Western Australian Premier Roger Cook launched a blistering attack on the Productivity Commission's interim report on GST distribution, calling the authors "east-coast clowns" and warning that proposed changes could strip $6 billion annually from his state's revenue. The commission's findings have ignited a fierce battle over fiscal federalism that pits WA's resource-driven prosperity against demands from poorer states for a larger share of the tax pool.
The commission said Western Australia was the only state or territory to benefit from the 2018 changes to how the goods and services tax is carved up. Those reforms, implemented eight years ago, fundamentally altered how federal revenues flow to states and territories. The GST distribution is supposed to help each state and territory provide services and infrastructure to the same standard.
WA's Fiscal Advantage Under Scrutiny
The interim report said WA received enough GST revenue to meet 113 per cent of its assessed fiscal needs in 2024-25, compared with 98 per cent for other states. The federal government topped up the remaining 2 per cent. That disparity has become the flashpoint in a debate about whether states should be rewarded for economic performance or whether redistribution should prioritize equality of services regardless of state productivity.
Cook didn't mince words about what he sees as an assault on his state's economic success. Any changes to the GST distribution would unfairly punish WA for its success "simply to prop up other lazy states," he said. "It's a sign that these east-coast clowns simply do not understand Western Australia; they have no Western Australian representative, and no idea." He also said the Productivity Commission's report was "an attack on every hard-working Western Australian."
Cook described the commission's proposed options as "dodgy, deceitful, and quite frankly dumb." "I'm angry, Western Australians are angry, and we have a right to be," he said. The premier's combative stance reflects deep frustration in a state that has long felt its resource wealth subsidizes less productive regions.
Federal Assurances Meet Skepticism
Cook said he spoke with Prime Minister Anthony Albanese on Friday and that Albanese told him the arrangements in place for Western Australia would remain. "And this report, a product of the Morrison Liberal government's legislation, does not reflect the federal government's position," Cook said. "But we're taking nothing for granted. We are going to fight to keep Western Australia the strongest economy in the nation."
Before the interim report was released, Albanese said WA would get a "fair deal." "You will get your fair share, because your work and what you contribute to the national economy really counts," he said. Yet those assurances haven't quieted concerns that political pressure from multiple states could force a reversal.
WA Treasurer Rita Saffioti said reverting to pre-2018 GST distributions would remove about $6 billion in revenue from WA each year and disincentivise economic development. "It's simply illogical; it doesn't support economic growth," she said. "You'd expect a productivity commission to focus on policies that support productivity." Her point goes to the heart of center-right economic thinking: tax systems should reward productivity and growth, not penalize success to fund underperformance.
The Commission's Equalisation Argument
The commission argued in its interim report that the GST was intended to provide an equal quality of services across Australia, rather than punish or incentivise state developments. "Where a state receives a smaller share of the GST pool, it reflects a need for less support to deliver this level of services," the interim report said. That philosophy prioritizes redistribution over rewarding fiscal discipline and economic development.
The media conference held by Cook and Saffioti was evacuated after the fire alarm went off at Dumas House. "Yeah, while we're gone, they're going to take our GST," Saffioti said, jokingly.
Bipartisan WA Defense
Prominent federal WA Liberal MPs Andrew Hastie and Michaelia Cash said they had drawn a "clear line in the sand" that WA must be no worse off under any proposed changes. "Over our dead bodies will they take a cent from Western Australia," Cash said. "The WA federal Liberal team will not accept any outcome that leaves Western Australians worse off than they are today. That is our line in the sand, and we will not move from it."
Hastie said Albanese and Jim Chalmers had repeatedly promised to protect the deal. "We will hold them to that promise every day between now and the final report in December," he said. The final report is expected in about four months.
WA Opposition Leader Basil Zempilas said it was a "dark and dangerous day for Western Australia." "Roger Cook is asking us to trust Anthony Albanese for the long-term future of Western Australia and our fair share of the GST deal," he said. "Anthony Albanese, who backtracked on negative gearing, who backtracked on capital gains tax, how can any West Australian trust that he is not going to backtrack on what is right for West Australians?"
Eastern States Demand Reversal
Other states and territories have cried foul against the 2018 reforms, arguing they should never have occurred. NSW Premier Chris Minns said the commission's interim report was a clear indicator that change was needed. "Every state and every territory except Western Australia wants change, and I'd like to see it too," he said.
"We're now in a situation where Western Australia is so wealthy and so rich that they're competing and bidding on New South Wales Rugby League games and putting tens of millions of dollars on the table. That's how rich they are," he said. "I mean, you're seeing similar behaviour from Gulf States like Saudi Arabia and the UAE and Dubai. They're almost for the same reason because they're digging up natural resources and they've got billions of dollars to spend."
South Australia's Treasurer Tom Koutsantonis also said the system was unfair. "It's made Australia unfairer, and it's made Western Australia richer. Unfair," he said. Tasmanian Treasurer Eric Abetz argued that GST distribution should return to pre-2018 arrangements. "It is critical for Tasmania's capacity to fund our hospitals, schools, police, roads and the essential services Tasmanians rely on every day," he said.
Why This Matters:
This dispute tests fundamental principles of fiscal federalism and economic incentives. The 2018 reforms recognized that states shouldn't be penalized for developing their economies and managing their finances responsibly. Reverting to the old system would remove $6 billion annually from WA's budget, directly punishing the state for its resource sector success and sound fiscal management. That creates perverse incentives: why pursue economic development if the federal government simply redistributes the gains? The commission's final report in December will determine whether Australia's tax system rewards productivity or prioritizes redistribution regardless of state performance. For WA, it's a matter of fiscal sovereignty and the right to benefit from its own economic decisions. The outcome will shape state behavior for decades, either encouraging fiscal discipline and growth or cementing a system where success subsidizes stagnation.