Queensland will be pushing Canberra to change its GST funding distribution model. Photo: supplied
Victoria is expected to receive a lion’s share of GST revenue in 2025-26 even as Queensland’s falls.
And the Qld Government has vowed to fight the proposed shortfall.
The Commonwealth Grants Commission (CGC) released its recommendations on the distribution of GST revenue to states and territories in 2025–26.
The recommendations call for all states, except Queensland, to receive more GST than in 2024–25.
Victoria stands to receive an extra $3.7 billion, or $26.1bn, for the next financial year due to a lack of a coal industry and a growing population, the CGC says.
Queensland’s share will fall by $1.2bn to $16.6bn due to “significant” growth in its ability to earn coal royalties.
CGC chairman Mike Callaghan explains that the GST pool is estimated to increase from $91 billion in 2024–25 to around $95 billion in 2025–26.
“This is an important source of revenue for the states. The commission’s approach is designed so that the GST distribution is not influenced by states’ individual policy decisions,” he says.
Western Australia is due to receive almost $6bn more in GST payments in 2025–26 while all other states will receive no worse off payments.
Each state’s GST distribution varies from year to year, Callaghan explains, due to changes in a state’s economic and demographic status, changes in state populations and growth in the GST pool and to its methodology.
REACTIONS
Victorian Treasurer Jaclyn Symes welcomed the news.
“The commission confirms that our population and economy are growing. This has driven a need for more services and infrastructure which we are delivering,” she says.
“Last year, Victoria received the second-lowest total revenue per capita among all states and territories at just $13,500, across taxes, royalties, and Commonwealth grants.
“It’s why our position remains clear – we need to lock in the No Worse Off Guarantee. Without it, Victoria would be shortchanged by about $1.8 billion a year.”
- Qld wants Canberra to reject the proposed redistribution of its GST funding to Victoria and NSW.
Queensland Treasury estimates the impact would be a reduction in the state GST share of $5.3 billion over three years.
Treasurer David Janetzki wants the Federal Government to dismiss the proposal.
“This recommendation would severely compromise Queensland’s capacity to deliver essential services and infrastructure for our growing state,” he says.
“Queensland deserves better than this carve-up … Queensland should not be penalised because of our strong resources industry or our decentralised population.”
More details available at www.cgc.gov.au.
