How proposed GST changes would work

(Australian Associated Press)

 

HOW PROPOSED CHANGES TO GST CARVE-UP WILL WORK

* Transition payments

The Commonwealth will provide short-term, untied funding over the three years to ensure no state receives less than 70 cents per person per dollar of GST.

WA will be the only state to stay under this figure for the period (2019-20 to 2021-22).

The NT will also keep at least its existing share of GST.

* Phase in a new system

New benchmark (the stronger of NSW or Victoria) phased in over six years (2021-22 to 2026-27).

A GST floor would ensure no state can receive less than 70 cents per person per dollar of GST.

In 2024-25, this floor would be raised to 75 cents per person per dollar of GST.

The federal government would permanently boost the GST pool by making two more untied payments of $250 million and $600 million.

* Commonwealth Grants Commission

The commonwealth will direct the Grants Commission to make data and calculations publicly available and facilitate better public understanding of horizontal fiscal equalisation.

* Completing the transition

By 2026-27, the system would have fully transitioned to the new, more stable benchmark, as well as a 75 cents in the dollar floor.

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