A receipt showing Goods and Services Tax (GST) is shown alongside Australian notes and coins in Sydney, on July 4, 2018. AAP Image/Sam Mooy
The way in which money from Goods and Services Tax (GST) is allocated to states—a perennial source of dispute—is back on the agenda as the treasurer of Australia’s most populous state, New South Wales (NSW), claims the system is “busted.”
Each year the Commonwealth Grants Commission (CGC) calculates the share of each state and territory, focusing on their respective financial capacity to provide similar levels of public services and not on how much they’ve contributed—a principle known as Horizontal Fiscal Equalisation (HFE).
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