Garnaut Fitzgerald Review of Commonwealth-State Funding
Garnaut Fitzgerald Review of Commonwealth-State Funding
Garnaut Fitzgerald Review of Commonwealth-State Funding
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GLOSSARY<br />
revenue need<br />
revenue raising capacity<br />
revenue replacement payments<br />
royalties<br />
specific purpose payments:<br />
SPPs ‘through’<br />
SPPs ‘to’<br />
standard budget<br />
standardised expenditure<br />
standardised revenue<br />
<strong>State</strong> <strong>of</strong> origin allocation<br />
unitary state<br />
vertical fiscal imbalance<br />
Reflect above or below-average revenue raising capacities<br />
Determined by the size <strong>of</strong> <strong>State</strong>s’ revenue bases, such as wages<br />
and salaries (payroll tax), land values (land tax) and mining and<br />
industry pr<strong>of</strong>its (royalties).<br />
A form <strong>of</strong> compensation to the <strong>State</strong>s for the loss <strong>of</strong> franchise fees.<br />
Subsequently replaced with general purpose grants.<br />
A share <strong>of</strong> the pr<strong>of</strong>it or product reserved by the grantor, especially<br />
<strong>of</strong> an oil or mining lease.<br />
<strong>Commonwealth</strong> Grants to the <strong>State</strong>s that must be spent in specific<br />
areas such as health or education. Specific purpose payments are<br />
subject to individual agreements which attach a variety <strong>of</strong> terms<br />
and conditions to the grants. They are also usually classified as:<br />
– payments ‘to’ the <strong>State</strong>s, which are programs administered by<br />
the <strong>State</strong>s<br />
– payments ‘through’ the <strong>State</strong>s, which are on-passed to other<br />
bodies, principally non-government schools and local<br />
governments.<br />
The starting point in the calculation <strong>of</strong> relativities. It reflects the<br />
scope <strong>of</strong> state activities to be included in the assessment and puts<br />
them into a common framework.<br />
The assessment <strong>of</strong> what a <strong>State</strong> would need to spend to provide a<br />
standard (average) service if it operated at an average level <strong>of</strong><br />
efficiency.<br />
An estimate <strong>of</strong> what a <strong>State</strong> would raise from its own sources if it<br />
made a standard (average) revenue raising effort; that is, if it<br />
applied standard (average) tax rates to its tax bases and collected<br />
revenue at an average level <strong>of</strong> efficiency.<br />
Returning proceeds <strong>of</strong> a tax to the <strong>State</strong>s that generated the<br />
revenue.<br />
A system <strong>of</strong> government in which legislative responsibility is<br />
carried out by one set <strong>of</strong> elected parliamentarians, representing<br />
the entire population and fulfilling administrative and executive<br />
responsibilities.<br />
When constitutionally assigned federal and state government<br />
revenues do not match their constitutionally assigned expenditure<br />
responsibilities.<br />
FINAL REPORT [233]