Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Grants Commission Act - Grants Commission - Reports - Special assistance for States - 1975 (42nd)


Download PDF Download PDF

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

1975— P a rliam entary P aper N o . 233

GRANTS COMMISSION

FORTY-SECOND REPORT

1975

ON SPECIAL ASSISTANCE

FOR STATES

P resen ted p u rsu a n t to S ta tu te 15 O ctober 1975

O rdered to be p rin ted 23 O ctober 1975

THE GOVERNMENT PRINTER OF AUSTRALIA CANBERRA 1976

Printed by A dvocate Press Pty Ltd, M elbourne

GRANTS COM MISSION Forty-second Report 1975 on

Special Assistance for States

Senator the Hon. Douglas McClelland Special Minister of State Parliament House Canberra, A.C.T.

As Commissioners appointed under the provisions of the Grants Commission Act 1973-1975 we have the honour to present the following report on applications made by the States of Queensland and South Australia for special assistance from the Parliament of the Commonwealth under section 96 of the Constitution.

R. ELSE-MITCHELL, Chairman

W. R. LANE, Commissioner

R. L. MATHEWS, Commissioner

A. A. GLASSON, Secretary

(10 October 1975)

CONTENTS

Chapter Page

Introduction . . . . . . . . . 1

1. Summary . . . . . . . . . . 3

2. Inequalities Among the States . . . . . . 9

Population and Labour Force . . . . . . 10

Industrial Structure . . . . . . . . 10

Income . . . . . . . . . . 11

Expenditure . . . . . . . . . 12

Railways . . . . . . . . . . 12

Social Services . . . . . . . . . 13

Recent Changes in Economic Conditions . . . . . 16

Development and Economic Growth . . . . . 16

Loan Council Borrowing Programs . . . . . . 18

Australian Government Payments to States for Specific Capital Purposes . . . . . . . . 19

Australian Government Payments to States for Revenue Purposes 20 Recent Changes in Revenue Assistance . . . . . 20

Special Grants and Other General Revenue Payments . . 30

Budget Results of the States— 1973-74 and 1974-75 . . . 32

3. Principles and Methods . . . . . . . 34

Assessment of Financial Need . . . . . . 36

Two-part System . . . . . . . . 39

The Equalisation Standard . . . . . . . 40

Modifications . . . . . . . . . 41

Completion Grant and Assessed Need . . . . . 41

Advance Grant . . . . . . . . . 43

Grant Recommended for Payment . . . . . 43

4. Claims by the States for Special Grants . . . . . 44

State Taxation . . . . . . . . . 44

The General Approach . . . . . . . 44

Probate and Succession Duty . . . . . . 45

Stamp Duty on Insurance Other than Life Insurance . . 46

Stamp Duty on Leases . . . . . . . 46

Gift Duty . . . . . . . . . 46

CONTENTS

Chapter Page

4. Liquor Taxation . . . . . . . . 46

('Cont.) Taxes on Gambling . . . . . . . 47

Betting on Races . . . . . . . 48

Lotteries . . . . . . . . . 49

Poker Machines . . . . . . . . 51

Pay-roll Taxation . . . . . . . . 51

Land Revenue . . . . . . . . . 52

Mining Royalties . . . . . . . . 56

Treatment of Australian Government Specific Purpose Payments to States for Recurrent Purposes . . . . . 58

The Exclusion Approach . . . . . . 60

The Deduction Approach . . . . . . 61

The Inclusion Approach . . . . . . 62

The Schools Grants . . . . . . . 63

Medibank Grants for Hospitals . . . . . . 66

Expenditure on Social Services . . . . . . 66

The General Approach . . . . . . . 66

Total Population (or Per Capita) Basis . . . . 67

Eligible Population Basis . . . . . . 67

Units of Use Basis . . . . . . . 68

Social Services Modifications . . . . . . 69

Community Welfare Payments, Victoria . . . . 69

Legal Aid Fund, Victoria . . . . . . 69

Hospital, Motherhood and Child Welfare Fund, Queensland 69 Community Health Facilities, Queensland . . . 69

Community Welfare Grants Fund, South Australia . . 69

Expenditure on Education . . . . . . 69

Colleges of Advanced Education . . . . . 72

Transport of School Children . . . . . . 73

School Medical and Dental Services . . . . . 74

Libraries, Museums, Art Galleries and Other Cultural Activities . . . . . . . . 74

