A thought experiment, not currently official Libertarian Party WA policy. This page imagines a "what if": what if more of the money earned in Western Australia stayed in Western Australia? Today's figures are sourced. Anything about how things could change is illustrative reasoning, not a forecast. It is not currently official Libertarian Party WA policy.
The better way, in plain words
Money is best spent close to the people who earn it. Imagine a WA where the state raised most of what it spends, answered to West Australians for every dollar, and didn't have to wait on Canberra's decisions. Here is where WA stands today, and how it could look.
1. Today: WA earns a lot, and much of it leaves
- A record-sized gap. WA Treasury estimates the Commonwealth raised about $115 billion from WA in 2024-25 and spent about $78 billion for WA's benefit, including WA's share of the federal deficit. That is a net contribution of about $36.2 billion, or $12,016 per West Australian. Only NSW also put in more than it got back, at $1,046 per person. (WA 2026-27 Budget Paper No. 3, Appendix 11, Table 11.1)
- Over time. WA Treasury puts WA's total net contribution from 1986-87 to 2024-25 at $449 billion, including $42 billion from GST since 2000-01. (Budget Paper No. 3, Appendix 11)
2. Today: the state spends money it doesn't raise
Economists call this "vertical fiscal imbalance": Canberra collects the big taxes (income tax, company tax and GST), while the states run schools, hospitals, police and roads. So the states rely on grants. In WA's 2026-27 Budget:
| WA general government, 2026-27 Budget | $ million | Share of total revenue |
|---|---|---|
| Total revenue | 54,980 | 100% |
| Commonwealth grants (current 16,707 + capital 2,791) | 19,498 | about 35.5% |
| of which GST grants | 9,342 | about 17.0% |
| State taxes | 16,920 | about 30.8% |
| Mining royalties | 9,443 | about 17.2% |
| Total expenses | 52,539 |
Source: WA 2026-27 Budget Paper No. 3, Overview Table 2 (key budget aggregates), Appendix 1, Table 1.1 (operating statement) and Appendix 2, Table 2.1 (operating revenue). Shares are our arithmetic from those figures.
So more than a third of what the WA Government spends arrives as a cheque from Canberra, often with conditions attached, while WA as a whole sends far more to Canberra than comes back. For the GST share and the full "go it alone" sums, see our separate thought experiment, What if WA went it alone?
3. What if: WA keeps more of what it earns
This scenario stays inside the federation. Imagine the deal changed so that WA kept more of the tax raised here, and in return took less in conditional grants. The before and after below is illustrative reasoning only.
| Today | In the scenario (illustrative) | |
|---|---|---|
| Who decides | About 35.5% of state revenue arrives as Commonwealth grants, many tied to national agreements | More of the money is raised and decided in WA, and voters know who to hold to account |
| Your tax bill | You pay federal taxes plus state taxes such as payroll tax, stamp duty and land tax | A WA that kept more could use it to cut or scrap its own worst taxes |
| Blame game | Hospitals and schools are funded by both levels, so each can blame the other | Clearer lines: one level pays, one level answers |
A worked example (illustrative, not a forecast). Suppose a new deal let WA keep just one-tenth of its 2024-25 net contribution: 10% of $36.2 billion is about $3.6 billion a year. In 2026-27 transfer duty (stamp duty, including landholder duty and the foreign buyers surcharge) is budgeted to raise $3.95 billion (Budget Paper No. 3, Table 2.1). So that tenth would cover about 92% of it: $3.6 billion ÷ $3.95 billion. In other words, a small slice of what WA sends east is close to the cost of scrapping stamp duty for every home buyer. That is a sum, not a promise: the net contribution moves with iron ore prices and federal decisions, and any new deal would need the Commonwealth and other states to agree.
4. The honest hurdles
- The Commonwealth's taxing powers, and the GST deal, are set nationally. Any change needs agreement from Canberra and, usually, the other states.
- Much of the revenue raised in WA is company tax from mining, which rises and falls with commodity prices.
- WA's own royalties are budgeted to fall from $10.8 billion in 2025-26 to $9.4 billion in 2026-27 (Budget Paper No. 3, Table 2.1), so a WA that relies more on itself needs a tax base that doesn't swing with iron ore, and spending discipline to match.
Reminder: this is a thought experiment, not currently official Libertarian Party WA policy. We publish it to get West Australians thinking about where their money goes and who decides. Tell us what you think, read what we are actually campaigning for on our policies page, or join us.