Victoria has set up a public inquiry to ask if it’s getting a fair share of the goods and services tax as changes to carving up the money come into effect this year.
The Legislative Assembly’s Economy and Infrastructure Committee is set to weigh up the federal government’s support for Victoria in the wake of reforms to the GST.
Those reforms have changed the distribution of GST from the 2021-22 financial year onwards and include a “floor” where states and territories receive at least 70 cents in the dollar from next financial year.
The changes, introduced by the Turnbull government in 2018, followed Western Australia receiving 30 cents in the dollar in 2015-16 while other states and territories with far smaller populations received more.
Disagreement among states over GST revenue flared up this month when Western Australia revealed it would deliver a budget surplus, boosted by higher-than-expected GST revenue.
The GST reforms include a guarantee that no state will be “worse off” under the new system.
Victoria’s committee is set to review the guarantee, which is legislated until 2026‑27 when a transition period ends.
The adequacy of other types of commonwealth support for Victoria could also enter into the committee’s review.
Public submissions to the inquiry are open until 29 October 2021, with the committee set to table its report by March 2022.