Hospital Expenditure . . . . . . . 75

Police . . . . . . . . . 76

Gaols . . . . . . . . . 77

Building Maintenance . . . . . . . 77

Expenditure on Aborigines . . . . . . 77

Business Undertakings . . . . . . . 79

The General Approach . . . . . . . 79

Comparison of Modified Budgetary Impact . . . 79

Exclusion of Budgetary Impact . . . . . 79

Railways . . . . . . . . . 80

Country Water Supplies, Sewerage, Irrigation and Drainage . 82 vi

CONTENTS

Chapter Page

4. Debt Charges . . . . . . . . 84

(Cont.) The General Approach . . . . . . . 84

Miscellaneous Revenue and Expenditure . . . . . 85

Australian Government Grants Towards Expenditure of a Capital Nature Applied Towards the 1973-74 Budget, New South Wales . . . . . . . 89

Special Advance of $10m by the Australian Government to Victoria, 1969-70 89

Contribution to the Julius Dam Construction Fund, Queensland 89 State Stores Board, Queensland . . . . . 90

Newcastle Graving Dock Construction Account, New South W a l e s ................................................................................................... 90

Central Queensland Powerhouse — Coal Line . . . 90

Subsidies to Racing Clubs, Queensland . . . . 91

Pay-roll Tax on Salaries and Wages of State Government Employees . . . . . . . . 91

Special Assistance to Flood Victims Appeal, Queensland . 92 Interest and Repayments on Advance to Shepparton Preserv­ ing Co. Ltd., Victoria . . . . . . . 93

Licensing Fund, Victoria . . . . . . 93

Superannuation . . . . . . . . 93

Agriculture . . . . . . . . 95

5. Budgetary Comparisons and Recommendations . . . . 98

Modifications . . . . . . . . . 98

Assessed Needs . . . . . . . . . 98

The Commission’s Methodology . . . . . 98

Taxation . . . . . . . . . 100

Territorial and Other Non-Tax Revenue . . . . 101

Expenditure on Social Services . . . . · 101

Concessional Fares — State Transport Undertakings . . 101 Revenue from Fines . . . . . . . 102

Expenditure on Technical Education . . . . 102

State Expenditure on Universities . . . . . 103

Business Undertakings . . . . . . · 104

Other Expenditure . . . . . . . 105

Australian Government Assistance . . . . ■ 106

Assessed Needs -— Summary . . . . . . 107

Recommended Completion Grants . . . . . . 107

Recommended Advance Grant . . . · . · 108

Summary of Recommendations . . . . · · 109

6. Acknowledgments . . . . . . · · 110

Appendixes . . . . . . · ■ ■ ■ 111

Index to Report . . . . . . . · · 212

vii

APPENDIXES

A ppendix Page

A. Australian Production and Economic Data . . . . I l l

B. States’ Production and Economic Data . . . . . 115

C. Differences among the Economies of the States . . . 122

Population . . . . . . . . . 122

Labour Force and Industry . . . . . . 124

Income . . . . . . . . . . 130

Expenditure . . . . . . . . . 132

Railways . . . . . . . . . 135

Social Services . . . . . . . . . 140

Indexes of State Development . . . . . . 143

D. Recent Changes in Economic Conditions in the States . . 144

E. Statistics of State Finances . . . . . . . 148

F. The Budgets of the States, 1971-72 to 1973-74 . . . . 157

New South Wales . . . . . . . . 159

Victoria . . . . . . . . . 162

Queensland . . . . . . . . . 164

South Australia . . . . . . . . 166

Western Australia . . . . . . . . 168

Tasmania . . . . . . . . . 170

G. State Taxation, 1973-74 . . . . . . . 173

Amendments to State Taxation Rates and Conditions Affecting 1973-74 ....................................................................................... 173

New South Wales Motor Taxation . . . . . . . 174

Probate Duty . . . . . . . . 174

Land Taxation . . . . . . . 174

Liquor Taxation . . . . . . . 175

Poker Machine Licence Taxation . . . . . 175

Pay-roll Taxation . . . . . . . 175

Victoria Probate Duty . . . . . . . . 175

Stamp Duties . . . . . . . . 175

Land Taxation . . . . . . . . 176

Entertainments Taxation . . . . . . 176

Racing Taxation . . . . . . . 176

Pay-roll Taxation . . . . . . . 176

viii

APPENDIXES

Appendix Page

Queensland Succession and Probate Duty . . . . . 177

Stamp Duties . . . . . . . . 177

Land Taxation . . . . . . . 177

Liquor Taxation . . . . . . . 178

Pay-roll Taxation . . . . . . . 178

South Australia Motor Taxation . . . . . . . 178

Land Taxation . . . . . . . 178

Statutory Corporation Payments . . . . . 178

Pay-roll Taxation . . . . . . . 178

Western Australia Pay-roll Taxation . . . . . . . 178

Tasmania Motor Taxation . . . . . . . 178

Casino Taxation . . . . . . . 179

Tobacco Taxation . . . . . . . 179

Pay-roll Taxation . . . . . . . 179

H. Budget Impact of State Business Undertakings . . . . 191

Railways . . . . . . . . . 191

Metropolitan Transport — Tramways and Omnibuses . . 196

Metropolitan Water Supplies, Sewerage and Drainage . . 198

Country Water Supplies, Sewerage, Irrigation and Drainage 199 Harbours . . . . . . . . . 201

