The Commonwealth Grants Commission is an Australian independent statutory body that advises the
Australian Government
The Australian Government, also known as the Commonwealth Government, is the national government of Australia, a federal parliamentary constitutional monarchy. Like other Westminster-style systems of government, the Australian Government i ...
on financial assistance to the
states and territories of Australia
The states and territories are federated administrative divisions in Australia, ruled by regional governments that constitute the second level of governance between the federal government and local governments. States are self-governing p ...
under
section 96 of the Australian Constitution. The Commission was established in July 1933 by the
Lyons Government during the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
to provide impartial advice on the distribution of federal government grants to the states. The Commission operates under the ''Commonwealth Grants Commission Act 1973'', and is responsible for measuring the relative fiscal capacity of each state and territory.
The Commission recommends how the revenues raised from the
goods and services tax (GST) should be distributed to each state and territory to achieve
horizontal fiscal equalisation Equalization payments are cash payments made in some federal systems of government from the federal government to subnational governments with the objective of offsetting differences in available revenue or in the cost of providing services. Many fe ...
(HFE), a central feature of the Australian federation.
References to Commission
The Commission responds to a reference from the
Australian Treasurer, which are generally requests for calculating appropriate ratios of
per capita
''Per capita'' is a Latin phrase literally meaning "by heads" or "for each head", and idiomatically used to mean "per person". The term is used in a wide variety of social sciences and statistical research contexts, including government statistic ...
grants for distributing general revenue assistance from the Australian government to the states and territories. The details of these references are usually negotiated between the Commonwealth, state and territory treasury departments before being formally issued by the Treasurer.
The Commission reports to the Australian government and then provides copies to the states and territories. The recommendations are then considered at the
annual meetings of the Treasurers of the Commonwealth, states and territories.
On 31 March 2016, the Commission received a reference to inquire into and report by 7 April 2016 on the per capita relativities to be used to distribute GST revenue among the states and the territories in 2016-17.
Every five years, the Commission undertakes a review of the methodology underlying the Commission’s advice to the government on the relative fiscal capacity of each state and territory. The last reference was given on 29 November 2016 and the review was completed in March 2020.
[2020 Review - Terms of Reference]
/ref> The purpose of reviews is to determine the most appropriate methods and data for measuring the relative fiscal capacity of states and territories.[
]
See also
* Fiscal imbalance in Australia
The fiscal imbalance in Australia is the disparity between the revenue generation ability of the three levels of governments in Australia relative to their spending obligations; but in Australia the term is commonly used to refer more specificall ...
* Council of Australian Governments
The Council of Australian Governments (COAG) was the primary intergovernmental forum in Australia from 1992 to 2020. Comprising the federal government, the governments of the six states and two mainland territories and the Australian Local Go ...
General:
* Equalization payments Equalization payments are cash payments made in some federal systems of government from the federal government to subnational governments with the objective of offsetting differences in available revenue or in the cost of providing services. Many fe ...
* Fiscal imbalance Fiscal imbalance is a mismatch in the revenue powers and expenditure responsibilities of a government.
In the literature on fiscal federalism, two types of fiscal imbalances are measured: Vertical Fiscal Imbalance and Horizontal Fiscal Imbalance. W ...
* transfer payment ally
Transfer may refer to:
Arts and media
* ''Transfer'' (2010 film), a German science-fiction movie directed by Damir Lukacevic and starring Zana Marjanović
* ''Transfer'' (1966 film), a short film
* ''Transfer'' (journal), in management studies
...
Federal budget:
* Australian federal budget
An Australian federal budget is a document that sets out the estimated revenues and expenditures of the Australian Treasury in the following financial year, proposed conduct of Australian government operations in that period, and its fiscal poli ...
References
External links
Official site
Commonwealth Government agencies of Australia
Government agencies established in 1933
Government finances in Australia
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