The NSW Government’s first Budget includes planning for the GST ‘no worse off’ guarantee to be made permanent, to ensure every state and territory receives their fair share of revenue.
The guarantee was established after the GST floor was introduced in 2018 to make sure that all states and territories were no worse off and received a guaranteed minimum 70 per cent share of GST revenue.
The ‘no worse off’ guarantee requires the Australian Government to compensate states for shortfalls in their GST revenue share between the old and new distribution arrangements until 2026-27.
NSW is expected to receive around $3.8 billion in ‘no worse off’ payments over the next two financial years (2023-24 and 2024-25).
The end of the GST ‘no worse off’ guarantee would be disastrous for New South Wales. It is the money required to employ more than 8,000 nurses or teachers. The end of the guarantee would risk essential services and require the reintroduction of inefficient taxes.
Given the impact this would have on New South Wales, and the Australian Government’s commitment to essential services, it would not make sense for the no worse off guarantee to end.
Future NSW Budget planning will be made on the assumption of the continuation of the GST ‘no-worse off guarantee’.
Treasurer Daniel Mookhey said:
“My focus is on making sure New South Wales gets its fair share of GST revenue. The ‘no worse off’ guarantee helps deliver critical services and infrastructure.
“All states and territories are in agreement that the guarantee should continue.”