The cost of the Morrison-era GST deal to protect Western Australia has blown out another 45 per cent.Credit:Alex Ellinghausen
As treasurer in 2018,Scott Morrison struck the deal that WA would receive a minimum of 70 cents of every dollar of GST raised within the state from 2022-23 before increasing to 75 cents in 2024-25.
It was in response to a collapse in WA’s share of GST pool,which in 2014 reached an all-time low of 30 cents for every dollar raised within the state. In 2023-24 its share is expected to be worth $86 billion.
When the policy was put in place,it was expected iron ore prices would fall and WA’s share of the GST pool would therefore rise. Instead,prices soared and have remained elevated ever since.
The Morrison government ensured other states and territories would not be worse off under the deal,requiring top-up funding from outside the GST pool.
The plan was originally forecast to cost federal taxpayers $2.3 billion over three years,including just $293 million in 2021-22,but the surge in iron ore prices has meant larger top-ups for longer.
Jim Chalmers on Tuesday revealed that by 2026-27,the deal is now forecast to cost federal taxpayers almost $30 billion. In the coming year,the government expects to spend $28.4 billion on public hospitals.
Compared to his October budget,the cost has climbed by 45 per cent. In 2025-26 alone,the forecast cost has jumped from $2.5 billion to $5.7 billion while Treasury is now expecting taxpayers to foot a $3.5 billion bill in 2026-27.