Horizontal Fiscal Equalisation
The Australian Government has asked the Productivity Commission to undertake an inquiry into Australia's system of horizontal fiscal equalisation (HFE), which underpins the distribution of GST revenue to the States and Territories (States).
- Draft report Oct 2017
- Final report Jan 2018
The Commission invites interested people and organisations to make a written submission. Initial submissions are due by Friday 30 June 2017.
The Commission will seek further information and feedback following release of a draft report. The release date is expected to be in early October 2017.
The final inquiry report is expected to be handed to the Australian Government by 31 January 2018.
The release of the final report by the Government is the final step in the process.
Under the Productivity Commission Act 1998, the Government is required to table the report in each House of the Parliament within 25 sitting days of receipt.
The inquiry is to consider the influence the current system of HFE has on productivity, efficiency and economic growth, including the:
- movement of capital and labour across state borders
- incentives for the States to undertake fiscal (expense and revenue) reforms that improve the operation of their own jurisdictions
- States' abilities to prepare and deliver annual budgets.
The inquiry is to also consider whether there are preferable alternatives to the current system and the implications for equity across jurisdictions, efficiency and simplicity.
More detailed information can be found in the terms of reference.
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