Moving Towards a More Effective Federation

Federations are by definition diverse; yet they also share the common goal of balancing the provision of high quality accessible services with strong fiscal management.  This is the basis of the Australian Federation – a recognition of diversity within common interests. For Western Australia, the issues of population growth, distance, demography and community expectations are to some extent unique and lead to unprecedented demands for services, utilities and transport infrastructure. These demands are also further exacerbated by unprecedented volatility in the State’s revenue sources. The challenges ahead will require rethinking about States’ revenue bases and how revenue is allocated to deliver the services or benefits governments should provide. In the Australian Federation this means looking closely at:

• the extent of Vertical Fiscal Imbalance in the Federation and, related to that, the narrow and generally inefficient tax bases available to the States;
• the inequitable Horizontal Fiscal Equalisation process that re-distributes national GST revenues among jurisdictions to the great benefit of some and the detriment of others;
• Western Australia’s net fiscal subsidy to the nation;
• impacts of the Commonwealth’s 2014-15 Budget, especially over the medium to longer term; and
• opportunities presented by the Commonwealth’s White Papers on the Federation and national tax reform.

For more information, please download the attached event program.