Electricity . . . . . . . . . 203

Forestry . . . . . . . . . 205

Housing . . . . . . . . . 206

I. Meetings and Appearances 208

J. List of Witnesses . . . . . . . . 210

ix

TABLES

Table Page

1-1 Assessed Revenue Needs for 1973-74 . . . . . 6

1-2 Assessed Expenditure Needs for 1973-74 . . . . 6

1- 3 Assessed Special Grants for 1973-74 . . . . . 6

2- 1 State Gross Loan Expenditure on Works, Services, etc. — 1973-74 14 2-2 State Gross Loan Expenditure Per Capita on Works, Services, etc. — 1973-74 .............................................................................15

2-3 Unrecouped Debt Charges, Per Capita . . . . 17

2-4 Borrowing Programs for State Works and for Larger Semi-Governmental and Local Authorities, 1974-75 . . . 19

2-5 Australian Government Revenue Payments to the States, 1973-74 22 2-6 Australian Government Revenue Payments to the States Per Capita, 1973-74 ............................................................................. 23

2-7 Financial Assistance Grants . . . . . .

2-8 Australian Government General Revenue Payments to the States, 1970-71 to 1975-76 .................................................................. 31

2-9 State Budget Results, 1973-74 and 1974-75 . . . . 33

4-1 Field of Miscellaneous Consolidated Revenue Fund Expenditure and Unrecouped Debt Charges, All States, 1973-74 . . 86

4- 2 Number of Rural Flo!dings Classified by State and Type of Activity—1970-71 . . . . . . . 96

5- 1 Assessed Revenue Needs 1973-74 — Taxation . . . 100

5-2 Assessed Revenue Needs 1973-74 — Territorial and Other Non­ Tax Revenue . . . . . . . . 101

5-3 Pensioner and School Children Reimbursements 1973-74 . . 102 5-4 Assessed Expenditure Needs 1973-74 — Social Services . . 103 5-5 Assessed Expenditure Needs 1973-74 — Business Undertakings 104 5-6 Assessed Expenditure Needs 1973-74 — Other Expenditure . 105 5-7 Effect on Assessed Needs 1973-74 of Australian Government

Grants (Other Than Special Grants) . . . . 106

5-8 Summary of Assessed Needs and Assessed Special Grants 1973-74 107 A-l Australia — Primary Industries . . . . . . 112

A-2 Australia — Industrial Production . . . . . 113

A-3 Weekly Basic Wage and Minimum Wage Rates for Adult Males -— Metropolitan Areas . . . . . . . 114

B-l Production and Economic Data — New South Wales . . 116

B-2 Production and Economic Data — Victoria . . . 117

B-3 Production and Economic Data — Queensland . . . 118

B-4 Production and Economic Data — South Australia . . 119

B-5 Production and Economic Data — Western Australia . . 120

B-6 Production and Economic Data — Tasmania . . . 121

C-l Population of States and Proportional Distribution . . . 122

x

TABLES

Table Page

C-2 Population of States: Comparative Rates of Growth . . . 1 2 3

C-3 Population of States: Density and Urbanisation . . . 1 2 4

C-4 Population of States: Proportional Age Distribution 30 June 1973 124 C-5 Labour Force as Percentage of State Population 30 June 1971 . 125 C-6 State Government Employees as Percentage of Labour Force . 125 C-7 Labour Force: Proportional Distribution by Industry 30 June 1971 126

C-8 Farm Income as Percentage of Total Personal Income . . 126

C-9 Production Per Head of Population by Primary Industries (Excluding Mining) and Manufacturing Establishments . . 127 C-10 Rural Holdings: Proportional Distribution by Size of Holding at 31 March 1973 ............................................................................128

C -ll Factories: Proportional Distribution by Size of Factory— 1968-69 129 C-12 Personal Income Per Head of Population . . . . 1 2 9

C-13 Average Weekly Earnings Per Employed Male Unit . . . 130

C-14 Personal Income Tax Payable Per Head of Population . . 131

C-15 Cash Benefits from Public Authorities as Percentage of Total Personal Income . . . . . . . . 1 3 2

