State Budget

The Hon. T.T. NGO (16:12): Supplementary: with the expected reduction in GST grants this financial year, is the Treasurer confident that he will still meet the surplus that he has talked about?

The Hon. R.I. LUCAS (Treasurer) (16:12): Mr President, the actual impact of the GST writedown is actually significant in 2018-19 but nowhere near as significant as in 2019-20. The best latest estimate that we have of the potential GST write-down in 2019-20 is $330-odd million. That's a combination of two factors: one is less money overall in the GST pool nationally, because—or less than predicted, I should say. That's because people haven't been spending as much money as has been estimated on goods which attract GST.

The second factor was the factor announced by the independent Commonwealth Grants Commission last month, which is whatever the size of the national GST pile is, what share South Australia and the other states get. They've actually written down South Australia's share for 2019-20 by a factor which has led to a significant reduction in our GST.

I might just comment and take the opportunity—because there has been some media attention to comments made by the Prime Minister today about the GST for South Australia. The statements that I have made in relation to the GST are of course, in my view, entirely accurate. The statements that the Prime Minister has made are also accurate, Mr President; they just highlight two different things.

The Prime Minister is correct to indicate that South Australia, and indeed all states, will see increases in GST next year as compared to this year. The writedown that we are talking about is that we were estimating, as all states were estimating, significant further increases in GST as a result of increases in the GST pool nationally and also retention of the relativities argument that the states incorporate into their forward estimates.

So, there is no inconsistency in the statements the Prime Minister made on morning media this morning. He is correct to say that next year we will get more than we get this year for GST, but it is significantly less than we had budgeted for in terms of the forward estimates in the budget, both in the Mid-Year Budget Review and in last year's budget.