The Albanese government is facing calls to reassess how Goods and Services Tax (GST) revenue is distributed among Australia’s states and territories. A recent allocation will result in New South Wales receiving $1.5 billion less than Victoria, despite having a population approximately 1.5 million larger.
Expert Insight:
The Commonwealth Grants Commission, responsible for overseeing the $103 billion GST distribution, has stated that all states and territories will receive more GST in the 2026-27 financial year due to forecast revenue growth.
Western Australia is set to benefit significantly from the latest distribution, with its share increasing from 8.3 per cent to 9.1 per cent. Queensland will see the largest dollar increase, receiving an additional $1.7 billion.
Did You Know?
Despite its larger population, NSW will receive only 25.5 per cent of the national GST pool. The Commission attributed this reduction to above-average land value growth in NSW, increasing its capacity to raise land tax, and lower-than-estimated spending on natural disaster relief.
Victoria, whereas seeing a slight decrease in its overall share, will still receive $1.5 billion more in GST revenue in 2026-27 than it did in the previous year, and will receive $1.7 billion more than NSW.
Frequently Asked Questions
What is the GST?
The GST is the biggest single source of revenue for state governments, and the Commonwealth Grants Commission oversees how the $103 billion GST pot is allocated.
Which state is receiving the largest increase in GST revenue?
Queensland will receive the largest dollar increase in GST distribution, with an additional $1.7 billion.
Why is NSW receiving less GST than Victoria?
The Commission stated that NSW’s decreased share is due to “above-average growth in land values” and lower spending on natural disaster relief than previously estimated.
As states navigate their budgets, the GST distribution will undoubtedly remain a key factor. It remains to be seen whether the current formula will continue to satisfy all parties, or if further adjustments will be considered in the future.