C-16 Personal Consumption Expenditure Per Flead of Population . 133 C-17 Motor Vehicles on Register per 1,000 of Population . . . 1 3 4

C-18 Instalment Credit for Retail Sales: Balances Outstanding Per Head of Population . . . . . . . . 135

C-19 Expenditure on Alcoholic Drinks Per Head of Population . . 136 C-20 State Government Railways Operations . . . . . 137

C-21 School Enrolments . . . . . . . . 138

C-22 Hospitals and Nursing Homes: Number of Approved Beds Per 1,000 of Population . . . . . . . 141

C-23 Pensioners as Percentage of State Population . . . . 142

C-24 Indexes of State Development . . . . . . 143

D-l Unemployment and Vacancies: 1974-75 and Annual Variation . 144 D-2 Average Earnings: Annual Increase . . . . . 145

D-3 Consumer Price Index: Annual Increase . . . . . 145

D-4 Retail Sales: Annual Increase . . . . . . 145

D-5 Building Activity: 1974-75 and Annual Variation . . . 146

D-6 Registration of New Motor Vehicles: 1974-75 and Annual Variation . . . . . . . . . 146

D-7 Savings Bank Deposits: Annual Increase , . . . 146

D-8 Bank Debits: Annual Increase . . . . . . 147

D-9 Instalment Credit: Annual Variation . . . . . 147

E-l Published Surpluses and Deficits of the States, 1955-56 to 1973-74 149 E-2 Payments of Special Grants Recommended by the Grants Commission and Budget Results of the Claimant States since 1955-56 ...................................................................................... 150

xi

TABLES

Table Page

E-3 Special Grants for Claimant States Recommended by the Grants Commission, 1955-56 to 1975-76 ............................................ 151

E-4 State Expenditure on Certain Social Services from Consolidated Revenue and Special Funds: Net Expenditure 1973-74 . . 152 E-5 State Taxation and Net Lottery Revenue, 1973-74 . . . 154

E-6 State Taxation and Net Lottery Revenue Per Capita, 1973-74 155 E-7 State Taxation and Net Lottery Revenue, 1955-56 to 1973-74 156 F-l Budget Summaries — New South Wales . . . . 160

F-2 Budget Summaries ■ — Victoria . . . . . . 1 6 3

F-3 Budget Summaries — Queensland . . . . . 165

F-4 Budget Summaries — South Australia . . . . . 167

F-5 Budget Summaries ■ — Western Australia . . . . 169

F-6 Budget Summaries — Tasmania . . . . . 171

G-l Motor Taxation as at 30 June 1974 . . . . . 180

G-2 State Probate and Succession Duties as at 30 June 1974 . . 181

G-3 Stamp Duties as at 30 June 1974 . . . . . 1 8 2

G-4 Land Taxation as at 30 June 1974 . . . . . 184

G-5 Entertainments Taxation as at 30 June 1974 . . . . 1 8 5

G-6 Liquor Taxation as at 30 June 1974 . . . . . 1 8 5

G-7 Racing Taxation as at 30 June 1974 . . . . . 186

G-8 Poker Machine Licence Taxes as at 30 June 1974 . . . 188

G-9 Revenue from Lotteries, 1973-74 . . . . . 1 8 8

G-10 Statutory Corporation Payments as at 30 June 1974 . . 189

G -ll Casino Taxation as at 30 June 1974 . . . . . 1 8 9

G-12 Tobacco Taxation, 1973-74 . . . . . . 190

G-13 Pay-roll Taxation as at 30 June 1974 . . . . . 190

H-l Railway Revenue . . . . . . . . 1 9 2

H-2 Railway Operating Expenditure . . . . . . 1 9 2

H-3 Railway Net Operating Results . . . . . . 1 9 3

H-4 Published Railway Deficits . . . . . . 1 9 3

El-5 Net Impact of Railways on State Finances . . . . 1 9 4

H-6 Metropolitan Transport — Tramways and Omnibuses: Calculated Financial Results . . . . . . . 1 9 6

H-7 Country Water Supplies, etc.: Budget Costs . . . . 200

H-8 Country Water Supplies, etc.: Budget Costs Per Capita . . 200

xii

Introduction

In the Autumn Session of 1973 the Grants Commission Act 1973 was enacted by the Commonwealth Parliament, repealing the Commonwealth Grants Com­ mission Act 1933-1957 and establishing a new Commission to inquire into and report upon applications for financial assistance by States and by approved

regional organisations of local governing bodies. The new Act was assented to on 18 June 1973 and proclaimed on 20 September 1973.

