Business joins government in defending NSW slice of GST pie

Parramatta Chamber of Commerce supports its peak industry body, NSW Business Chamber, the NSW Government, and other industry and community groups, in their open letter calling on the Commonwealth Grants Commission to reconsider its proposal to strip NSW of nearly $2 billion in GST revenue over the next three years.

As part of the 2010 state revenue sharing review, the Commonwealth Grants Commission has proposed to change the GST formula to provide additional GST revenue to Queensland for infrastructure at the cost to NSW of nearly $2 billion.

"A $2 billion cut in the State's GST allocation will have a significant impact on the capacity of the government to deliver and maintain roads, schools, hospitals and public transport in the region," said Trevor Oldfield, president of the Parramatta Chamber of Commerce.

"Local businesses can't afford to pay higher taxes because of this $2 billion cut.

"Queensland is being allowed to ‘double dip' when it comes to GST revenue - not only do they get more GST from a growing population but money from NSW to pay for their infrastructure as well.  This simply isn't fair."

Mr Cartwright, CEO of NSW Business Chamber said that higher urban densities in NSW, particularly in Sydney, made the delivery and maintenance of infrastructure more expensive than in other states and that this should be taken into account in distributing GST revenue.

"The Grants Commission has created a reverse ‘Robin Hood' formula - robbing the struggling states of NSW and Victoria to pay the resource rich state of Queensland," said Mr Cartwright.

"These proposals by the Commission will make the GST formula even more complex, and will result in even greater pressure on NSW during these tough economic times.

"The 2010 review is an opportune time to simplify the GST formula and make it fair - not make it more complicated.  We call on the Grants Commission to work in partnership with NSW to ensure our state gets its fair share."