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Financial Relations Between the Australian Commonwealth and the Australian States

Published online by Cambridge University Press:  07 November 2014

Robert E. Moffat
Robert E. Moffat*
Affiliation:
Winnipeg
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Extract

The maintenance of a satisfactory relationship between the financial resources and the responsibilities of a government is one of the most fundamental problems of all states. The difficulties are greatly complicated in those states in which a central government shares its tax resources and its responsibilities with local administrations. The complexities reach their peak in federations where central, provincial, and municipal governments all have strong traditions of independence, all draw their revenue from sources which overlap to a greater or lesser degree, and all compete for the support of the same voting public. As there develops a recognition of the nation-wide and not merely the local significance of such services as schools, roads, welfare services, etc., it becomes increasingly necessary for each local government to keep its services up to a level not too far below the accepted national standard. As the cost of these government services increases, an ever increasing proportion of the wealth of the community must be diverted to these uses and the point is eventually reached where the less wealthy communities are unable to raise the tax revenue necessary to maintain an acceptable standard.

Two conflicting courses of action offer themselves as possible solutions to such a situation. On the one hand there has been a movement toward larger administrative areas and toward centralization of services under the control of the authority operating over the larger area.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 13 , Issue 3 , August 1947 , pp. 465 - 479
Copyright
Copyright © Canadian Political Science Association 1947

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References

1 Commonwealth Grants Commission, Third Report, 1936 (Canberra, 1937), p. 19.Google Scholar

2 Official Yearbook of the Commonwealth of Australia, no. 35, 1942–1943 (Canberra, 1944), p. 593.Google Scholar

3 Commonwealth Grants Commission, First Report, 1932-3-4 (Canberra, 1935), p. 27.Google Scholar

4 Maxwell, J. A., “The Recent History of the Australian Loan Council” (Canadian Journal of Economics and Political Science, vol. VI, no. 1, 02, 1940, p. 22)CrossRefGoogle Scholar; Official Yearbook of the Commonwealth of Australia, no. 34, 1941 (Canberra, 1942), p. 872.Google Scholar

5 Commonwealth Grants Commission, Fourth Report, 1937 (Canberra, 1938), p. 4.Google Scholar

6 Ibid. p. 9.

7 For a vigorous expression of the viewpoint of those who favour an extension of the powers of the Commission to make it possible to bring about a greater co-ordination of Commonwealth and state financial policies, see Professor Wood, G. L., “The Future of Federal Aid” (Economic Record, 12, 1945).Google Scholar

8 Commonwealth Grants Commission, Twelfth Report, 1945 (Canberra, 1946), p. 86.Google Scholar

9 Shirras, G. Findlay, Federal Finance in Peace and War (London, 1944), p. 116.Google Scholar

10 Professor Bailey, K. H., “The Uniform Income Tax Plan (1942)” (Economic Record, 12, 1944).Google Scholar

11 Sydney Morning Herald, Jan. 23, 1946.

12 Ibid.

13 States Grants (Tax Reimbursement) Act, 1946.