Changes to Australia's GST distribution formula, particularly impacting Western Australia
Consensus Summary
The articles all cover changes to Australia's Goods and Services Tax (GST) distribution formula, particularly the impact on Western Australia (WA). There is a consensus that WA will receive significantly more GST revenue than it would have under the previous formula, thanks to a 2018 deal that guarantees WA a minimum share. This deal is expected to cost taxpayers $60 billion over the next five years, with the federal government providing 'top-up' payments to ensure other states and territories do not lose out. The articles also report that New South Wales will see its share of the GST decrease, while Queensland's share will increase. However, there is a contradiction between the ABC and Guardian articles regarding the extent of NSW's decline. Overall, the articles highlight the ongoing debate around the fairness and transparency of Australia's GST distribution system.
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Key details reported by multiple sources:
- Western Australia will receive $9.3 billion from the GST in the 2026-27 financial year, much more than the $2.7 billion it would have received if it followed the same rules as every other state and territory
- The GST deal is expected to cost taxpayers $60 billion in the next five years
- New South Wales will see its share of the GST fall from 26.7% to 25.5%, while Queensland's share will increase from 17.4% to 18%
- The federal government will provide 'top-up' payments of $5.5 billion in 2026-27 to ensure no jurisdiction is left worse off under the GST deal with Western Australia
Points of Difference
Details reported by only one source:
- The deal was extended by the Albanese government and means the federal government will pay extra from its non-GST revenue every year to ensure other jurisdictions do not lose out under the new arrangements
- Western Australia would have had a score of just 0.24 under the same system, meaning it would get less than a quarter of its population share, mostly reflecting its very high capacity to collect mining royalties
- Before 'no worse off payments' - a commonwealth payment ensuring no state is worse off than before 2018 - all states other than Western Australia were estimated to receive less than under the previous GST distribution arrangements
- Queensland's GST share was more significantly reduced in 2026-27 than in 2025-26 under the 2018 legislative amendments
- To ensure no jurisdiction is left worse off under the deal, the commonwealth provides 'top up' payments which totalled $5.5bn in 2026-27, bringing the cumulative cost to the budget since 2018 to $36bn
- Excluding the impact of the 2018 legislation, NSW's relativity would have been 0.89
Where the reporting differs
Details that conflict, or appear in only some outlets:
- The ABC article states that NSW's share fell from 26.7% to 25.5%, while the Guardian article states that NSW's relativity fell from 0.86 to 0.82, which is still higher than the 0.82 score reported in the ABC article
Source Articles
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.
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
Tax deal costing Aussies $6.6bn
Millions of Australians are being “shortchanged” on tax, leaders have warned, while one state booms.
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