The ACT is set to miss out on $42 million of GST receipts from the Commonwealth government after its MYEFO revealed a decrease in the amount of money it expected to receive from the GST. Photo: File.
The ACT is set to lose around $42 million in GST revenue from the Commonwealth Government next financial year due to falling GST receipts.
The Commonwealth Government has reduced the amount of GST money it expects to receive by almost $10 billion to 2022-23 as a result of global trade tensions, the drought and weak consumer spending, with $1.8 billion less GST revenue expected this financial year, according to Monday’s Mid-Year Economic and Fiscal Outlook (MYEFO).
The ACT’s 2019-20 Budget had forecast $1.41 billion in GST revenue from the Commonwealth this financial year; however, MYEFO revisions to the federal budget now put GST receipts at $1.368 billion, a reduction of 3 per cent (or $42 million).
“Our expected GST grant has also been lowered, commensurate with the ACT’s share of the national population and our GST relativity set by the Commonwealth Grants Commission’s 2019 Update of GST Revenue Sharing Relativities,” an ACT government spokesperson told Region Media.
Currently, the ACT gets around $1.20 back for every dollar it pays in GST, receiving 2 per cent of the total GST pool with just under 1.7 per cent of the total population.
In 2018-19, the Territory pocketed $1.308 billion in GST receipts from the Commonwealth, around $20 million less than it originally forecast in the 2018-19 budget.
Every year, the Commonwealth provides the ACT with General Revenue Assistance to help ease the additional financial costs that arise from Canberra’s role as Australia’s capital.
The reduction of the ACT’s GST receipts is still subject to change.
“This reduction to the ACT’s GST payments over the Budget Review period will also be subject to further review after the release of the Commonwealth Grants Commission’s 2020 Methodology Review of GST Revenue Sharing Relativities in late February,” the spokesperson said.
“The final outcome of the 2020 Review will be reflected in the Commonwealth and ACT 2020-21 Budgets.”
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