Garnaut Fitzgerald Review of Commonwealth-State Funding

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Chapter 5: Specific Purpose Payments and Overall Payments to the States TABLE 5.1: SPPs by functional area, 2002–03 Function Current Capital Total SPPs ‘to’ $m $m $m % Health 7 910.5 5.9 7 916.4 51.1 Education 2 936.3 230.8 3 167.2 20.4 Social security and welfare 1 653.1 43.7 1 696.8 11.0 Transport and communication 38.3 1 097.7 1 135.9 7.3 Housing and community amenities 8.7 990.3 999.0 6.4 Other purposes 336.5 1.5 338.0 2.2 Agriculture, forestry and fishing 151.5 0.0 151.5 1.0 Public order and safety 70.1 0.0 70.1 0.5 Fuel and energy 0.0 20.4 20.4 0.1 Total ‘to’ 13 104.9 2 390.3 15 495.2 100.0 SPPs ‘through’ Education 3 919.4 90.8 4 010.2 73.1 Local government 1 436.1 0.0 1 436.1 26.2 Housing and community amenities 0.0 39.6 39.6 0.7 Total ‘through’ 5 355.5 130.4 5 485.9 100.0 Royalties 337.4 337.4 Total SPPs 18 797.8 2 520.7 21 318.5 100.0 Source: Commonwealth Government 2002a The ten largest SPPs ‘to’ by value account for over 86 per cent of total SPP ‘to’ funding (Table 5.2). The ‘other’ category comprises a large number of small SPPs relating mainly to environmental programs, infrastructure and one-off projects. TABLE 5.2: Ten largest SPPs ‘to’ by value, 2002–03 SPP $m % Australian health care agreement 7 059.0 45.6 Government schools 1 696.3 10.9 Vocational education and training 1 032.5 6.7 Road programs (mainly National Highways) 978.3 6.3 Commonwealth–State housing agreement 824.2 5.3 Home and community care 674.1 4.4 Commonwealth–State disability agreement 515.6 3.3 Highly specialised drugs 345.3 2.2 Targeted and joint programs government schools 324.1 2.1 National public health 194.7 1.3 Other 1 851.0 11.9 TOTAL 15 495.2 100.0 Source: Commonwealth Government 2002a FINAL REPORT [62]
Chapter 5: Specific Purpose Payments and Overall Payments to the States 5.3 Distribution and trends SPPs have become substantially more important over time. Figure 5.2 shows the increase in SPPs from 22 per cent of total Commonwealth payments in 1942–43 to 50 per cent in 1999–2000. The decline in 2000–01 corresponds with the introduction of the GST and the New Tax System. FIGURE 5.2: SPPs as a percentage of total payments to the States Curtin / Chifley M enzies and Coalition Whitlam Fraser Hawke / Keating Howard 50 49 50 40 43 40 40 per cent 30 20 22 32 19 24 19 34 15 10 0 1942–43 1945–46 1948–49 1951–52 1954–55 1957–58 1960–61 1963–64 1966–67 1969–70 1972–73 1975–76 1978–79 1981–82 1984–85 1987–88 1990–91 1993–94 1996–97 1999–00 2002–03 Source: Commonwealth Government (Budget Papers, various years) SPPs were introduced in the 1920s to assist in road construction and debt management. They remained limited in scope until World War II, from which time the number of tied grant programs gradually increased. Early SPPs were for housing, education, agriculture, some health programs and infrastructure developments. The importance of SPPs escalated markedly in the mid-1970s under the Whitlam Government, with comprehensive funding for education and public hospitals and the provision of general purpose grants for local government (see Figure 5.2). The proportion of tied funding eased moderately under the Fraser Government. Since then, SPPs have increased steadily as a proportion of total Commonwealth funding to the States. The distribution of SPPs among the States is based on a variety of indicators, including population shares, Commonwealth discretionary allocations and various formulae that attempt to reflect costs or demand. FINAL REPORT [63]
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Review of Commonwealth-State Fundin
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Review of Commonwealth-State Fundin
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TABLE OF CONTENTS CHAPTER 9: Equity
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THE REVIEW COMMITTEE FINAL REPORT [
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EXECUTIVE SUMMARY Overall assessmen
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EXECUTIVE SUMMARY Each State would
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CHAPTER 1: Overview and Summary of
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Page 32 and 33: CHAPTER 2: How the System Grew: A H
Page 50 and 51: CHAPTER 3: The Current System TABLE
Page 52 and 53: CHAPTER 3: The Current System 3.3 G
Page 54 and 55: CHAPTER 3: The Current System Natio
Page 56 and 57: CHAPTER 3: The Current System FINAL
Page 58 and 59: CHAPTER 4: Allocation of General Pu
Page 70 and 71: Chapter 5: Specific Purpose Payment
Page 88 and 89: CHAPTER 6: Comparative Fiscal Posit
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Page 102 and 103: CHAPTER 7: Other Federations Sales
Page 104 and 105: CHAPTER 7: Other Federations The Un
Page 106 and 107: CHAPTER 7: Other Federations Popula
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Page 118 and 119: CHAPTER 7: Other Federations FINAL
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CHAPTER 8: Federal Policy Effects o
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CHAPTER 9: Equity Chapter 1 notes t
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CHAPTER 9: Equity Both SPPs and gen
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CHAPTER 9: Equity Table 9.3 shows t
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CHAPTER 9: Equity 9.3 Horizontal di
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CHAPTER 9: Equity Many ways to rais
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CHAPTER 10: Efficiency and Economic
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CHAPTER 11: Simplicity, Transparenc
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CHAPTER 12: Overall Assessment and
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CHAPTER 13: Commonwealth-State Fina
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APPENDIX A: National Health and Age
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APPENDIX A: National Health and Age
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APPENDIX B: National Education and
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APPENDIX C: National Indigenous Com
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APPENDIX C: National Indigenous Com
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APPENDIX D: Minimum Cost of Governm
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APPENDIX E: Consultation • Local
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APPENDIX E: Consultation • VICRoa
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GLOSSARY Efficiency: allocative eff
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GLOSSARY merit goods (health, educa
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FINAL REPORT [234] GLOSSARY
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BIBLIOGRAPHY Buchanan, JM 2001, Fis
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BIBLIOGRAPHY Government of Victoria
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BIBLIOGRAPHY Watts, RL 1999, Compar
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INDEX E economic activity / growth
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INDEX O other Federations Canada ·
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Garnaut Fitzgerald Review of Commonwealth-State Funding

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