SPECIAL ISSUE
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
  • Fenna Alan
    Commonwealth Fiscal Power and Australian Federalism
    in University of New South Wales Law Journal (The) , Volume 31, Issue 2 ,  2008 ,  509-529
    Australian federalism is characterised by an unusually high degree of vertical fiscal imbalance ('VFI'). With just more than half of the service delivery responsibilities, the Commonwealth controls over 80 per cent of all tax revenue - well in excess of its requirements. Such disparity necessarily entails some system of fiscal transfer whereby the surplus funds of the Commonwealth are used to make up the corresponding shortfall in the States. The States, on average, are dependent on the Commonwealth for 45 per cent of their revenue. A substantial share of those transfers is in the form of Specific Purpose Payments ('SPPs') or 'tied grants' which the Commonwealth uses to exert policy influence in areas of State jurisdiction. While tied grants are not the only means by which the Commonwealth exerts power over the States, they are a major one. The amount of money involved is considerable, as is the number and range of programs.
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