The Act provided for the continuation of the Commission’s traditional role of inquiring into applications by States for grants of special financial assistance. The Commission’s role in relation to local governing bodies extended its investiga­ tions into new dimensions of public finance, which posed many problems in

determining the principles and practices to be followed in assessing the relative needs of local governing bodies in the diverse regions of the Australian States.

The Commission’s resources were substantially augmented to enable it to carry out its new task. The Act provided for an enlarged Commission comprising a full­ time Chairman and from four to six members who could be appointed on a full­ time or a part-time basis. The Chairman and two part-time members continued

to perform the Commission’s traditional role of inquiry into applications by States for financial assistance and four full-time members, under the guidance of the Chairman, undertook the inquiries into applications made on behalf of local governing bodies.

The Grants Commission Act 1975 was enacted by the Commonwealth Parlia­ ment in the Autumn Session of 1975 and provided for an increase to seven in the maximum number of members of the Commission, other than the Chairman. The new Act was assented to on 19 June 1975.

As required under the terms of the Act, this Report is made to the Special Minister of State, and is concerned only with applications by States for special financial assistance. Applications by approved regional organisations of local governing bodies for grants of financial assistance are the subject of a separate

Report (see Grants Commission 2nd Report 1975 on Financial Assistance for Local Government).

Members

The Grants Commission Act 1973 provided for the continuation of existing appointments made under the previous Act.

Following the presentation of the Commission’s 41st Report (1974), the appoint­ ment of Sir Leslie Melville, K.B.E., as Chairman of the Commission, expired. On 24 September 1974, the Australian Government announced the appointment of The Honourable Mr Justice Rae Else-Mitchell as Chairman of the Commission for a

period of five years commencing 1 October 1974. The Commission wishes to record its appreciation of the outstanding contribution made by Sir Leslie to the work of the Commission during the nine years of his membership, including eight as Chairman.

1

Mr W. R. Lane, who was re-appointed as a part-time member for a period of three years ending 30 September 1976, Professor R. L. Mathews, whose appoint­ ment as a part-time member is for three years ending 14 December 1975, M r A. N. Walls, whose appointment as a full-time member is for three years ending 19 Sep­ tember 1976, and Mr L. E. Whalan, whose appointment as a full-time member is for five years ending 19 September 1978, have continued to serve on the Com­ mission.

Mr J. F. Nimmo, C.B.E., resigned from his position as a full-time member of the Commission on 31 December 1974 and Mr W. J. Sheehan resigned as a full­ time member on 30 June 1975.

Mr D. V. Moye, former Secretary of the Grants Commission, who had been appointed as an acting full-time member of the Commission from 1 March 1974, was appointed as a full-time member for a period of five years commencing 1 January 1975. Mr P. G. Collins, formerly an Acting Commissioner of the Snowy Mountains Authority, was appointed as a full-time member of the Commission for a period of five years commencing 1 September 1975. Mr W. J. Heron, a former Assistant Secretary of the State Department of Local Government in Western Australia, was appointed as a full-time member of the Commission for a period of fwe years commencing 22 September 1975.

2

CHAPTER 1

Summary

1.1 In this Report the Commission makes its assessment of grants of special assistance (referred to in this Report as special grants) recommended for payment to Queensland and South Australia in 1975-76. For Queensland, the grant recom­ mended for payment in 1975-76 consists of two parts. The first part, called the

completion grant, is a final assessment of the assistance recommended for Queens­ land for 1973-74, for which the State received an advance grant in that year. The second part, called the advance grant, is the Commission’s estimate of the special assistance that is likely to be justified for Queensland for 1975-76. For South

Australia, the grant recommended for payment in 1975-76 comprises only a com­ pletion grant for 1973-74. For the reasons explained in paragraph 1.4, no advance grant is recommended for South Australia.

1.2 In its 40th Report (1973), the Commission recommended payment of advance grants for the year 1973-74 of $10m to Queensland and $15m to South Australia.

1.3 An application was made by the State of Queensland under section 96 of the Constitution for a grant of special assistance from the Australian Govern­ ment for the year 1975-76. In accordance with the provisions of the Grants Com­ mission Act 1973-1975 this application was referred to the Commission for inquiry

and report. At the Commission’s Hearings in Canberra in July 1975, the State submitted a claim for an advance grant for the year 1975-76 pending the Com­ mission’s detailed examination of its budgetary needs for that year.

1.4 As a result of an agreement between the Australian and the South Australian Governments governing the transfer of the non-metropolitan South Australian railway system to the Australian Government, South Australia ceased to be a claimant State before the Grants Commission as from 1 July 1975. In

accordance with the terms of the agreement, the Commission has assessed a com­ pletion grant for South Australia for 1973-74, but no advance grant is recom­ mended for the year 1975-76. Further particulars of other financial arrangements covered by the agreement are given in paragraphs 2.55 and 2.56 of Chapter 2 of

this Report.

