A proposal to increase the gold royalty is still on the table, despite Western Australia being in line to receive an extra $4.7 billion of GST revenue during the next eight years.

WA Treasurer Ben Wyatt told the Kalgoorlie Miner it remained State Government policy for the gold industry to “pay its fair share”.

Mr Wyatt’s statement came after Federal Treasurer Scott Morrison announced a plan to change the GST redistribution scheme which, if implemented, would give WA an extra $1.4 billion in the next two years, and an extra $4.7 billion by the 2026-27 financial year.

Mr Wyatt first proposed increasing the gold royalty to 3.75 per cent from 2.5 per cent in last September’s State Budget to raise $392 million over four years.

The aim of acquiring this extra revenue was to help reduce the State’s massive debt, forecast to peak at $40.9 billion next financial year, run up by the previous Liberal-Nationals government between 2008-17.

But a majority of Upper House parliamentarians twice blocked the proposal last year.

Since then, Mr Wyatt has refused to rule out increasing the royalty in the future, and this remained his position on Thursday.

“It remains the policy of the Government that the gold industry should pay its fair share for a finite resource which is owned by all West Australians, and this is not linked to the financial position of the State,” he said.

Mr Morrison said the Federal Government’s proposal to change the system of horizontal fiscal equalisation included ensuring WA always received at least 70c in the dollar, and no other State would be worse off.

He said the plan would involve establishing New South Wales and Victoria as the new benchmarks for the system.

“Benchmarking all States and Territories to the economies of the two largest States (NSW and Victoria) will remove the effects of extreme circumstances, like the mining boom, from Australia’s GST distribution system,” he said.

Mr Morrison said a Productivity Commission inquiry had found the current system produced “perverse outcomes when there is a significant shock to our economy”.

“This occurred in WA where the effect of the mining boom resulted in a fall in its relativity, which eventually reached 30c in the dollar per person of GST and saw that State receive less in distributions from the GST than much smaller jurisdictions, including the Northern Territory, Tasmania and South Australia,” he said.

He said he would be visiting all States in the next few weeks to discuss the proposal, with a September meeting of State treasurers aiming to implement an agreement.

Image: Wa Treasurer Ben Wyatt, The West Australian.