NSW ‘big budget winner’ despite $2b GST cut: treasurer

Alex Mitchell |

Treasurer Jim Chalmers says NSW fared really well out of the federal budget.
Treasurer Jim Chalmers says NSW fared really well out of the federal budget.

States are split on the latest federal budget, which has left the nation’s most populous jurisdiction almost $2 billion worse off in a cut to its GST distribution.

Western Australia says nearly $20 billion in funding support will help the state become a “world leader in the downstream processing of critical minerals”.

But NSW is a loser from the annual GST distribution set out in the budget papers, which say it will receive $1.9 billion less in 2024/25 than had been projected a year earlier.

Treasurer Jim Chalmers laughed off suggestions he had let down his NSW Labor counterpart Daniel Mookhey, adding that states complaining about being underfunded in a budget was “a story as old as federation”.

“NSW does really well out of the budget, heap of new infrastructure projects with a big emphasis on western Sydney, new housing investment, new health investments … some of the GST is down because consumption is down and that applies to everyone,” he told Sydney radio 2GB on Wednesday.

“If you look right across the budget, NSW are big winners out of our budget, billions and billions of dollars in new investment including in infrastructure in western Sydney.”

Mr Mookhey previously warned NSW would likely lose its top-line AAA credit rating if federal support dropped as expected, pushing the state budget into the red.

NSW Premier Chris Minns repeated calls for GST to be distributed on a per-capita basis, which would leave his state substantially better off but would cut funding for smaller jurisdictions.

“I’m happy that the commonwealth government has listened to NSW about some key road and infrastructure funds for western Sydney in particular,” he said.

NSW Premier Chris Minns
NSW Premier Chris Minns repeated a call for GST to be distributed on a per-capita basis. (Dan Himbrechts/AAP PHOTOS)

NSW was still hopeful of “fruitful” discussions on upcoming health and education funding deals, despite the GST shortfall, Mr Minns added.

However, it was a different story across the Nullarbor as Western Australian Premier Roger Cook congratulated the federal government on Tuesday night’s fiscal roadmap.

A 10 per cent production tax credit for critical minerals producers, worth $17.6 billion over 14 years, is expected to deliver a big win for the resource-rich state.

Along with $6.7 billion in tax incentives for hydrogen production and $2 billion in a program driving green iron and steel development, Mr Cook viewed the budget as a “vote of confidence” in WA.

‘”I congratulate the government for its foresight and vision to assist WA in becoming a world leader in the downstream processing of critical minerals and production of renewable hydrogen that will be essential in transitioning the globe to a low-carbon economy,” he said.

“These commitments represent a big vote of confidence in the future of WA’s powerhouse resources sector, and acknowledge its ongoing importance to the national economy.”

Several states will double-dip on power bill savings, adding the $300 in electricity credits announced federally to across-the-board reductions being rolled out in WA and Queensland.

AAP