Ahead of a treasurers’ meeting in Brisbane on Friday, the states are seeking a $5 billion boost to their share of goods and services tax revenue.
Victorian Treasurer Tim Pallas wants Dr Chalmers to extend a “no worse off guarantee” which was set up in 2018 after a deal was struck under the former coalition government with Western Australia.
The guarantee is due to conclude by 2026/27.
“I think states wanting more money from the Commonwealth is not exactly unprecedented, or a big revelation,” Dr Chalmers told ABC radio on Thursday.
“I will always work with them to do the best we can for the people that we represent, but that means recognising that there’s not just pressure on state budgets, there’s pressure on the Commonwealth budget as well.”
Dr Chalmers said federal payments to the states were already going up and other GST top-ups were being paid.
“We’ve paid billions of extra dollars for housing and skills and the states have done really well out of us.”
He noted there was a Productivity Commission review of the scheme, which had blown out from $6.7 billion to $33.9 billion, in 2026.
Shadow treasurer Angus Taylor said it was not the time to be “throwing more money around”.
The treasurers are also due to discuss tax settings for electric vehicles and competition reform.