Australian fiscal federalism: An empirical note of long-term trends in state and local government finance, 1969/70 to 1994/1995

Dollery, Brian E., Stewart, Mark, & Worthington, Andrew C. (2000) Australian fiscal federalism: An empirical note of long-term trends in state and local government finance, 1969/70 to 1994/1995. Economic Papers, 19(3), pp. 16-27.

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Australian fiscal federalism is characterised by vertical fiscal imbalance, with revenue-raising powers vested mainly in the Commonwealth government and expenditure functions falling largely on state and local governments. Historically a system of intergovernmental grants has been employed to address the problem of vertical fiscal imbalance. Empirical analysis of trends in state and local government funding over the period 1969/70 to 1994/95 shows two clear trends. Firstly, Special Purpose Payments (SPPs) have risen relative to General Purpose Payments (GPPs) in Commonwealth government grants, which may have diminished the autonomy of state and local governments. And secondly, state and local governments have experienced a relative decline in Commonwealth grant income and have raised an increasing proportion of their income from own source income. Despite being economically inefficient, this may have acted as a countervailing influence to increased reliance on SPPs.

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ID Code: 2652
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Fiscal federalism, intergovernmental grants, state and local government
ISSN: 0013-0354
Subjects: Australian and New Zealand Standard Research Classification > STUDIES IN HUMAN SOCIETY (160000) > POLITICAL SCIENCE (160600) > Political Science not elsewhere classified (160699)
Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Public Economics- Taxation and Revenue (140215)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2000 Economic Society of Australia
Deposited On: 24 Nov 2005 00:00
Last Modified: 05 Jan 2011 13:26

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