‘He is a tool’: the NSW and Victorian rivalry rears its head over the GST. What happened to the lovefest?
It’s not very often the Victorian treasurer, Tim Pallas, holds a press conference just to sledge someone – let alone another member of the Labor party.
But that’s what exactly what he did on Friday morning, with his comments set to make a meeting later that day between the federal, state and territory treasurers a little awkward.
Related: Queensland and NSW lose GST as taxpayers fork out $5.2bn for WA’s special deal
For almost six minutes, Pallas ripped into the New South Wales Labor government and it’s leader, Chris Minns, who he described as the “mathematically challenged New South Wales premier”.
“He might not be the sharpest tool in the shed but he is a tool,” Pallas said.
What was this all about?
Earlier this week, the Commonwealth Grants Commission announced that Victoria would get an extra $3.7bn in GST revenue in 2024/25, while NSW will get $310m less than it received this year.
The commission explained Victoria’s increase was “largely driven by its reduced capacity to raise mining revenue” at a time of high prices and its increased urban population and density.
On Thursday, Minns said NSW would go from receiving 94 cents for each dollar of GST it raised, to 86 cents under the new arrangement. His treasurer said it was the state’s largest single year reduction since the GST was introduced in 2000.
So, in an interview on Sky News, Minns described Victoria as a “welfare state receiving a whole bunch of money from the pockets of NSW families”.
But Pallas was having none of it.
In a statement released early on Friday morning, he said Victoria had paid more into the GST pool than it has received every year since 2000. He said over the two decades, Victoria has received as little as 84 cents in the dollar and averaged 91 cents.
“What’s more,” Pallas added in the statement, “Victoria’s relativity has been below New South Wales for 14 of the last 25 years.”
At the press conference, he doubled down.
“I know there’s a lot of maths in this, but put simply, we’re getting less than 100% in GST returns,” Pallas said.
“Unlike the NSW premier, we’re not being churlish about it. We don’t have this dripping sense of entitlement that seems to constantly come out of NSW, that if they’re not being given preferential treatment they cut up rough about the consequences.
“It’s just so Sydney of the premier of NSW, to scream outrage about the fact we’re coming close to getting a reasonable GST share and bemoan Melbourne’s success.”
Minns returned serve: “The only thing worse than Victorians taking our money is them crying about it afterwards, and this is exactly why we have to fix the system and move to a per capita system”.
The war of words from either side of the Murray River is a far cry from the days of the love fest between former Victorian Labor premier Daniel Andrews and NSW Liberal Dominic Perrottet.
The duo’s unlikely alliance helped the state push the federal government to reform to hospital funding, tax and early childhood education.
Now, its the federal government who has been forced to call for calm ahead of the treasurer’s meeting.
The federal treasurer, Jim Chalmers, issued a statement saying the GST allocation was decided by an independent body “at arms length” from the Albanese government, and it is “wrong to imply otherwise”.
Chalmers noted that it is “pretty standard” for states to want more money from the commonwealth.
“There is more than one jurisdiction with budget challenges. It is easy but wrong to blame the Commonwealth government for these pressures,” he said.
Meanwhile, for Western Australia, the GST deal will see it reap an extra $6.2bn and it will receive more than any other state on a per capita basis.
There’s one thing both Victoria and NSW agree on: they hate West Australia’s share the most.
