The states and territories will have benefited from a cumulative GST windfall of $11.8 billion by 2007/08, more than triple the estimate at the inaugural meeting of the Ministerial Council for Commonwealth-State Financial Relations (MINCO) in March 2000, Treasurer Peter Costello says.
Releasing the projections today, he says the higher-than-expected revenue flows have not been factored into their budgets and represent a "straight-out financial bonus".
"This latest data reveals that over the period to 2007/08, the total cumulative gain to the states and territories from the GST will be $11.8 billion," Costello says.
"The latest aggregate windfall is $2.9 billion higher than the $8.9 billion cumulative gain projected at the time of the 2004/05 Budget in May 2004. This indicates that in the space of barely four months, the states and territories have received yet another massive and unexpected financial bonus.
"To appreciate the sheer magnitude of the states' and territories' financial bonanza, it is useful to revisit the projected impact of the GST on state and territory finances at the time of the first meeting of Treasurers at the inaugural MINCO meeting in March 2000.
"At that time it was expected that the gains from the new tax system would take some time to flow through, but that by 2007/08 all states and territories would be receiving a windfall under the new tax system compared with the previous system of financial assistance grants and the state and territory taxes that were abolished.
"Over the entire period from 2002/03 to 2007/08, the states and territories were originally forecast to be receiving a $3.7 billion windfall compared with the previous system."
This new data, contained in the Final Budget Outcome and the Pre-Election Economic and Fiscal Outlook document released in recent days, shows the states and territories have been "unambiguous beneficiaries of the GST," he says.
"This revenue is an ever increasing source of funds to finance their schools, hospitals and police services," Costello says.
Queensland has benefited most from the new financial arrangements, the data shows.
The state was originally forecast to be $2.173 billion better off in the period, but this is now projected to top $3.792 billion - a windfall that far surpasses that expected to be enjoyed by other states and territories (Victoria $2.077 billion, NSW $1.963 billion, WA $1.448 billion).
By 2007/08, Queensland is anticipated to be $1.035 billion ahead of where it would have been under the previous financial arrangements.