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Unformatted text preview: e “rollback” of the GST so that certain “necessities” become, in the Australian terminology, GST-free, that
is zero-rated. The revenue cost of this reform would, without compensation arrangements, be borne by the States but
the policy proposals so far have not discussed compensation. Under the IGA, any proposal to change the GST base
would need the unanimous support of, inter alia, all States and Territories and should be consistent with maintenance of
the integrity of the tax base. It would appear that the Federal Opposition would be willing, if necessary, to break the IGA.
I believe that, in the long run, Federal Governments on either side of politics will find it difficult to resist the temptation to
appropriate, either directly or indirectly, some of the GST revenue. Australian Federal Governments have consistently
exercised financial domination over the States and I would expect this tradition to continue. 138 Commission on Fiscal Imbalance REFERENCES
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