Horizontal fiscal equalisation
Public inquiry
The Australian Government 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).
A note provided guidance as to the questions the Commission sought to ask and answer to meet the terms of reference, and may be of assistance to those preparing initial submissions. Initial submissions were due by 30 June 2017. Read the Guidance note (PDF - 316 Kb) Read the Guidance note (Word - 130 Kb)
Read the Guidance note (PDF - 316 Kb)
Read the Guidance note (Word - 130 Kb)The inquiry considered 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 also considered whether there are preferable alternatives to the current system and the implications for equity across jurisdictions, efficiency and simplicity.
