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Budget Paper No.2 Fiscal and Economic Outlook 2008-2009



Budget Paper No.2 Fiscal and Economic Outlook 2008-2009

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Tabled paper 1293


Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT




Tabled By Delia Lawrie


Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.




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55 The outcome for the Northern Territory in the 2008 Update was an increase in its relativity from 4.36824 to 4.51835. This translates to a notional increase of $79.8 million in the Northern Territorys share of GST revenue between updates, based on 2007-08 GST pool and population estimates. In per capita terms, the largest positive impacts were in the Northern Territory ($369.48), Victoria ($60.47) and New South Wales ($49.31). Conversely, the per capita share of GST revenue decreased for Western Australia (-$154.04), Queensland (-$97.03) and Tasmania (-$32.74). The increase in the Territorys GST is largely attributable to a revised methodology in the roads assessment. The revision to methodology was required due to unreliable data in the previous assessment. The introduction of 2006 Census data in the Commissions assessment also contributed to an increase in the Territorys relativity. The 2006 Census showed a greater than average increase in both the total and Indigenous population for the Territory. These impacts were slightly offset by updates of Australian Institute of Health and Welfare data which showed that Indigenous use of health services had fallen. The change in other states relativities between updates was predominantly due to changes in revenue raising capacity. This reflects the different stages of the economic cycle in each jurisdiction. In particular, the continued strength of the resource sector and the flow on impacts of the property market in Western Australia and Queensland have led to these states having greater capacity to raise revenue, and therefore less reliance on GST revenue. Table 5.4 shows the main contributors to the changes in state relativities between the 2007 and 2008 Updates. 2010 Review Every five years, the Commission conducts a major review of the method used to determine states per capita relativities. This process is necessary to ensure that relativities continue to reflect the contemporary public administration, service provision and revenue raising environment of state governments. The Commission received the terms of reference from the Commonwealth for the 2010 Review in May 2005. The terms of reference directed the Commission to report by February 2010 on per capita relativities that should be used to distribute GST revenue between states from 2010-11. In doing so, the Commission has been asked to examine ways to simplify the methodology used to determine the allocation of GST providing it remains consistent with the principle of horizontal fiscal equalisation. Table 5.4: Main Influences on Changes in State Allocations from the GST Pool, 2008 Update NSW Vic Qld WA SA Tas ACT NT Aust $M $M $M $M $M $M $M $M $M Population characteristics 257.9 62.6 - 228.6 - 53.0 - 52.9 - 9.8 - 3.5 27.4 347.8 Stamp duty on conveyances 180.8 93.6 - 143.8 - 138.6 3.8 - 2.8 4.8 2.3 285.2 Roads - 125.4 - 28.7 76.4 - 5.5 14.1 8.4 - 2.4 63.0 161.9 Mining revenue 42.6 59.9 - 26.1 - 102.2 17.5 1.9 4.0 2.3 128.2 Other - 14.4 129.5 - 87.2 - 27.4 23.3 - 13.9 5.3 - 15.1 158.1 Total 341.5 316.9 -409.3 -326.7 5.8 -16.2 8.2 79.8 752.2 Source: Commonwealth Grants Commission 2008 Update