Question Without Notice No. 594 asked in the Legislative Council on 15 August 2018 by Hon Dr Steve Thomas
Parliament: 40 Session: 1
594. Hon Dr STEVE THOMAS to the minister representing the Treasurer:
I refer to the announcement by the federal government of a proposed new GST distribution regime on 5 July this year.
(1) Under the current forecast of economic conditions across the nation, at what iron ore price would Western Australia lose its position as the strongest fiscal economy?
(2) Which state would take over the position as having the strongest fiscal economy?
(3) Would Western Australia lose the position of having the strongest fiscal economy under current economic conditions, including projections of iron ore prices; and, if so, in which financial year is this predicted to occur?
(4) What modelling has Treasury done on this issue and will the minister either table it or provide a briefing?
Hon STEPHEN DAWSON replied:
I thank the honourable member for some notice of the question.
(1) For Western Australia to lose its position as the strongest state in 2021–22, as measured by state GST relativities, forecast iron ore prices would need to average about $US38 per tonne in 2018–19 and $US37 per tonne in 2019–20. The strongest state, as measured by state GST relativities, is based on an average of three years of lagged data. So the relevant data years for 2021–22—the first year the GST distribution system starts to transition to the new benchmark of the stronger of New South Wales or Victoria—are 2017–18, 2018–19 and 2019–20.
(2) It would be New South Wales.
(3) Western Australia is not currently forecast to lose its status across the forward estimates as the strongest fiscal economy.
(4) Following are the Department of Treasury's GST relativity projections consistent with the 2018–19 state budget. Longer term projections are highly sensitive to the assumptions used and less robust than estimates across the forward estimates. I seek leave to have the following information incorporated into Hansard as it is in tabular form.
Leave granted.
The following material was incorporated —