Garnaut Fitzgerald Review of Commonwealth-State Funding

CHAPTER 4: Allocation of General Purpose Grants
The equalisation of SPPs adds an additional layer of complexity to an SPP system
which is already complex (see Chapter 5). Arguably, the equalisation of SPPs has:
• led to some complacency in SPP negotiations on the distribution of funding between
States. For example, the distribution of disability services funding is highly
anomalous, but accepted on the basis that it is ‘fixed’ by the CGC
• led to the Commonwealth imposing tighter conditions on SPP funding to achieve its
output and outcome objectives. Because additional funding provided by the
Commonwealth for a specific purpose in one State will be redistributed away, it
becomes common for the Commonwealth to lock the State into spending on that
purpose through narrow conditions.
Simplicity and transparency aspects of SPPs, and anomalies and unintended
consequences, are examined further in Chapter 11.
FINAL REPORT [58]