WA budget delayed one week: Nahan

Hear the podcast of Mike Nahan's interview at the Success & Leadership forum last week here:

The delivery of the state government’s budget will be delayed one week to account for uncertainty in the distribution of the GST, Treasurer Mike Nahan announced today.

It will mean the key document outlining the state’s finances will be revealed on May 14, but the change won’t impact the state's finances in practical terms or delay the start of the budget's operation.

The Commonwealth Grants Commission’s recommended distribution is usually published in early March, but this year has been delayed until a meeting of COAG treasurers on April 9.

The uncertainty around the distribution will mean the state government will not know its revenue numbers until that date.

Last week, Dr Nahan told Business News he would meet his federal counterpart, Joe Hockey, in mid-March to lobby for changes to the distribution mechanism, specifically to change the lagged measurement of royalties income over three years.

The current formula uses a moving average, meaning higher prices three years previously would be taken into account when determining Western Australia’s revenue profile.

“The delay would have meant a May 7 state budget would not have contained up-to-date estimates of WA’s GST payments,” Dr Nahan said today.

“This is clearly an impossible position given that the GST grant for 2015-16 is currently estimated to be $1.8 billion, representing about 7 per cent of the state’s revenue.”

He added that WA received just 37.6 cents of GST for every dollar raised, which he said was unacceptable.

That means the state received roughly 4.2 per cent of the estimated GST take this financial year despite containing more than 11 per cent of the nation’s population.