1.5 Following discussions requested by the Premier of Tasmania at the Premiers’ Conference on 7 June 1974, the Australian Government agreed that an additional amount of $15m would be paid to Tasmania in 1974-75 on the under­ standing that, as from the beginning of 1974-75, Tasmania would cease to apply for special grants under the Grants Commission procedures. The amount of $15m

payable to Tasmania was to be incorporated in the State’s base grant for 1974-75 for purposes of the financial assistance grants formula under the States Grants Act. It was also agreed between the Australian and Tasmanian Governments that no completion grants would be paid to Tasmania for 1972-73 or 1973-74.

1.6 On 18 June 1975 the Premier of Tasmania wrote to the Prime Minister formally seeking a special grant for Tasmania under the Grants Commission pro­ cedures for the years 1974-75 and 1975-76. These applications have been referred 3

to the Commission for inquiry and report. At this stage, Tasmania has not sought an advance grant for 1975-76. For this reason, no advance grant for Tasmania has been recommended in this Report. If Tasmania subsequently applies for an advance grant for 1975-76, that will be the subject of a special Report.

1.7 In the course of its inquiries for the purpose of determining the amounts to be recommended as grants in this Report, the Commission has given special attention to several issues raised in the submissions of the Australian Treasury and the claimant States. The discussions and decisions taken on these matters are summarised in Chapter 3, Principles and Methods, and Chapter 4, Claims by the States for Special Grants.

1.8 To enable a claimant State to function at a standard not appreciably below that of other States without having to levy taxation and other charges of greater severity than in those other States, its revenue needs to be supplemented because o f: (a) its lower capacity to raise taxes and other revenue; and

(b) its need to incur higher costs in order to provide comparable govern­ mental services. These are referred to as revenue needs and expenditure needs respectively.

1.9 To assess the amount of these needs the Commission has compared the fiscal capacity of each claimant State with that of New South Wales and Victoria, taking into account differences in revenue-raising capacity and differences in the cost of providing comparable services. A two-State standard, based on a simple

average for New South Wales and Victoria, was first adopted for the year of review 1960-61, following a change in financial arrangements between the Australian Government and the States under which South Australia ceased making annual applications for special grants to be recommended by the Commission. At various times since then the standard to be used in determining the grants recommended has been the subject of discussion between the interested parties. The Australian Treasury has urged the use of a standard embracing all non-claimant States whereas the claimant States have supported the use of a two-State standard based on New South Wales and Victoria. These discussions have been summarised in earlier Reports (see particularly, the 35th Report (1968)). However, since the advent of Queensland as a claimant State the Australian Treasury has chosen not to pursue this question.

1.10 In this Report the Commission has again used the revised method of calculation and presentation of the claimant States’ financial needs which it intro­ duced in the 41st Report (1974). Under this procedure the Commission first modifies the published budgetary accounts of the standard and the claimant States to render them comparable for its purposes. On the basis of these modified accounts and other relevant information, it makes an assessment of need for each claimant State for each of the various categories of revenue and expenditure. From the aggregate of assessed needs, it deducts that amount which is met by way of differentials in revenue payments from the Australian Government other than the special grants recommended by the Commission1, and the remaining amount for

1. The revenue payments which are deducted by the Commission are indicated in p ara­ graphs 5.22 to 5.24 and Table 5-7 of this Report. O ther revenue payments from the

A ustralian Governm ent are not deducted from assessed needs because their expenditure by the States is not taken into account in assessing needs. The treatm ent of A ustralian Government specific purpose paym ents to the States is discussed in C hapter 4, paragraphs 4.67 to 4.93.

4

each claimant State becomes the amount of the assessed special grant. Any differ­ ence between the assessed grant for the year of review 1973-74 and the advance special grant already paid to the State on the basis of a preliminary assessment

of its needs for that year becomes the amount of the completion grant recom­ mended for that year. These matters are discussed in greater detail in Chapters 3 to 5 of this Report.

1.11 To assess the revenue needs of a claimant State, the Commission has calculated the amount of revenue the State could have raised from taxes, royalties, fees or charges had its tax rates or charges been of standard severity. It has then compared this amount with the product of the per capita revenue in the

standard States and the population of the claimant State. The product is a measure of the revenue that the claimant State could have raised with rates and charges of standard severity, if its revenue capacity had been as high as that of the standard

States. The difference between the two amounts is a measure of the need of the State for financial assistance arising from its lower capacity to raise revenue.1

1.12 To assess the expenditure needs of the State in relation to social services and other fields of expenditure, the Commission has used a variety of methods. In some cases it has judged that the claimant State could provide a service at the same level as in the standard States if it spent as much per capita, with some

addition for special difficulties due to such factors as small scale of operations or the servicing of remote or sparsely settled areas. Library services provide an example of difficulties due to small scale of operations and police services in Queensland an example of difficulties in servicing remote or sparsely settled areas.

