McGowan blasts Canberra 'dysfunction', warns WA's GST deal at risk
Advertisement

McGowan blasts Canberra 'dysfunction', warns WA's GST deal at risk

Premier Mark McGowan blasted the federal government in parliament this afternoon, labelling the federal Liberal party dysfunctional and seizing on comments by Treasurer Scott Morrison that Peter Dutton's proposal to remove GST on electricity would scuttle a deal to fix WA's GST distribution.

Mr Morrison said the plan was an "absolute budget blower" and could cost the budget $7.5 billion over the next four years.

Premier Mark McGowan has told parliament Western Australians would never forgive the Liberal party if they abandoned plans to fix the GST.

Premier Mark McGowan has told parliament Western Australians would never forgive the Liberal party if they abandoned plans to fix the GST.Credit:AAP Image/Tony McDonough

This would mean the federal government's $4.7 billion plan to rejig the GST so WA received at least 70 cents back from every dollar it paid from next year, before lifting the "floor" to 75 cents by the middle of the next decade, would be in jeopardy, according to Mr Morrison.

Mr McGowan said he was "bewildered and shocked" by the attempt by Mr Dutton to roll Prime Minister Malcolm Turnbull on Tuesday.

Advertisement

"The potential damage out of this dysfunction is greater to Western Australia than to any other state," he told parliament.

"The crisis within the federal government has put the GST deal that we secured for Western Australia under threat."

Mr Morrison said any change to the GST on household electricity would have to be negotiated with the states.

"Any change to the GST, as you know, to its rate or its base, has to be agreed by all states and territories and I'm sure that they would say – well, if you want to do it, that's fine, send us $7.5 billion," he said.

"That would be a budget blower, an absolute budget blower."

Mr McGowan said Treasurer Ben Wyatt had sent a letter to Mr Morrison ugently requesting a guarantee the federal government would deliver its GST fix no matter who was leader.

Federal Labor opposition treasury spokesman Chris Bowen said cutting GST on household electricty bills was a "crazy and dangerous idea".

"This could be government policy within days," Mr Bowen said.

Loading

"This idea would be a 'budget blower' for states and territories trying to run schools and hospitals.

"Taking $32 billion out of the GST revenue pool would also scuttle any deal to move to a new GST distribution model."

Nathan covers state politics for WAtoday. He is a former editor of the Mandurah Mail, where he also covered politics for Fairfax's regional titles.