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Reforming the dark art of GST forecasting

journal contribution
posted on 2023-05-18, 05:46 authored by Richard EcclestonRichard Eccleston, Timothy Woolley
A decade after its introduction the Goods and Services Tax (GST) and its role in funding the States and Territories in the Australian federation is once again on centre stage of the national political debate. As a precursor to the forthcoming review of the Australian federation, this paper focuses on a technical yet significant aspect of intergovernmental financial reform, namely enhancing the transparency and accuracy of the methods State Governments use to forecast GST revenues. Without a consistent and credible national framework for forecasting GST revenues, State forecasts will continue to deviate significantly from projections published by the Commonwealth. We argue that while the States are justified in abandoning Commonwealth projections, the GST Distribution Review’s recommendations to address the problem do not go far enough. There is need to develop a transparent national approach to forecasting GST distributions administered by the Commonwealth Grants Commission as part of the broader debate about reforming the governance of the Australian Federation. Such an approach would yield credible forecasts and is less dependent on State cooperation and information sharing than the model recommended by the GST Distribution Review.

History

Publication title

eJournal of Tax Research

Volume

12

Pagination

319-334

ISSN

1448-2398

Department/School

School of Social Sciences

Publisher

University of New South Wales * School of Taxation & Business Law (Atax)

Place of publication

Australia

Rights statement

Copyright 2014 Copyright 2014 School of Taxation and Business Law (Atax), UNSW Business School

Repository Status

  • Restricted

Socio-economic Objectives

Government and politics not elsewhere classified

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