Eric Abetz criticizes 2018 GST redistribution deal

Tasmanian Treasurer Eric Abetz has criticized the 2018 Goods and Services Tax (GST) redistribution deal, calling it the ‘worst public policy decision of this century.’ Speaking at a Productivity Commission hearing, Abetz, a former member of the Turnbull government, described the overhaul as a ‘political fix’ that addressed a system that was already functioning correctly.

The 2018 deal was designed to protect Western Australia from a significant drop in its GST share. However, the Productivity Commission’s interim report labeled the arrangement a mistake. While the deal was initially projected to cost less than $5 billion, current forecasts suggest it could result in a $60 billion impact on the federal budget by the end of the decade.

Although the Morrison government implemented the changes, the current Albanese government has pledged to maintain the deal despite the commission's findings. Most Australian states and territories, with the exception of Western Australia, are seeking to either revert to the pre-2018 allocation system or implement significant reforms.