Premier of Victoria website logo – The Hon Daniel Andrews – home

Report Slams Federal Plan To Dud Victoria On GST Funding

09 October 2017

The Productivity Commission draft report released today pours cold water on the recent thought bubble from Federal Treasurer Scott Morrison to punish states that have banned fracking and other forms of resource exploration.

The report – Inquiry into Horizontal Fiscal Equalisation – finds that punishing those States through reducing their GST distribution would “be an intentional breach of policy neutrality and state autonomy; be a source of additional complexity; and come at the expense of equity”.

It backs the Victorian Government submission regarding Horizontal Fiscal Equalisation (HFE), and contends that the equity objective of HFE is important and should continue being the basis for GST distribution.

HFE involves the distribution of Commonwealth financial support to the states so that each state has the capacity to provide its citizens with a comparable level of government services.

The Andrews Labor Government has been fighting for a fairer share of Commonwealth funding for Victoria, which has subsidised the federation since its inception.

The Labor Government has also been leading the charge on tax reform – abolishing stamp duty for first home buyers, reducing payroll tax for regional businesses, and introducing a stamp duty surcharge on residential real estate for foreign buyers.

The Government will carefully consider the Productivity Commission’s draft report to ensure that Victorians are not further short changed by the Turnbull Government.

Quotes attributable to Acting Treasurer Gavin Jennings

"Mr Morrison’s thought bubble to punish states like Victoria and NSW who have acted to protect their farmers, their world-class produce and their environment, has been thrown into the bin – where it belongs.”

“Yet again, Malcolm Turnbull and Scott Morrison want to talk about 'tax reform' while refusing to address the biggest tax reform issue in the community -- removing negative gearing to improve housing affordability".

Reviewed 19 August 2020

Was this page helpful?