Premier Colin Barnett has used Prime Minister Julia Gillard's announcement that the government would review the distribution of revenue from the goods and services tax to promote his idea of a GST 'floor' of 75 cents.
Ms Gillard announced today a panel featuring former NSW Premier Nick Greiner, former Victorian premier John Brumby and South Australian businessman Bruce Carter would conduct the review.
Mr Barnett said he was convinced the current GST distribution arrangements were unsustainable.
"West Australians are willing to assist other weaker states through the GST carve up but we are not prepared to cop a return of just 68 cents for every GST dollar we pay, let alone the scenario we face in 2014-15 when we are forecast to receive less than 40 cents back for every dollar," Mr Barnett said in a statement.
Mr Barnett said his Liberal-National Government had long argued that there should be a floor at around 75 cents in the dollar.
"It would give WA more certainty over revenue and allow us to make the long term investment decisions a State like Western Australia needs. "
"If we had a 75 cent floor, the State would retain an additional $5.6billion in GST revenue over the next four years and would allow us to get on with the business of powering Australia's economy.
Ms Gillard agreed the current arrangements were not satisfactory, and the current distribution system struggled to deal with changing economic conditions and that mining growth increased a discrepancy in the revenue raised by states and territories.
"Instead of states facing penalties for economic growth and rewards for economic underperformance, the GST distribution process should encourage economic reform and better delivery of services, and provide states with certainty," a statement from Ms Gillard's office said.
"Under any changes that might be considered by the Government, we will ensure that smaller states continue to receive a fair share of GST revenue, and that states with larger economies are not unfairly penalised for success."
The review will provide an interim report to the treasurer by February 2012 and a final report by September 2012.
The Commonwealth Grants Commission will continue to serve as the independent umpire and make recommendations on the distribution of GST revenue.
