‘How do they sleep at night?' Allan and Minns governments, experts demand Albanese fix GST

The Minns Labor government and its treasurer, Daniel Mookhey, have been pushing for an overhauled distribution model that would give states GST corresponding to their population.
'NSW will continue to argue for a fairer carve up of GST on a per capita basis,' a government spokeswoman told this masthead.
'That would include support for the smaller jurisdictions as required. This would help eliminate the wild fluctuations which hinder states from being able to properly budget for future GST contributions.'
Queensland's Coalition Treasurer David Janetzki warned Labor against 'locking in a Western Australia sweetheart deal for political reasons' and SA Labor Treasurer Stephen Mulligan argued the GST model gave WA 'an unfair financial advantage'.
Albanese and his ministers will spend two days in Perth this week and hold a cabinet meeting in a state that has received lots of attention from this government. Labor last week approved an extension of the North-West Shelf gas project off the state's coast, watered down a petroleum rent tax last term, and backed off on legislating a new environment protection agency last year, partly due to concerns from the mining state.
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Independent economists Saul Eslake and Chris Richardson want Labor to seize the moment to scrap the WA deal.
The cost blowout is the largest in the federal budget and only comparable with the NDIS, according to Eslake, who has been a frequent critic of the WA arrangement.
Eslake said Albanese's big win meant he did not require a group of seats in any one state to remain in power.
'This government didn't introduce the worst public policy decision of the 21st century. But they extended it, and they defended it. And if they are serious, then they have a chance to end it,' Eslake said.
'Given that Anthony Albanese and Jim Chalmers profess to believe in equality and in sound financial management, how can they sleep at night knowing they are giving the richest state in the country $8 billion more than it needs while simultaneously saying they can't afford to increase the JobSeeker allowance?'
In 2016, under pressure from the politically influential WA government, Morrison came up with a plan under which no state's GST share could fall below 75 cents for every dollar of the tax raised within its jurisdiction.
This was designed to offset WA's frustration that it had fallen to a much lower share than 75 per cent because the GST formula punished WA for its ability to raise billions in mining royalties.
The top-up was initially forecast to cost $2.3 billion over four years, but, combined with another policy to make sure no other states were worse off, the total package of changes combined to push the expected cost of Morrison's original plans to $60 billion by the end of the decade.
WA's GST share was expected to lift due to a forecast fall in iron ore prices and royalties, but that did not occur, baking in the costs to taxpayers across Australia. Unlike other states struggling to manage budgets, WA is projected to bank cumulative surpluses worth about $20 billion over the eight years to 2026-27.
Richardson said the only way the WA deal would end was if the Coalition agreed not to turn the issue into a political issue to gain votes in the state.
He said Chalmers must give the Productivity Commission an appropriately expansive terms of reference for its review of the GST next year, which he said would inevitably find that the WA deal was the equivalent of the country 'smoking 100 notes'.

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Paul Murray: Prime Minister Anthony Albanese and his Government are torpedoing relationship with the US

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If you're going for a home loan but still have a HECS debt, you might want to wait

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"HECS was never meant to be a handbrake on owning a home," he said. "That's not fair and we're fixing it." The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election. During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected. The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025. The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied. This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction. 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People with outstanding student loans will have an easier time getting a mortgage from September, when new lending rules will take effect. Banks will be able to disregard higher education loan program (HELP) debts, which include HECS debt, when assessing a homebuyer for a mortgage. The changes were finalised this week, after the Albanese government made a pre-election pledge in February to level the playing field for people with student debts. The Australian Prudential Regulation Authority has advised banks to remove HELP debt from debt-to-income reporting, a metric used to determine a person's capacity to repay a mortgage. The regulator has also clarified that it may be reasonable for banks to completely disregard a person's HELP debt from serviceability assessments, where it's expected the loan will be paid off within 12 months. Treasurer Jim Chalmers said the changes would make lending rules fairer. "We're making sure young people with a HELP debt are treated fairly and supporting them to get into the property market," he said. The changes mean a dual-income household with two student debts could borrow an additional $50,000 in the year they expect to pay off their student loan, according to the government's own analysis. APRA has written to lenders and the industry to advise them of the changes and their new obligations. The revised standards for banks will come into effect on September 30, 2025. In its letter to lenders, APRA said the changes would provide regulatory clarity and reaffirm the flexibility banks had in considering borrowers' individual circumstances. The regulator expects the changes will allow some borrowers with student debts to secure a home loan sooner. Education Minister Jason Clare said the Universities Accord found that banks' assessments of student debt made it harder for young Australians to buy a home. "HECS was never meant to be a handbrake on owning a home," he said. "That's not fair and we're fixing it." The federal government will also move ahead with its plan to reduce student debts by 20 per cent, something it committed to before the May election. During the election campaign, Prime Minister Anthony Albanese promised the legislative changes would be his first priority if his government was to be re-elected. The government has reaffirmed this, saying it will be the first piece of legislation introduced when Parliament returns on July 22, 2025. The 20 per cent reduction will occur once the legislation passes Parliament. However, the government has clarified the discount will be calculated based on a person's HELP debt amount as at June 1, 2025, before indexation was applied. This means the 2025 indexation will only apply to the remaining balance after the 20 per cent reduction.