Federal Politics

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MPs raise eyebrows at Abbott's GST call

TONY ABBOTT'S MPs in the smaller states were left red-faced yesterday after the Opposition Leader empathised with Western Australia's view that GST revenue should be distributed on a per capita basis, meaning the smaller states would be stripped of millions.

Winding up a visit to Perth on Tuesday, Mr Abbott said demands by the WA Premier, Colin Barnett, to change the way the GST is distributed warranted serious consideration. Before the mining boom, WA was a so-called mendicant state, which meant it received more GST revenue than it paid, at the expense of states such as NSW.

Since the boom, the royalties WA makes from mining, along with other factors, are taken into account by the Grants Commission which distributes GST money. WA is now a donor state and Mr Barnett is unhappy.

Mr Abbott's comments raised eyebrows among some of his MPs who worry about his penchant at times to adopt a populist line.

After the South Australian and Tasmanian governments complained yesterday that an Abbott government would strip their states of funding, which would hit vital services, Mr Abbott sought to explain.

''There are perceptions of unfairness. What we need is much greater transparency in this whole question of the distribution of funds between the Commonwealth and the several states,'' he said. ''That's what we really need. If there is greater transparency, then we will be in a much better position to judge what is really fair.''


The opposition senior frontbencher Chris Pyne, a South Australian, was taken to task on Adelaide radio. He said Mr Abbott was ''quite rightly concerned'' at WA's plunging share of GST revenue but did not promise to change the funding formula to a per capita model.

He said the South Australian Labor Premier, Jay Weatherill, should stop ''bleating'' and work out ways for the state to attract revenue of its own.

The review into the distribution of the GST released a draft report last week.

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