An internal Labor battle over the annual GST cut has escalated as Victoria’s treasurer accuses NSW of being a ‘welfare recipient’ in response to its claims the most populous state has been shortchanged.
The Commonwealth Grants Commission on Tuesday published the recommended 2024/25 GST distribution, with national spending projected to grow to $89 billion from about $85 billion in 2023/24.
Under the distribution, NSW and Queensland’s share of the GST pool will fall because rising coal royalties have put them in stronger budget positions.
Victoria is set to receive almost $3.7 billion more than in 2023/24, while NSW will receive $310 million less.
The cut has sparked a civil war between the Labor states, with NSW Premier Chris Minns on Thursday describing Victoria as a welfare state that takes ‘money out of the pockets of NSW families’.
Victorian Treasurer Tim Pallas has returned fire after the NSW premier hit his share of the GST
Victorian Treasurer Tim Pallas fired back on Friday, saying not a single dollar of NSW GST was making its way south of the border and calling Mr Minns ‘mathematically challenged’.
“He might not be the sharpest tool in the shed, but he’s a tool,” he told reporters in Melbourne.
‘He has completely misunderstood the GST break-up.’
Referring to Mr Minns’ ‘welfare state’ barbs, Mr Pallas suggested NSW had been an infrastructure ‘welfare recipient’ from the Commonwealth at Victoria’s expense for decades.
“It’s just so Sydney of the Premier of NSW to scream outrage at the fact that we’re close to getting a fair GST share and bemoan Melbourne’s success,” Mr added. Pallas.
‘It degrades him, it degrades his condition.’
But the NSW premier doubled down on his criticism, repeatedly questioning whether the unfavorable carve-out was ‘planned or accidental’ and saying the entire GST system needed to be fixed.
“The only thing worse than Victoria taking our money is them crying about it afterwards,” he told reporters on Friday.
Minns has called for the GST to be broken down on a per capita basis, with additional funds distributed via grants to states and territories that needed additional support.
Such a system would benefit the larger states, which receive less in GST per per capita than they raise, but would lead to South Australia, Tasmania, the ACT and the Northern Territory pocketing smaller pockets.
Chris Minns does not expect the GST meeting between state and federal treasurers to be friendly
“When the states sit down to eat, NSW can’t eat last every time,” Mr Minns said.
“This is public money, it’s not government money, it’s owned by the people of Australia and it should be distributed fairly.”
But the idea has been shot down by Mr Pallas.
“It really just drips with entitlement and selfishness,” he said.
He also said Victoria remained committed to remitting some of its GST to poorer states.
The war of words could set up an awkward virtual meeting between state and federal treasurers on Friday.
Minns said he did not expect the meeting to be friendly, but Treasurer Daniel Mookhey had no choice but to put forward the best case as key negotiations continue on deals on education, health and infrastructure funding.
Federal Labor frontbencher Jason Clare was not surprised by the friendly fire, saying the same ‘argy-bargy’ takes place every year when the Grants Commission delivers its independent decision.
“I’m old enough to remember Bob Carr making the same argument to John Howard,” he told Seven’s Sunrise programme.
Deputy Opposition Leader Sussan Ley called the GST fight ‘blokey’ and urged state leaders to have constructive talks.
“It all sounds a bit loud and loud and I would suggest to the Labor leaders that maybe they turn down the testosterone,” she said.