Rethink as GST slumps GST raised just $1.6 billion in January, one-quarter less than the $2.14 billion collected in January 2012. The GST is not the growth tax it once was. State government finances are in trouble as consumers pare back discretionary spending or increasingly buy goods online from overseas websites. In a sign that the tax is running into structural trouble almost 13 years after it was introduced, GST revenue has fallen since the start of the year. It raised just $1.6 billion in January, one-quarter less than the $2.14 billion collected in January 2012. The situation improved in February, but was still down, with $7.2 billion raised compared with $7.3 billion a year earlier. Department of Finance data shows GST revenue has fallen year-on-year in five of eight months so far in 2012-13. Canberra collected $34.5 billion since July 2012. That was still more than the $34.2 billion for the same months the preceding year. If the trend continues, state governments across the country will be forced to make difficult decisions. The Napthine government is understood to have examined a range of options including tax increases and spending cuts ahead of the May 7 state budget, with predictions that Victoria's GST revenue will be downgraded a further $200 million in 2013-14. It comes on top of a Commonwealth Grants Commission decision to cut Victoria's share of the GST next financial year to just 90¢ for every $1 it would get if the money were distributed equally on a per capita basis. Victoria, which will next year get a 22.6 per cent slice of the national GST pool, has been leading the push for a new system that would distribute the tax among states in line with their population share. Premier Denis Napthine on Monday blasted the carve-up of GST revenue, claiming Victoria has been subsidising other states. "We have our needs here for major infrastructure, we have our needs for services in health and education, disability services, community services, law and order and we believe there should be a rejigging of the GST to put more GST back in Victoria's pockets because they have taken it from Victoria and we are not getting our fair share back," he said. Federal Opposition Leader Tony Abbott revealed on Sunday that Victoria, NSW and Queensland have been holding talks with Western Australia about a new model for distributing the tax, which would provide more revenue for larger states. While retail sales have been sluggish, online sales are booming. A National Australia Bank survey found online retail sales grew 27 per cent over the year to January, with domestic and international online sales now accounting for almost 6 per cent of total retail spending. The states have urged the federal government to slash the threshold which now allows a GST exemption for products worth less than $1000 purchased online.