From the AFR, it’s good to have friends in high places:
Western Australia would receive hundreds of millions of dollars in additional GST revenue under a proposed revamp of the distribution system being modelled at the instruction of Federal Treasurer Joe Hockey.
The methodology, which would strip out the commodity boom years from calculations and might also benefit resources-rich Queensland, could be released as early as Thursday, at a meeting between federal, state and territory treasurers.
West Australian Liberal treasurer Mike Nahan said the loss of mineral royalty income linked to the plunging iron ore price needed to be recognised immediately in an increase of the GST carve-up.
While I’m not going to say that WA isn’t worthy of support, not least because in the larger picture the eastern states are the real economic parasites dragging down WA’s spectacular export performance, it’s still pretty poor form for the existing GST formula to be torn up just because Comrade Colin’s government is a comprehensive iron ore idiot but good mates with the Feds.
How does one say “moral harzard” when it comes to horizontal equalisation?
