Ross Gittins has an excellent column in the Age & SMH today on how the benefits of the resources boom flow through the economy:
Gittins points out that NSW and Victoria benefit through the reallocation of Grants Commission funding toward them and away from WA and Queensland due to the improvement in WA and Queensland’s taxable capacity associated with the resources boom:
n 2004-05, NSW got just 83 per cent of the national average GST paid per person, while Victoria received 84 per cent. WA’s share was 104 per cent of the national average and Queensland took 107 per cent, with SA getting 123 per cent and Tasmania 171 per cent.
But the huge increase in the resource states’ taxable capacity thanks to booming mining royalties has changed all that. This financial year, NSW’s cut has risen to 96 per cent and Victoria’s to 90 per cent, whereas Queensland’s cut has fallen to 93 per cent and WA’s to – get this – 72 per cent.
It works out that, in effect, Queensland’s benefit from its mining royalties this year will be reduced by $1.2 billion and WA’s by $2.5 billion. Of their combined loss of $3.7 billion, NSW gains $1.3 billion and Victoria $1.8 billion.
Queensland Economy Watch 