GST carve-up leaves NSW worse off as WA secures extra $5.5bn
Mar 12th 2026
A 2018 law that guaranteed Western Australia a larger GST share has reduced New South Wales's per person GST entitlement in the 2026-27 allocation, prompting political backlash and a national review.
- The Commonwealth Grants Commission recommended dividing a projected $102.5bn GST pool for 2026-27, with NSW set to receive $26.1bn.
- NSW's GST share per head falls from a relativity of 0.86 to 0.82 even though its dollar allocation rises slightly.
- Western Australia benefits from a 2018 law guaranteeing it a minimum GST share, receiving the same 0.82 relativity as NSW instead of a calculated 0.25.
- The federal government will provide top up payments of $5.5bn in 2026-27 to support the WA deal, bringing cumulative cost since 2018 to about $36bn.
- NSW premier Chris Minns called the system unfair and urged a population-based approach, while CGC chair Mike Callaghan defended the calculations and said historical comparisons must exclude the 2018 change.
- Economist Saul Eslake described the 2018 WA deal as a major policy mistake that increases WA surpluses at the expense of other states.
- The Productivity Commission is reviewing the 2018 reforms with an interim report due in August and a final report due by the end of the year.