The gloss has come right off Albo the Disaster now:
The states are demanding a new GST deal that would cost the Commonwealth another $5 billion a year, further straining Anthony Albanese’s claim that he would be better at wrangling the premiers than his predecessor Scott Morrison.
Already facing a multibillion-dollar battle with the states next week over the NDIS, and under assault from Queensland and NSW for cutting 50 road and rail infrastructure projects, the federal government now faces a demand to make permanent a temporary top-up to GST payments that is due to expire in 2027.
Victorian Treasurer Tim Pallas will lead a demand by all Labor and Liberal state treasurers to federal Treasurer Jim Chalmers at a meeting in Brisbane on Friday to extend the “no worse off guarantee” in relation to the states’ $91 billion GST carve up.
This is called “vertical fiscal imbalance”. It occurs when a government’s spending responsibilities do not match its revenue-raising capacity.
In Australia, this is just another negative externality made much worse by the population growth economic model.
The federal government gets all of the gains of a larger population in rising GST and income tax takes.
Meanwhile, states are lumbered with the costs of building infrastructure to keep pace. Which they cannot do, so both NSW and VIC are going slowly broke.
The latter faster than the former, so VIC is leading the charge against Albo the Disaster to get more cash to pay for its maniac public construction schedule.
Why the states don’t band together and demand either lower immigration or that the federal budget pay them $100k per head for every new settler is one of the enduring mysteries of the model.
In political terms, increasingly, everybody hates Albo the Disaster.
Even his Labor mates.
