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. 14/2006 by John Wilkinson
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- Originally the federation, of the former British colonies on the continent
of Australia, was based on the assumption both that the newly formed states
would be financially stronger than the central government and that the major
share of decisions on important matters would remain with state administrations
(pp.2,8)
- Certain key areas of decision-making, conducive to the consolidation of the
states into a nation, were allocated to the newly established federal
government (p.2)
- From the inauguration of federation onwards, the federal government sought
to direct to itself the greater part of revenue raised in the country (pp.8,11)
- It was the Australian Labor Party that first sought to extend the control
of the national government into significant realms of decision making –
principally for social objectives (pp.3-8). The Australian Labor Party was also
initially inclined to utilise tariffs to stimulate the establishment and
expansion of production in Australia (pp.4,15). The ALP was particularly
concerned with not only drawing financial control towards the central
government, but in having the central government direct expenditure (pp.13-14)
- Since the beginning of federation, there have always been disparities
between the states as far as their respective capacities to raise revenue are
concerned (pp.10,38)
- To address the differences in revenue raising capacities, amongst the
states, the federal government established a Commonwealth Grants Commission
(pp.10-11,21-23)
- After the federal government gained control over the levying of income tax,
the states and territories have become increasingly dependent on revenue from
the federal government (pp.11-14,20-34)
- During the 1980s and 1990s the Australian Labor Party not only forsook the
policy of government control over production and commerce (favouring policy
based on markets), but actively embarked on facilitating the functioning of
state-based enterprises on a national level. The Howard Government has pursued
similar policies (pp.14-20)
- Currently the Commonwealth Grants Commission continues to determine the
shares in the newly established system of federal funding – prompting
remonstrations from states which consider they are dealt with unfairly
(pp.26-39)
