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30 January 2010

NSW’s largest business organisation, NSW Business Chamber, has claimed a victory in its campaign to get a better deal for NSW in the distribution of GST revenue.

The Commonwealth Grants Commission (CGC) has altered its original draft GST distribution proposal from taking $400 million from NSW in 2010-11 down to $100 million.

NSW Business Chamber attempted to launch a billboard at Brisbane Airport at the start of February but was banned from displaying it.  The billboard, showing a couple on a beach, said “Welcome to Queensland…..Subsidised by the taxpayers of NSW.”  The banned billboard received significant media coverage and became a postcard and email campaign to NSW businesses and politicians.

“The campaign we launched earlier this month to draw public attention to this unfair proposal to rob NSW of $2 billion over three years in GST revenue has achieved its first victory by significantly cutting the loss of revenue to NSW,” said Stephen Cartwright, CEO of NSW Business Chamber.

“This improved outcome is the result of a strong partnership between NSW Business Chamber, other industry groups, the NSW Government and UnionsNSW to defend NSW from the draft proposal.

“NSW will still give away over $1 billion in GST revenue to the other states in 2010-11 and we will continue our campaign to get a fairer deal for NSW.

“This altered proposal does not change the fact that the CGC has created a reverse ‘Robin Hood’ formula – robbing NSW and Victoria to pay the resource-rich state of Queensland.

Mr Cartwright said over the past decade NSW has given $15 billion in GST revenue to the other States, and while NSW has a responsibility to assist the smaller economies of South Australia, Tasmania and the Northern Territory, NSW could no longer countenance supporting strong economies such as Queensland, Western Australia and the ACT.

“The complicated CGC distribution formula is more suited to a command and control economy than a modern, vibrant, international economy like Australia’s.

"The GST formula remains overly complex.  The Federal Government needs to go back to the drawing board with the CGC formula and create a new system that puts the larger State economies on a per capita footing while continuing to respect the need to support the smaller economies.”

Further details on the NSW Business Chamber GST campaign are available at www.nswbusiness.com.au/billboard.