Compared to what was forecast in last year's federal and state budgets,NSW alone faces a GST shortfall of $10 billion over four years while Victoria could be $8.4 billion worse off.
The smaller states and territories that rely more heavily on GST for their day-to-day funding are at substantial risk. The Northern Territory,where GST accounts for more than 42 per cent of revenue,faces a $1.5 billion shortfall.
GST expectations had already been cut by $10.4 billion out to 2022-23 in thefederal government's mid-year update released in December.
But the July fiscal and economic update from Treasurer Josh Frydenberg revealed even sharper falls in the GST pool,which is funnelled to the states and territories. In the just-completed 2019-20 financial year,$5.2 billion was wiped from the forecasts while for 2020-21 they were sliced by $7.6 billion.
The drop this year will cost the NSW budget about $2.2 billion while Victoria's budget will be $2 billion worse off.
The damage continues on through the rest of the decade.