commission on fiscal imbalance 合集

The above description represents a simplified

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Unformatted text preview: able capacities. Full details of the calculations, which are extremely complex, are presented in Attachment A of Volume II of Commonwealth Grants Commission (1999:2). Per capita relativities for each assessment year are calculated by: ♦ calculating each State’s per capita standardised expenditure (the amount which it would need to spend in order to provide the average level of public services, given its demand and cost structure disabilities); ♦ calculating each State’s per capita standardised revenue (the amount it could raise if it made an average effort to raise revenues from its own sources); ♦ using standardised per capita expenditure and revenue adjusted by State population data to produce each State’s total financial assistance requirement (TFAR) (the total assistance which the State would require to enable it to provide the average standard of State-type services, assuming that it produced these services at an average level of efficiency and made the average effort to raise revenues from its own sources); ♦ deducting from each State’s TFAR its receipts of relevant Commonwealth specific purpose payments (SPPs) to produce the State’s standard deficit; ♦ expressing a State’s standardised deficit per capita as a ratio of the total per capita pool of untied Commonwealth funds, including relevant SPPs. A State’s per capita requirement for revenue assistance consists of an equal per capita share of general revenue plus an adjustment for the costs of service provision plus a further adjustment to take account of revenue capacities (Commonwealth Grants Commission, 2000) In its most recent relativities review the CGC examined 41expenditure categories for its standardised expenditure calculations and 18 revenue categories for its standardised revenue calculations. The above description represents a simplified explanation of the CGC methodology and aims to give no more than a general understanding of the approach adopted. The outcome of this methodology in terms of the recommended relativities is presented in Table 18. If a State has a relativity greater than 1 it is a claimant (i.e. subsidised) State while States with relativities less than unity are subsidisers. 136 Commission on Fiscal Imbalance TABLE 18 GST AND FAG RELATIVITIES, 2001-02 GST Relativities 0.92032 0.87539 1.00269 0.97516 1.17941 1.50095 1.14633 4.02166 New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT NT FAGs Relativities 0.88284 0.84543 1.01882 0.92429 1.27328 1.68695 1.18924 4.93364 Source: Budget Paper No. 3, 2001-02, Table 11. The GST relativities are all closer to 1 than the FAGs relativities. This arises from the fact that fiscal equalisation requires redistribution of a fixed dollar amount of funding (approximately $2.1 billion). Since the GST pool is greater than the FAGs pool a smaller proportion of GST funding is redistributed among the States (Budget Paper No. 3, 200102, page 19). The implications of the IGA package for the Grants Commission’s calculation of relativities are disc...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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