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Monday, 22 April 1985
Page: 1309


Senator HARRADINE(5.30) —The importance of this report, the Commonwealth Grants Commission report on Tax Sharing Relativities, is to be found in the fact that that on 30 June this year the present legislation for the distribution of tax sharing and health grants, that is, the States (Tax Sharing and Health Grants) Act 1981, is due to expire. I agree with what Senator Peter Rae said, that it is important that an opportunity be given for a full scale debate on this document before the Senate rises. There are a number of recommendations in this document which purport-no, lest that be thought of as a reflection upon the Commission itself or the members of the Commission- which seek to go to the terms of reference which were given to the Commission. Those terms of reference are set out in Attachment II of the document that we have in front of us, in a letter to Mr Justice Else-Mitchell from the Special Minister of State, Mr Mick Young, on 10 February 1984. Those terms of reference are, inter alia:

1. Pursuant to sections 16 and 16A of the Commonwealth Grants Commission Act 1973, I hereby refer to the Commission for inquiry and report, by 31 March 1985 at the latest, on the question of the per capita relativities for distributing tax sharing grants which the Commission would regard as appropriate to apply after 1984-85 to:

(a) a distribution of tax sharing grants among the States only; and

(b) a distribution of tax sharing grants among the States and Northern Territory with the Northern Territory being treated on the same basis as the States.

What the Minister then said to the Commission was:

2. The Commission's assessment should:

(a) be based on the application of the principle that the respective tax sharing grants to which the States are entitled should enable each State to provide, without having to impose taxes and charges at levels appreciably different from the levels imposed by the other States, government services at standards not appreciably different from the standards provided by the other States; and

(b) take account of-

(i) differences in the capacities of the States to raise revenues; and

(ii) differences in the amounts required to be expended by the States in providing government services of a comparable standard.

Having considered those terms of reference the Commission has come down with a recommendation which, in effect, as Senator Rae said, means that Tasmania will get some $40m or thereabouts less than it could have expected under the current provisions. Quite frankly, I have been in negotiations with governments previously in respect of State incremental payment schemes and the like and this question has always been raised by governments at that time. Workers in the State of Tasmania have been able to point to the action that has been taken-not necessarily by the Grants Commission, because honourable senators will recall that on the last occasion, as Senator Aulich said, the Premiers Conference overrode the Grants Commission recommendation. We have always been able to point to the Commonwealth legislation, which I believe sought to implement those principles which are contained in Mr Young's letter more adequately than they are sought to be implemented by the recommendations of the Commission.

I see that my time has almost expired. I believe, as Senator Rae said, that we should indeed have an opportunity to have a full scale debate on this when consideration has been given by all of those concerned in the States as to whether this recommendation will enable the States to undertake services to the public without undue inordinate pressure on people of one particular State by comparison with the burden shared by citizens in other States.