Delivering more funding to the States

All GST is paid to the States and Territories, delivering them a secure and growing revenue base. This can be used to fund services such as hospitals, schools and police, and to reduce state taxes.

In 2004-05, every State and Territory will receive more revenue than it would have received had the Australian Government not implemented tax reform.

GST revenue collections in 2004-05 will be reduced by the decision to allow certain taxpayers to pay GST annually. However, the Government will compensate the States and Territories for this impact. Including these payments, the States and Territories will receive an additional $1.6 billion in revenues in 2004-05.

• New South Wales will receive $113.7 million more
• Victoria will receive $237.9 million more
• Queensland will receive $665.6 million more
• Western Australia will receive $229.1 million more

• South Australia will receive $130.9 million more
• Tasmania will receive $84.3 million more
• The ACT will receive $45.1 million more
• The NT will receive $113.6 million more.

The benefit to the States and Territories will increase over time, with the States and Territories estimated to be better off by a total of $2.9 billion in 2007-08.

Removing more taxes

In March 2004, the Australian Government received a commitment from the States and Territories that they will abolish debits tax by 1 July 2005. Individuals and businesses will no longer be taxed every time they make a withdrawal from a bank account with a cheque drawing facility. This will save taxpayers around $1 billion in 2005-06.

A review is now underway on the need to retain a range of inefficient and distorting State business stamp duties. As GST revenue grows it can fund these tax reductions.