Federal Budget

The Hon. D.G.E. HOOD (15:10): My question is for the Treasurer. Given that the federal budget will be delivered tonight, does the Treasurer have any insight into the GST distributions that we can expect over the forward estimates?

The Hon. R.I. LUCAS (Treasurer) (15:10): Certainly, there has been a lot of financial and economic commentary about the state of the national economic recovery and the flow-on impacts, potentially, on GST numbers to be released tonight in the federal budget. We are not advised prior to the release of the figures at 7 o'clock tonight, although Treasury officers are in lock-up, I think, as we speak, in terms of being briefed on the details of the federal budget, including, clearly, the revenue projections on GST.

I think, certainly from the publicly available information from the federal Treasury secretary and the federal Treasury, that the national economic recovery has been a credit to the commonwealth government, the federal Treasury, the Reserve Bank and indeed all involved in managing the COVID-19 crisis infinitely better than virtually every other jurisdiction around the world. The flow-on impacts of that have meant that restrictions have been eased much more quickly in Australia, and in South Australia, than, again, in most other jurisdictions around the world.

The flow-on impact of that has been the extent of engagement of industry sectors returning to pre-COVID levels in many respects, with the exception, of course, of those that are directly impacted by international travel bans. Tourism, hospitality and international education in particular are industry sectors that continue to be impacted by international travel bans and will be whilst those bans remain in place.

We are expecting that the national GST pool will significantly recover in the figures that are released tonight. It may well be that they actually return to pre-COVID estimates in terms of the size of the national GST pool, which will be of enormous benefit not only to the national economy but to each of the states and territories in terms of the size of the GST cake that has to be distributed, bearing in mind that I think this time last year for this year I think we were predicting a decline in GST revenue from pre-COVID levels of about $1.3 billion.

We believe that the national GST pool impacts will be significantly removed from that; that is, we will see a significant increase in projected GST income for South Australia for next financial year and also some increased GST revenue for this financial year. However, in South Australia's case the other impact, which is the slicing up of the cake by the Commonwealth Grants Commission, will mean that those impacts will continue to be felt by South Australia. We will still see lower GST collections compared to the pre-COVID estimates, potentially not because of the size of the national pool but because of the way the cake is actually cut up and distributed between the states and territories by the Commonwealth Grants Commission.

From that viewpoint, we are hoping that tonight's federal budget will reveal a GST pool that has grown significantly because of the economic recovery, and secondly, that therefore the size of the decline in the GST estimates for South Australia will be significantly less, but nevertheless there will still be a not insignificant GST reduction that we will have to continue to incorporate in our budget estimates when we bring our budget down in June.