Over the span of my life I want South Australia to contribute more in GST takings than it receives from the Commonwealth. Unless we agree to and set this goal today, we run the risk of our state becoming trapped in a cycle of dependency from Commonwealth welfare. The cultural effect across our population of year in and year out receiving welfare will be corrosive, insidious and negatively strengthening of that welfare dependence. Unless we can collectively change our mindset and set the vision that we will be contributors we will leave our children with the worst imaginable of inheritances. I want to raise my children in a confident cultural setting where the people of this state are proud of their contributions towards the GST and both secure and proud in the knowledge that they are giving more than they receive.
For 15 straight years (since the introduction of the GST) South Australia has received more from the GST than it has contributed to it. This must stop.
Should we wonder why the contributing states look down on us and don’t take us seriously, why they don’t treat us with respect or as an equal? Should we wonder why the media based in other states refer to us with annoyance rather than them displaying a genuine interest in what’s happening ins SA?
Let’s have a quick exploritave look at how GST distributions are calculated in order to determine what broad areas we should focus on.
The first issue is understanding that GST distributions to the state are determined through a complex calculation that identifies the average amount each state government needs to spend on each resident living in that state. This calculation takes into account a large range of issues which are broadly listed in the second half of the table below:
To reach the GST figure for each state the total of the per capita amount then has the states own source of revenue, net borrowing and commonwealth payments subtracted from it. The remainder to the amount the Commonwealth will then give to the states as illustrated in the figure 4 below.
The two areas which I suggest we can broadly identify as places we can improve are household incomes and the states ability to generate its own sources of revenue.
This is a starting point. I’d love to hear your views on this topic.
For further information please visit:
- Report on GST Revenue Sharing Relativities 2013 Update
- MEASURING SOCIO-ECONOMIC STATUS
- The revenue / expenditure mismatch: vertical fiscal imbalance
- Interstate equity: horizontal fiscal equalisation
Below is the graph showing that SA has never contributed more than it has received.