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Federal-State Financial Relations: After the GST

Federal-State Financial Relations: After the GST

Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion.
Briefing Paper No. 14/2000 by John Wilkinson

* consumption tax, in Australia, has some of its origins in the introduction and expansion of sales tax which has been described as a regressive tax (pp.5-8)

* the business community has been one sector that has directly championed the introduction of a goods and services tax (p.9)

* the federal parliament has the fundamental legislative control over the recently introduced goods and services tax (pp.12-13)

* federal-state financial relations have been altered, to some degree, by the abolition of financial assistance grants and revenue replacement grants – and by the distribution of goods and services tax (GST) revenue amongst the states and territories (pp.10-11)

* business activity in the individual states may, in fact, be assisted by the accompanying abolition of a range of state taxes (pp.10-12)

* goods and services tax revenue should grow significantly in the years to come, and should eventually benefit NSW (pp.15-17)

* the role of the Commonwealth Grants Commission in apportioning the shares of GST revenue – amongst the various states and territories – may over-advantage some jurisdictions and discriminate against others (pp.17-20)

* NSW’s concentration of wealth should insulate the state from any initial disadvantages in shares of GST revenue (pp.14-15)