Unformatted text preview: arrangements. These consisted mainly of an increase in Federal customs and excise duties on tobacco and alcohol,
and an increase in the WST rate on alcoholic beverages. All revenue (less administrative costs) was returned to the States as
Interest Costs relate to the interest costs incurred by States as a result of the change from weekly payments of FAGs, RRPs and
State taxes to monthly payments of GST revenue grants.
WST Payments relate to payments totalling $338m., starting in 2000-01 and spread evenly over three years, in respect of revenue
forgone from the abolition of the WST Tax Equivalent Regimes.
Savings from Tax Reform refer to the reduced costs resulting from the removal of embedded WST and excises on purchases by
The Growth Dividend is claimed to accrue as a result of the impact upon State revenues of the increased growth attributable to the
introduction of the GST package. It is the opinion of this author that calculations of this type are fraught with methodological 119 Commission on Fiscal Imbalance difficulty, and estimates of this type should accordingly be treated with the greatest caution. Was it a coincidence that in Federal
Treasury calculations of the effects of the first full year of operation of the original package the State growth dividend exactly
matched what would otherwise have been a net revenue loss for the States?
Since the original IGA the Federal Government has introduced additional first home owners assistance, fully funded by a
Commonwealth Specific Purpose Payment to the States. Table 6 presents estimates of the distribution to the States of the GST revenue, together with Health Care Grants
ESTIMATED DISTRIBUTION OF GST REVENUE, 2001-02
at 31/12/2000 Total Weighted
(1)*(2) Share of
population GST revenue/
NT Per capita
1,335.6 19,483,250 n.a. 19,474,240 100.0 34,033.1 6,553.1 27,480.0 Source: Budget Paper No. 3, 2001-02, Table 4. The per capita relativities of column (2) are derived from the Grants Commission’s relativities recommended in the 2001
update of the 1999 review (see Commonwealth Grants Commission, 1999:2 and 2001). These per capita relativities are
applied to the population projections to yield the weighted populations of Column (3). The weighted populations are
converted into percentage shares in Column (4). These percentages are applied to the total GST revenue plus Health
Care Grants pool distribution to yield the figures in Column (5). From these are ded...
View Full Document