodology change as well as the booster payments, or if it also includes updated estimates based on an increase in the GST pool.

Even if this is not the case, the modelling appears to rely on voluntary, periodic top-ups to the pool.  This is the begging bowl scenario the Premier claimed to want to avoid.

Ultimately, it looks like this deal will put Tasmania at the mercy of Federal Treasurers in perpetuity.

The small increase in revenue we will receive, if it can be taken at face value, provides no ongoing certainty and puts future State budgets at considerable risk.

While Tasmania may get tens of millions in the short term, the trade-off is permanent uncertainty and an ongoing risk of losing out on hundreds of millions.

This deal appears to be a dud.  The Premier and the Treasurer are talking it up, but they’re trying to put lipstick on a pig.

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