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Vic 'collateral damage' under GST shake-up

AAP logoAAP 14/08/2016

Victoria's treasurer says the state will be "collateral damage" if the prime minister moves to change how the GST is carved up between states.

Treasurer Tim Pallas fears Victoria will be short-changed if Western Australia gets a bigger slice of the GST.

"Victorians will once again be collateral damage as Malcolm Turnbull short changes our state, and cravenly pursues votes at the WA election," Mr Pallas said in a statement on Sunday.

The prime minister announced at the WA Liberal state conference on Saturday he would work with premiers to put in a floor to how low a state's share of the GST could drop, after WA's take sharply dropped to an unusually low 30-odd cents back for every dollar it generated in recent years.

Introduced gradually, it will make up for lower iron ore prices that have been cutting the amount WA collects in mining royalties.

Mr Pallas said WA has done little to reform their economy, or alter their reliance on mining royalties, and fears the prime minister is helping WA because of its Liberal/National state government.

He said the prime minister wanted to manipulate the Commonwealth Grants Commission processes to prop up an incompetent Liberal/National WA government, while doing nothing to improve that state's economic management.

The federal government says the proposed changes have been introduced to make sure no state's GST can drop too low again.

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