Western Australia is estimated to receive $6,482 million in GST in 2023-24. This would be an increase of $254 million compared to 2022‑23. The change reflects Western Australia’s assessed needs for GST and its share of the growth in the GST pool. It also reflects the application of the 0.7 GST relativity floor, which increases the GST distributed to Western Australia’s and reduces the GST distribution to all other states.
GST distribution in 2023-24
Key factors that affected Western Australia’s GST needs in 2023-24 compared with 2022-23
How Western Australia compared with other states and territories
Western Australia’s capacity to raise revenue from its own taxes is higher than the national average. For example:
The characteristics of the people living in Western Australia mean that the cost of providing government services is higher than the national average. For example:
Overall, the higher relative revenue raising capacity of Western Australia outweighs its higher relative cost of providing services. It therefore receives a per person GST allocation below the national average but equal to the floor of 0.70.
How the GST is distributed
The Commonwealth Grants Commission provides independent advice to the Commonwealth government on how GST should be distributed to ensure each state has a similar capacity to provide services. The amount of revenue each state can raise differs because it depends on things like the value of mining production, property transactions and taxable payrolls. The cost of providing services varies too, based on things like a state’s size, its geography, where its residents live and their age, health and wealth.
Changes to the GST distribution in 2023-24 reflect the 2018 GST legislated arrangements. These include implementation of a GST relativity floor below which no state’s GST revenue sharing relativity can fall and Commonwealth top ups to the GST pool. The Commonwealth also makes separate transitional no worse off payments to the states.