We've made good on WA's GST issue: PM

Prime Minister Malcolm Turnbull says his government has given WA some $1 billion over the past two years to help with its GST shortfall.

A GST scare campaign dogged Tony Abbott's electioneering in 2013.

On every day, in every state, in every city, the then Liberal leader was quizzed about his supposed plans to raise the GST.

Untrue, he repeatedly said.

Three years later any issue about the GST is limited to just one state - Western Australia.

WA Treasurer Mike Nahan last week turned on the state's federal Liberal MPs for not doing enough to lift its share of GST revenue, telling voters to back Palmer United Party senator Dio Wang for championing the issue.

Prime Minister Malcolm Turnbull gave the issue short shrift while campaigning in Perth on Monday, saying his government committed an additional $500 million this year and $500 million last year as a top-up for the state and "Western Australians know this".

"The (GST) formula will deliver WA a higher share in the years ahead and they understand that as well," he said.

Under the GST formula, it takes three years for a change in economic circumstances to be fully reflected in a state's revenue share.

The government was also dismissing research by the left-leaning Australian Institute that claimed the US tax man will be $8 billion better off as a result of company tax cuts here.

Because the US corporate tax rate is higher, US firms operating in Australia will have to pay the difference back home.

A key part of the May budget plans to reduce the company tax rate to 25 per cent from 30 per cent over the next decade.

"American firms operating in Australia will not invest more, employ more or be any more competitive after Australia cuts the company tax - they will simply pay less tax here and more tax in the US," the institute's Ben Oquist said.

But Finance Minister Mathias Cormann dismissed the commentary as factually incorrect.

"It's completely and utterly wrong and ill-informed," he told reporters in Canberra.

Labelling the institute as Greens-aligned, Senator Cormann said it was perhaps not the "most reliable witness" when it came to the effect of economic policy.

A small business survey by the Australian Chamber of Commerce and Industry shows that tax breaks do result in higher investment.

Plant and equipment investment has risen to its highest level in more than six years as a result of the $20,000 instant asset write-off offered in the 2015 budget.

"Small businesses have taken up with gusto the measures announced in last year's budget," chamber chief James Pearson told reporters in Canberra.

It also showed the decision in the May 3 budget to extend the instant asset write-off to businesses with a turnover of up to $10 million from $2 million was "the right one".


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Source: AAP



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