commission on fiscal imbalance 合集

There can be little doubt that state treasuries have

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Unformatted text preview: aimed for the IGA arrangements is that the revenues accruing to the States are a function of objective measures of national consumption rather than resulting from the political process, as expressed in the Premier’s Conferences. It is true that the total GST revenue accruing to all States is objectively determined. However, the distribution of that revenue total between the States is undertaken on the basis of Commonwealth Grants Commission fiscal equalisation recommendations. The principles underlying the calculation of these relativities are suspect (as is discussed in Chapter 6) and, in any case, the Federal Government is not bound to accept these recommendations. Thus, while the total GST payments to the States as a whole are guaranteed, the payments to any 127 Commission on Fiscal Imbalance individual State are not. Furthermore, there still remains the possibility for Federal Governments to influence overall State receipts by varying Special Purpose Payments and, during the transitional period, the Guaranteed Minimum Amounts. If the Treasurer’s forward revenue estimates are taken at face value it does appear that the States as a whole will, after a significant period of time, have access to a revenue source yielding higher revenues than the replaced sources. Given the paucity of published information on forward estimates of revenue from the GST and the abolished State taxes (as well from FAGs and RRPs), it is virtually impossible with any confidence to check Federal Treasury’s overall revenue estimates. There is no doubt that the States have enthusiastically accepted the hypothecation to them of GST revenue, even though reservations on their part may exist about other aspects of the IGA package. There can be little doubt that State Treasuries have been undertaking their own forward revenue estimates, and so the States’ relatively compliant attitudes can reasonably be interpreted to mean that they also believe that GST revenue will ultimately rise faster than the revenue from the abolished taxes. The calculation of the GMA during the transitional period involves considerable uncertainty. As an example, since the latest calculation of the GMA there has been a significant increase in the price of petroleum. As the business franchise fees on petroleum were largely an ad valorem tax, a price increase should lead to an increase in the RRP for the petroleum franchise fee above that incorporated in the current estimates. The estimation of forgone FAGs is another area of uncertainty. In summary, the ability to control the calculation of GMAs would imply the ability to determine overall payments to the States during the transitional period. An interesting issue arises in the calculation of the RRPs for business franchise fees on tobacco. As part of the ANTS package the Commonwealth is changing the basis of tobacco taxation to a “per stick” basis, with an expected consequent price increase of 6.5%, and presumably a revenue increase of at least the same order (since the demand for tobacco is price inelastic). The States do not appear to be receiving any share of this increased revenue. Thus the tobacco ta...
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