The claimant State’s need is then measured by the additional costs arising from these difficulties. In other cases, for example education, the Commission has judged that the needs of a claimant State arise from its having to provide for a larger proportion of the population than the standard States (in the case of education

this refers to the ratio of school enrolments to State population). Its needs are then measured by the cost of providing this ‘excess’ population with the standard level of services.1 2

1.13 For expenditure on general administration and some other functions, the Commission has so far been unable to find a satisfactory basis for comparison. It has accepted, as a measure of the State’s needs, the difference between its actual expenditure and an amount equivalent to the expenditure per capita of the standard

States multiplied by the population of the claimant State, subject to an examination by the Commission of the expenditure levels and trends in the claimant and the standard States. Miscellaneous items of revenue have been treated in a similar way.

1.14 In Appendix F the audited accounts of the States relating to their budgets for 1971-72, 1972-73 and 1973-74 are examined and summarised. For the purpose of determining the grants recommended for 1973-74, in this Report the Commission is concerned with the audited accounts of New South Wales,

Victoria, Queensland and South Australia for that year.

1.15 The Commission’s assessments of the claimant States’ revenue needs arising from lower capacity to raise taxation and other revenue are shown in Table 1-1.

1. In any particular field the need is measured as a negative am ount if the claim ant State has an above-standard revenue capacity. 2. The need as measured in any particular area of expenditure may be either positive or negative.

5

Table 1-1 — ASSESSED REVENUE NEEDS FOR 1973-74

Queensland South Australia

Taxation . . . . . . . . .

$'000 45,936

$’000 49,462

Land revenue . . . . . . . . — 10,054 1,126

Mining royalties . . . . . . . . — 10,696 2,809

Other non-tax r e v e n u e ............................................................ 8,858 1,483

Assessed revenue needs . . . . . . . 34,044 54,880

1.16 The Commission’s assessments of the claimant States’ expenditure needs arising from the higher costs of providing services are shown in Table 1-2.

Table 1-2 — ASSESSED EXPENDITURE NEEDS FOR 1973-74

Queensland South Australia

Social services . . . . . . . .

$'000 23,382

$'000 22,696

Business undertakings . . . . . . . 11,327 — 6,702

Unrecouped debt charges, n.e.i. . . . . . 6,262 1,235

Other expenditure . . . . . . . . 27,612 5,047

Assessed expenditure needs . . . . . . 68,583 22,276

1.17 These revenue and expenditure needs are partly met through grants other than the special grants recommended by the Commission. These other grants represent larger amounts per head of population for the claimant States than for the standard States. The special grants represent the Commission’s assessment of the additional amounts needed by the claimant States to bring the total amounts of assistance up to their needs as assessed by the Commission. Advance grants had been recommended and paid in 1973-74 before the needs of the claimant States could be assessed accurately on the basis of audited accounts. The differences between the assessed special grants and the advance grants represent the assessed completion grants. The determination of the assessed completion grant is shown

in Table 1-3.

Table 1-3 — ASSESSED SPECIAU GRANTS FOR 1973-74

Queensland South Australia

$'000 $'000

Revenue needs . . . . . . 34,044 54,880

Expenditure needs . . . . . . . 68,583 22,276

Total assessed needs . . . . . . .

Less: Assessed needs m et from other A ustralian Govern- 102,627 77,156

ment grants . . . . . . . . 81,327 59,656

Assessed special grant . . . . 21,300 17,500

Advance grant paid in 1973-74 .............................................. 10,000 15,000

Assessed completion grant . . . . . . 11,300 2,500

6

1.18 In determining the recommended completion grant, the Commission previously took into account any completion grants which had been assessed in the past but had not been used, as explained in paragraph 3.25 of Chapter 3 of this Report. Queensland has not had any unused assessed grants available for credit. As explained in paragraph 1.17 of the 41st Report (1974), unused assessed grants available for credit to South Australia at the end of the 1972-73

year of review amounted to $6,434,000. However, under the terms of the agreement between the Australian and the South Australian Governments governing the transfer of the non-metropolitan South Australian railway system to the Australian Government (see paragraph 2.55), this amount was paid to South Australia during

1974- 75. Therefore, it has not been taken into account in determining the recom­ mended completion grant for 1973-74.

