Queensland submits plan to fix Canberra’s broken, unfair GST carve-up

• The Crisafulli Government has outlined a blueprint for an improved GST carve-up that gives Queenslanders their fair share.
• Submission to Federal Productivity Commission inquiry urges reforms to stop penalising states that support economic growth.
• Queensland was short-changed again in Canberra's latest GST carve-up, and is the only state to receive less GST than three years ago as the rest of the nation surges ahead.
• Fixing GST could save Canberra billions and support federal funding for hospitals, schools, housing and transport.

The Crisafulli Government has delivered a blueprint to fix the nation’s flawed GST distribution system and ensure states that develop industries in the national interest receive their fair share.

Queensland’s submission to the Federal Productivity Commission inquiry into the 2018 GST distribution reforms demonstrates how the existing system is unfairly punishing the Sunshine State for contributing to the national economy and fuel security while rewarding states which restrict or block development.

Despite having the nation's highest net interstate migration and increasing demands for essential services, Queensland was short-changed again in Canberra's GST carve-up after being allocated less GST in 2026–27 than 2023-24, compounding the significant challenges left by the former Labor Government after a decade of fiscal vandalism. 

In contrast, the national GST pool has grown by nearly 20 per cent, Victoria’s GST is up 47 per cent, Western Australia is up 43 per cent.

Queensland’s share of GST has declined in 7 of the 8 years following the 2018 reforms, leaving the state short-changed to the tune of billions of dollars that could be spent on delivering a fresh start for Labor's Health Crisis, Labor's Housing Crisis, Labor's Youth Crime Crisis and Labor's Cost-of-Living Crisis. 

The Crisafulli Government is securing new investment and opportunities to deliver a better lifestyle through a stronger economy to reverse the former Labor Government's decade of decline. 

Treasurer David Janetzki said the Albanese Government had an opportunity to fix the GST distribution system for the benefit of all Australians.

“We’re making a constructive contribution to this debate, and we are calling on Federal Treasurer Jim Chalmers to deliver a fairer system for his home state and the whole nation,” Treasurer Janetzki said.

"The GST distribution system is supposed to ensure governments can provide similar essential services and infrastructure to all Australians no matter where they live but current system isn’t delivering on that promise for Queensland.

“The Commonwealth Grants Commission’s (CGC) broken methodology needs reform to recognise the challenges of servicing Australia’s most decentralised state."

Queensland’s proposal for a simpler, better and fairer GST distribution includes:

• Introducing a Canada-style discount to the CGC’s mining assessment to support all states developing their resource industries in the national interest.
• Quarantining federal funding for nationally significant projects, including the Bruce Highway, and major funding streams such as national health reform payments to ensure the state disadvantage recognised in these payments is not unwound by the CGC.
• Embedding simplicity, transparency, predictability and removing impediments to reform as key principles in the CGC’s decision making processes.
• Making the No Worse Off Guarantee permanent if 2018 reforms are retained.

Treasurer Janetzki said the submission called for the nation’s GST mining assessment to be appropriately discounted to reduce excessive GST penalties on states that develop resources industries.

“States that develop their natural resources — creating jobs, supplying energy and supporting the national economy — are heavily penalised, while states that block development are given more GST,” Treasurer Janetzki said.

“A Canada-style mining discount will mean all states are treated equally and aren’t punished for supporting industries in the national interest.”

If the 2018 reforms were replaced with Queensland’s simpler and fairer proposals, billions in Canberra savings could be unlocked which could be directed to national issues like delivering for the thousands of patients stranded in hospitals waiting for aged care placements.

Independent advice by the Queensland Productivity Commission found Australia’s GST system creates poor incentives for growth-enhancing policy and allocates less GST to each Queenslander today than 2002–03, in real terms.

Queensland’s submission to the Federal Productivity Commission, and the QPC’s interim advice on the economic impacts of the current GST distribution system can be found at https://www.treasury.qld.gov.au/research-and-publications/reviews-and-inquiries/

ENDS

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