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Fixing funding in the Australian Federation: issues and options for state tax reform

Citation

Eccleston, R and Smith, HM, Fixing funding in the Australian Federation: issues and options for state tax reform, Australian Journal of Public Administration, 74, (4) pp. 435-447. ISSN 0313-6647 (2015) [Refereed Article]

Copyright Statement

Copyright 2015 Institute of Public Administration Australia

DOI: doi:10.1111/1467-8500.12176

Abstract

The structural pressures confronting the federal budget are well documented. Given the political risks associated with reducing the federal deficit by either increasing taxes or reining in expenditure at a national level, the Commonwealth has outlined its intention to freeze (in real terms) tied grants to the states from 2017. If implemented, this strategy will see Commonwealth transfers to the states decline from a peak of 29% of federal expenditure in 2001 to a projected 21% in 2024. Cost shifting on this scale is unprecedented in the Australian federation and arguably heralds a new era of ‘fend-for-yourself federalism’. The potential significance of this move is exacerbated by the current budgetary context and the concurrent reviews of the national tax system and Australian federation. This article presents an analysis of tax and funding reform options available to the states that could bolster own-source revenues and fill the funding gap left by the Commonwealth while enhancing the efficiency of the national tax system.

Item Details

Item Type:Refereed Article
Keywords:fiscal federalism, state tax reform, goods and services tax
Research Division:Studies in Human Society
Research Group:Policy and Administration
Research Field:Economic Development Policy
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Microeconomic Effects of Taxation
Author:Eccleston, R (Professor Richard Eccleston)
Author:Smith, HM (Ms Helen Smith)
ID Code:104908
Year Published:2015
Deposited By:Social Sciences
Deposited On:2015-11-25
Last Modified:2017-11-27
Downloads:0

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