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Wednesday, 16 February 1977
Page: 104

Mr UREN -I direct my question to the Prime Minister. Is it a fact, as reported in a Sydney newspaper on 13 January, that Western Australia is likely to lose up to $ 14m- the profit of its mining boom- in general purpose payments when the Government proceeds with its plan to change the relativities between the States?

Mr MALCOLM FRASER -No. The honourable gentleman ought to know that as a result of the changed arrangements that were introduced the payments to the States were increased by some $90m more than they would have been under the pre-existing arrangements. The funds that are available to the States to be used exactly as the States want rose by about 2 1 per cent. That obviously is much more than enough to cope with inflationary increases in costs and gives the States a greater capacity to meet their own requirements. I believe that these arrangements are well understood by the States. Significantly, they have enabled the States to introduce many concessions in their various Budgets without any need to increase charges of one kind or another or indirect taxation for which they are responsible. That also was a significant advance throughout last year.

Under the agreement that we have with the States, the review of the relativities between the States will be made at some time before 1980 or 1981. There is still a continuing discussion with the States about the appropriate body to undertake that review. The States differ in relation to it. It has been the firm view of the Commonwealth that it ought to be the Grants Commission. At the same time the criteria for that review have to be established. That has not yet been done. So the answer that I give the honourable gentleman is basically that I believe that under the proposals we have introduced all States are significantly better off than they would have been under the previous arrangements.

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