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Row over GST on Power: FCC Grants Interim Relief to KEPZ Units
On Friday, the Productivity Commission released a scathing interim report labeling the 2018 GST deal a "mistake" that disproportionately favors Western Australia, recommending the government scrap or modify the current allocation system.
Former treasurer Scott Morrison established the 2018 system to bolster WA's GST share, backed by a "no worse-off" guarantee that the federal government extended to 2029 to protect other jurisdictions' funding.
The commission found the arrangement cost federal taxpayers $22 billion in funds directed to WA, creating "perverse outcomes" where WA gains revenue when New South Wales or Victoria experience natural disasters.
New South Wales Treasurer Daniel Mookhey labeled the deal an "expensive failure," while Western Australian Treasurer Rita Saffioti and West Australian Premier Roger Cook launched a campaign to protect the existing GST agreement.
Prime Minister Anthony Albanese pledged that WA would "get fair share" of GST, as the commission proposed three alternatives ahead of its final report due by year's end.