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2001-02 BUDGET PAPER No. 3

FEDERAL
FINANCIAL RELATIONS
2001-02

CIRCULATED BY
THE HONOURABLE PETER COSTELLO, M.P.,
TREASURER OF THE COMMONWEALTH OF AUSTRALIA, AND
THE HONOURABLE JOHN FAHEY, M.P.,
MINISTER FOR FINANCE AND ADMINISTRATION
FOR THE INFORMATION OF HONOURABLE MEMBERS
ON THE OCCASION OF THE BUDGET 2001-02

22 MAY 2001

© Commonwealth of Australia 2001

ISBN 064226193-8

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth available from Info Products. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Legislative Services, Info Products, Department of Finance and Administration, GPO Box 1920, Canberra ACT 2601.

Printed by CanPrint Communications Pty Ltd

Contents

Preface

Chapter 1: Overview and Recent Developments

Overview of Commonwealth-State financial relations
GST revenue provision and Commonwealth payments to the State/local sector
Key developments since the 2000-01 Budget

Chapter 2: GST Revenue Provision and Commonwealth Payments of General Revenue Assistance to the States and Territories

Provision of GST revenue to the States and Territories in 2000-01 and 2001-02
General revenue assistance
Revenue replacement payments under `safety net' arrangements, and mirror taxes
Horizontal fiscal equalisation

Chapter 3: Specific Purpose Payments, and General Purpose Assistance to Local Government

Specific Purpose Payments
General purpose assistance to local government

Chapter 4: Fiscal Developments in the States and Territories and Loan Council Arrangements

Fiscal developments in the States and Territories
The Australian Loan Council

Appendix A: GST Revenue

GST revenue
GST measures

Appendix B: Commonwealth Specific Purpose Payments to Other Levels of Government, Repayments of Advances, Advances and Interest Payments

Appendix C: Parameter Estimates and Further Information

Parameter estimates used in this Paper
Further information

Index

Preface

This Budget Paper presents information on the Commonwealth Government's financial relations with State, Territory and local governments.

Relationship with other Budget Papers and terminology

Budget Paper No. 3 is one of a series of Budget Papers, the purpose of which is to provide information supplementary to that in the Budget Speech. A full list of the series is printed on the inside cover of this Paper.

Chapter 4 of this Paper examines budget trends in the States and Territories. This is intended to provide an overview of fiscal developments in the States and Territories and supplement information provided in Statement 8 of Budget Paper No. 1.

Style conventions

The following style conventions are employed in this Paper.

• The Australian Capital Territory and the Northern Territory are referred to as `the Territories'. References to the `States' or `each State' include the Territories.
• The State and local government sector is denoted as the `State/local sector'. References to the `State/local sector' include the Territories unless otherwise stated.
• Figures in tables, and generally in the text, have been rounded. Discrepancies in tables between totals and sums of components reflect rounding. Percentage changes in tables are based on the underlying unrounded amounts.
• The following notations are used in the tables.

na not applicable
0 zero
- nil
$m $ million