Australia

Treasurer approves revised GST spread

Federal treasurer Josh Frydenberg has approved changes to how GST revenue will be shared between states and territories next year.

Queensland, South Australia, Tasmania and the Northern Territory will get a smaller portion of GST revenue in the coming financial year after Treasurer Josh Frydenberg signed off on a revised carve up.

The Commonwealth Grants Commission - the independent body which oversees GST distribution - revised its forecasts for how $69 billion in GST revenue will be shared in 2019/20 in a report published this month.

Under the changes, Queensland, SA, Tasmania and NT will get lower shares as they will each be earning more of their own income than earlier predicted in the three years to 2017/18.

The dip will be most significant in Queensland, whose GST share will fall from 22 per cent in 2018/19 to 21.1 per cent next year.

The other states and territories with a smaller share will each receive 0.1 per cent less, which will still mean more money overall from a larger GST pool.

A greater share of GST will also go to NSW, Western Australia and the ACT in 2019/20, as they rack up less of their own income.

Victoria is also due to make more of its own revenue in 2019/20, in part due to strong growth in home sales.

Yet its GST share will increase slightly from 25.6 per cent to 25.7 per cent with revenue gains offset by higher service delivery costs in the state, including wages.

State and territory payments will also be topped up by the federal government, under a package that cleared parliament in November.

Mr Frydenberg says he's given the latest forecasts the green light after speaking with states and territories.

"Going forward, every state and territory will be better off as a result of the legislation that the coalition government passed in 2018," he said on Friday.

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