Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Gichuhi for that question. The first point I would make is that the Productivity Commission, under its legislation, has to conduct its inquiries—and this inquiry focuses on the Australian community as a whole—which it is doing. Horizontal fiscal equalisation is a fundamental part of Australia's federation architecture and affects all states. It's important for all states and for the country as a whole that horizontal fiscal equalisation works effectively and supports our national economy appropriately. The terms of reference issued to the Productivity Commission specifically task it with considering the effect of horizontal fiscal equalisation on productivity, economic growth and budget management for all states and for Australia as a whole.

In relation to the way GST-sharing arrangements impact on Western Australia, it's a matter of public record that the Australian government considers that Western Australia's share of the GST, which was below 30 cents in the dollar at some point, is inappropriately low. This is why the Australian government has provided one-off top-up payments for three years in a row now to ensure that the effective share of GST doesn't drop below the 2014-15 level. The federal government has invested about $1.2 billion in additional funding in Western Australian infrastructure in that context.

But we've also said there is a need for a longer-term structural solution. The Prime Minister has suggested that, through COAG, at the right time in the future, a floor be considered. We've also initiated this inquiry through the PC. The report you mention is a draft report. There is no government position on it. The final report is due to come out in the new year, and the government will consider any findings and recommendations at that time and make decisions at that point. At this point, there is no government position in relation to a draft report.