Each year, the Federal Treasurer asks the Commonwealth Grants Commission to update the relativities used to distribute revenue from the GST pool to state and territory governments. This report presents the recommended GST relativities for 2024–25.

Recommended GST relativities in 2024–25 reflect changes in state fiscal circumstances, predominantly changes in mining royalties, land values and property sales. The release of new data from the 2021 Census has also impacted the GST distribution.

Under the 2018 legislated arrangements, this is the fourth year in which the blending of assessed and standard state relativities was used to calculate GST relativities. It is the first year in which the GST relativity floor is 0.75. The blending of relativities from the previous and current arrangements, together with the GST floor, continues to have a significant impact on the GST distribution outcomes.

Key findings:

• Victoria’s GST distribution is estimated to increase significantly from last year (by $3.7 billion). This is largely driven by its lower capacity to raise mining revenue relative to other states. Victoria’s assessed GST needs have also increased as a result of new data from the 2021 Census increasing its urban population and urban density.
• New South Wales’ and Queensland’s GST distributions are estimated to fall, largely due to increases in their respective revenue raising capacities. Both states have an increased capacity to raise coal mining royalties. New South Wales also has an increased capacity, relative to other states, to raise revenue from land tax.
• Western Australia’s GST distribution is estimated to increase in 2024–25 as a result of the higher GST relativity floor of 0.75. It continues to have a very strong fiscal capacity, driven by its capacity to raise iron ore royalties.