Australia’s GST distribution dispute and Western Australia’s special funding deal
Consensus Summary
Australia’s GST distribution for 2026-27 has sparked controversy as Western Australia continues to benefit from a 2018 deal guaranteeing it a minimum share of the tax revenue, despite running budget surpluses. Under the ‘GST floor,’ WA will receive $9.3bn—far above the $2.7bn it would get under standard rules—while other states like NSW and Queensland receive less than their population share. The federal government is set to spend $5.5bn to $6.6bn on top-up payments to offset losses for other jurisdictions, with critics like economist Saul Eslake calling the deal unfair and costly, estimating $60bn in taxpayer expenses over five years. NSW Premier Chris Minns argues the system is outdated and unfairly penalizes wealthy states, while WA’s government defends the arrangement as necessary for its economic contributions. The Productivity Commission is reviewing the reforms, with findings due later this year, as debates continue over whether the GST should be redistributed based on population or need.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- The Commonwealth Grants Commission released GST distribution recommendations for 2026-27, projecting a total GST pool of $102.5bn (Guardian) or $103bn (News.com.au).
- Western Australia will receive $9.3bn in GST for 2026-27 under the 2018 GST floor deal, up from $8bn in 2025-26 (News.com.au, ABC).
- The 2018 GST reforms introduced a ‘floor’ guaranteeing WA a minimum GST share equal to NSW’s relativity (0.82) or 75c per dollar of GST revenue (Guardian, ABC, News.com.au).
- NSW’s GST share for 2026-27 is projected at $26.1bn, down from $26.7bn in 2025-26, with its relativity dropping to 0.82 (Guardian, News.com.au).
- The federal government will spend an estimated $6.6bn (News.com.au) or $5.5bn (Guardian) on ‘no worse off’ top-up payments to other states in 2026-27 due to WA’s deal.
- The Productivity Commission is reviewing the 2018 GST reforms, with an interim report due by August 28 (Guardian, News.com.au, ABC).
- Western Australia’s budget surplus in 2024-25 was $2.5bn, and it projects surpluses until 2028-29 (ABC).
- Victoria’s GST share will increase to $27.9bn in 2026-27, up from $26.4bn in 2025-26 (Guardian, News.com.au).
- Queensland’s GST share will rise to $18.4bn in 2026-27, up $1.68bn from 2025-26 (News.com.au, ABC).
- The total GST collected is projected to increase by nearly $6bn in 2026-27 compared to 2025-26 (ABC).
Points of Difference
Details reported by only one source:
- The cumulative cost to the federal budget since 2018 for WA’s GST top-ups is $36bn (Saul Eslake).
- WA’s relativity would have been 0.89 in 2026-27 if excluding the 2018 legislation impact (Mike Callaghan, CGC chair).
- Eslake described WA’s deal as the ‘worst policy decision of the 21st century’ and noted WA would still get the same relativity as NSW even if iron ore prices collapsed to $20/tonne.
- NSW’s relativity of 0.82 is the lowest since the GST was introduced in 2000 (Chris Minns, NSW Premier).
- The CGC’s complex calculations exclude the 2018 legislation impact for historical comparisons (Mike Callaghan).
- The federal government will spend $6.6bn on ‘no worse off payments’ and GST pool top-ups in 2026-27, up from $6bn in 2025-26.
- WA’s share increased by $1.3bn over 2025-26, bringing its total to $9.3bn (up from $8bn).
- NSW’s share increased by only $316m over 2025-26, with a total of $26.1bn.
- Queensland’s GST needs increased due to decreased mining royalty revenue from coal price dips and above-average wage growth.
- The CGC noted NSW delivers government services at rates below the national average (5% remote/regional vs 9.8% national).
- Queensland Treasurer David Janetzki called the distribution ‘second-rate’ and accused Canberra of ‘dudding’ Queensland.
- The $6.6bn cost to taxpayers under WA’s deal will total $60bn over the next five years (Saul Eslake).
- WA would have received only $2.7bn under standard rules, not $9.3bn (ABC’s emphasis).
- The GST distribution does not account for actual revenue/spending but uses ‘potential revenue’ and ‘need’ metrics.
- WA’s relativity of 0.24 under standard rules would be the lowest of all states (ABC’s calculation).
- WA’s ‘Keep the GST Fair’ ad campaign argues the deal supports the national economy via exports.
- NSW’s share fell from 26.7% to 25.5% of the total GST pie (ABC’s percentage breakdown).
Where the reporting differs
Details that conflict, or appear in only some outlets:
- The Guardian reports WA’s 2026-27 GST share as $9.3bn (via News.com.au/ABC), but the ABC explicitly states WA would receive $2.7bn under standard rules—not $9.3bn as the headline figure.
- News.com.au says the federal government will spend $6.6bn on top-ups in 2026-27, while the Guardian reports $5.5bn for the same year.
- The Guardian claims NSW’s relativity of 0.82 is the lowest since 2000, but the ABC does not reference this historical claim directly.
- News.com.au states Queensland’s GST share fell by $1.2bn in 2025, while the Guardian does not mention this specific figure for 2025.
- The ABC reports the total GST pool increase as nearly $6bn for 2026-27, while the Guardian and News.com.au cite $102.5bn/$103bn as the 2026-27 total (not the increase).
Source Articles
NSW emerges as main loser from GST carve-up as WA gets extra $5.5bn
NSW premier says latest distribution calculation, with a reduction in the state’s share of revenue relative to its population, is unfair and ‘past its use-by date’ Get our breaking news email , free app or daily news podcast Australia’s richest state will receive an extra $5.5bn in GST revenue thanks to a sweetheart deal struck with Western Australia in 2018, as the New South Wales premier attacked the latest distribution calculation as unfair and “past its use-by date”. The Commonwealth Grants
Western Australia the big GST winner again, despite massive budget surpluses
WA will get an extra $6.6 billion from taxpayers in the coming financial year under its special GST deal, despite being the only state with a budget surplus.
Tax deal costing Aussies $6.6bn
Millions of Australians are being “shortchanged” on tax, leaders have warned, while one state booms.
Latest cross-verified stories
Sydney Swans players linked to sexual assault allegations and club sanctions
Australia vs Bangladesh Test series in 2026, featuring historic upsets and batting struggles
Ukraine targets Wildberries warehouses and Russian infrastructure with drone strikes amid escalating war
Meta trial over social media addiction in children begins in California
Prince Harry and others ordered to pay legal costs to Daily Mail publisher after losing privacy lawsuit
Mass bird deaths linked to H5 bird flu in Australia’s southern states
Browse all stories from March 2026 in the archive.