ACT vulnerable in GST grab

ACT Treasurer Andrew Barr says the national capital will lose tens of millions of dollars if the new bloc of conservative states is able to force change to the carve-up of the lucrative revenue stream.

Mr Barr accused the West Australian government of ''hoarding'' royalties, not being prepared to share the benefits of the resources boom with the rest of the country and being ungrateful after being bailed out previously by the larger states.

He was speaking after state and territory treasurers joined Wayne Swan in Canberra yesterday for pre-budget discussions, but the meeting was dominated by the spectre of changes to the formula for sharing GST.

Liberal treasurers said they were unhappy about the lack of federal consultation over the possible changes. Victorian Treasurer Kim Wells said, ''We want that GST revenue to flow to the states so we can decide on our priorities for how that GST money should be spent,'' adding that states did not want the federal government penalising them.

Mr Barr said Western Australia wants to put a floor under its GST relativity. ''This means they would get a minimum amount regardless of how well their economy is going and how much extra revenue the resource boom provides,'' he said.

''Essentially they are only prepared to share so much of the resources boom. They acknowledge they have to share some of it, but they're not interested in sharing much of it and that certainly does bring them into conflict with other jurisdictions in the country.''

Mr Barr said Western Australia and Queensland had been recipients of boosted GST payments, at the expense of NSW and Victoria, to develop their economies. But these states that benefited from a fortuitous wealth of resources did not want to share all those benefits with the rest of the country.

''It's a matter of geographical luck, if you like, whether you have resources within your boundaries or not, so it's a bit rich to be seeking to hoard all of those benefits,'' Mr Barr said.

''The principle of horizontal fiscal equalisation [of GST revenue] is based around ensuring that all Australians, no matter where they live, are entitled to an equal level of service provision.

''We don't support Western Australia's proposal and we do note the irony of a jurisdiction that once benefited significantly from HFE, now being in a position of an unprecedented resources boom, seeking to wriggle out of responsibilities to the federation.''

Mr Swan is sitting on an interim report from an independent panel examining the competing claims for changes to the GST distribution. He refused to share information with the treasurers, sparking a ''robust'' discussion.

''We had a pretty good discussion about the issues of GST distribution,'' Mr Swan said.

''I have made the commitment this morning that there will be plenty of time for us to have a subsequent meeting to talk not only about the draft report but also to talk about the final report.

''Historically we've employed what is called horizontal fiscal equalisation - what that has meant throughout our history is that the stronger states have always supported the weaker states to develop.

''Now, over time, those strengths change and of course the economies of Queensland has grown much more and the economy of Western Australia has grown much more.

''It was because of the concerns of WA that we appointed the committee which is looking at the GST distribution,'' he said.