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2007-08 Source: Costello (2000), page 9; Budget Paper No. 3, 2000-01, Table 5; and Budget Paper No.3, 2001-02,
Tables 5 and 6. The original agreement specified that it would be necessary for the Commonwealth to top up funds to the States’
Guaranteed Minimum Amounts for a relatively short period of time, up to June 2003. However, the Democrat
Amendments now mean that budget balancing assistance is predicted to be necessary up to June 2007, although not for
all States. For Queensland, the GST revenue is predicted to exceed the GMA from 2002-3. For Western Australia, the
ACT and the Northern Territory GMAs will be exceeded in 2004-5. For South Australia and Tasmania GMAs are
exceeded in 2006-7, while in NSW and Victoria they are not exceeded until 2007-8.
Forecasts of GST revenue and of the level of GMAs for the period up to and including 2003-04 are published in the
2000-01 Budget Papers, but no breakdown is available for the post 2003-04 estimates contained in Costello (2000) and
reproduced in Table 8. Nor has any information been published concerning the composition, in years after 2000-01, of
GMAs (particularly forgone State revenues, RRPs and FAGs). Thus it is not possible to comment on the estimated size
of these GMAs, even though their levels are crucial to the financial outcomes of the States.
The original document A New Tax System (ANTS, Costello 1998) did provide some longer term forward estimates but
the Democrat Amendments rendered these forward estimates largely invalid. However, it is possible to use these
original estimates as a basis for the production of some more up-to-date forecasts.
Costello (1998, page 103) presented a summary of the revenue and outlay impacts of the IGA on the States and
Territories for the year 2000-01 to 2002-03 inclusive. The March 2000 press release, however, did not produce such
forward estimates. Table 9 presents this author’s own attempt to provide revised estimates in the light of the information
provided in Costello (2000) and subsequent budget documents. 122 Commission on Fiscal Imbalance TABLE 9
ESTIMATED IMPACT OF THE IGA ON THE STATES AND TERRITORIES
(in billion of dollars)
2000-01 2001-02 2002-03 24.18
-0.05 0.24 0.12 0.20 Increases in Revenue GST revenue
Growth dividend - States' share
Reductions in Revenues Reduced gambling taxes
Abolition of FID/debits tax
Abolition of business stamp duties
Abolition of accommodation taxes
Abolition of business franchise fee replacement taxes
Changes in Other Payments to the States Abolition of FAGs
Commonwealth grants to balance State budgets
Changes in Outlays First Home Owners' Scheme
Reduced costs to government from indirect tax reform
State rebates for off-road...
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