BHP’s backs WA’s push for increase in GST share

Shane Wright, Economics EditorThe West Australian
VideoMining giant BHP will support WA's push for a fairer share of GST revenue.

BHP has weighed into the GST debate, backing WA’s calls for an overhaul of the way the revenue is carved up between the States.

The mining giant argued it would boost jobs and be in the nation’s economic interests for WA to get a fairer share of the GST.

The head of BHP’s mineral operations in Australia, Mike Henry, will be the speaker at The West Australian’s next Leadership Matters event on June 26 and said the company backed any GST change that would encourage States to develop and invest in their natural resources.

“The flow-on effects of sensible reform would benefit jobs and investment in the resources industry and regional communities,” Mr Henry told The West Australian. “Reform would not only be good for WA, it would be in the national economic interest.”

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His comments came as new research from the Minerals Council showed just how the Commonwealth Grants Commission system had disadvantaged WA since the GST was introduced.

In the 2001-02 financial year, WA received $2.5 billion in GST grants.

This year it has received just $1.9 billion, a fall of 22 per cent even before the full impact of inflation and population growth is taken into account. It is the only State or Territory to suffer a fall in its GST take over the 15-year period.

By contrast, another mining State, Queensland, has enjoyed a 180 per cent lift in its GST share to $14.1 billion from $5 billion.

The Northern Territory’s GST take has risen 147 per cent to $3.2 billion. Even Victoria, which like WA receives less than a dollar-for-dollar share of the tax, has had a 145 per cent increase.

It will get $13.7 billion this year.

The worst performed of any other State or Territory has been the ACT but its GST share has grown 109 per cent to $1.1 billion.

“The GST distribution system isn’t working. It punishes States that develop their mining sectors and rewards States that don’t,” the Minerals Council said.

Premier Mark McGowan, in Tasmania for his first Council of Australian Governments meeting today, welcomed BHP’s intervention. He said he would use COAG to argue the national importance of making the GST carve-up fairer.

“The entirety of our iron royalties have been redistributed to other States and Territories, which means there’s just no incentive for us to develop more iron ore mines,” he said.

This week, Prime Minister Malcolm Turnbull met WA business leaders, including John Poynton, Nigel Satterley and Michael Chaney.

WA Chamber of Commerce and Industry chief economist Rick Newnham, who attended the meeting, described it as a constructive discussion about the GST.

“The Prime Minister listened intently and was very keen to discuss all the options for GST reform, and said he would continue to participate in an open dialogue on GST going forward,” he said.

The BHP Billiton Nelson Point port operations in Port Hedland
Camera IconThe BHP Billiton Nelson Point port operations in Port Hedland Credit: supplied

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