1.19 Up to and including 1971-72, as explained in paragraph 3.24 of this Report, the recommended amount of the completion grant was subject to the limitation that it should not exceed (save in exceptional circumstances) the amount which would have resulted in the claimant State having a modified balanced budget

result for the year of review. This normally limited the completion grant to the amount of the claimant State’s modified budget deficit (irrespective of the budget standard). For the year of review 1972-73 the Commission decided to remove this

limitation on the understanding that, where the recommended grant brought a claimant State’s modified budget result into surplus, the additional funds so provided would be spent in the year of payment and not accumulated as cash balances. Following discussions at the Hearings in 1974-75, the Commission has decided, for

the year of review 1973-74 and future years, to remove the remaining limitation on the amount of the completion grant referred to above. A summary of the discussion which led to this decision is given in paragraphs 3.24 to 3.31 of Chapter 3 of this Report.

1.20 The amounts recommended for payment to the claimant States in 1975- 76 have been determined in two parts. Completion grants for 1973-74 (calculated as above on the basis of audited accounts and other information for that year) are recommended for payment to Queensland and South Australia. An advance grant for 1975-76, which will be subject to adjustment by way of a

completion grant, positive or negative as the case may be, when 1975-76 becomes the year of review, is recommended for payment to Queensland. As mentioned in paragraph 1.4, South Australia ceased to be a claimant State before the Grants Commission as from 1 July 1975, so no advance grant is recommended for that

State. On the basis of preliminary figures of Queensland’s budget prospects and other available information, the Commission recommends that an advance grant be paid to that State for 1975-76 as follows:

RECOMMENDED ADVANCE GRANT FOR 1975-76

$’000

Queensland ............................................ 25,000

1.21 The total special grants recommended for payment to Queensland and South Australia in 1975-76 are therefore as follows:

7

SPECIAL GRANTS RECOMMENDED FOR PAYMENT IN

Queensland

$’000 $’000

Advance grant for 1975-76 ............................................. 25,000

Completion grant for 1973-74 .................................... 11,300 36,300

South Australia Completion grant for 1973-74 .................................... 2,500

Total amount recommended for payment in 1975-76 38,800

8

CHAPTER 2

Inequalities Among the States 2.1 The economies of the Australian States differ from one another in ways which have an important bearing on the relative capacity of the several State governments to provide services for individuals and businesses. Among these

differences are those of area, climate, topography, natural resources, size and distribution of population and productive capacity, and levels of income and expenditure. In addition, there are considerable differences among States in the average rate of economic growth, as reflected in the growth of population and

output of goods and services.

2.2 These differences among the economies of the States give rise to fiscal inequalities. In general the fiscal inequalities take the form of differences in relative capacity to raise revenue from State taxes and other charges, in the relative cost of providing State government services and meeting public debt charges, and in the budgetary impact of the operations of State business under­ takings. In total they may be described as differences in fiscal capacity. These

interstate differences in fiscal capacity may be partially or wholly offset by the pattern of distribution of financial assistance by the Australian Government to the States, and the Commission takes this into account in assessing the need for a special grant. However, in comparing the effects on State budgets of the under­

lying interstate economic differences it is convenient to set the financial assistance to the States on one side. Thus a State may be said to have below-average fiscal capacity if, in the absence of financial assistance from the Australian Government, the revenue obtained from taxes and charges of average overall severity would not

be sufficient to enable it to provide services of average overall scope and standard.

2.3 Interstate inequalities of fiscal capacity are not a transitory characteristic of the Australian federation. However, the relative positions of the States are subject to change and most forms of financial assistance by the Australian Gov­ ernment are subject to periodic review. For some years the Commission has

commented upon these fiscal inequalities and has reviewed the amounts of the special grants in relation both to other payments by the Australian Government to the States and to the underlying differences in resources and economic condi­ tions of the States themselves. Detailed comments, with supporting statistical material, have been included in Appendix C; a summary of the main features, with particular reference to the claimant States, is given in this chapter. Addi­

tional statistical material, relating to recent changes in economic conditions in the States, is presented in Appendix D, which supplements the production and economic data given in Appendix B. This chapter includes a comparison of the preliminary budget results of the States for 1974-75 with their published results for

1973-74. More detailed comments concerning changes in State budgets between 1971-72 and 1973-74 are given in Appendix F. As in previous years, this chapter also contains a brief outline of Loan Council borrowing programs and payments by the Australian Government to the States, and comments on the size of the

special grants recommended by the Commission.

9

Population and Labour Force

2.4 Population is very unevenly distributed among the States, almost two- thirds of the total population being concentrated in New South Wales and Victoria. There is considerable variation between States in the rate of population growth. Queensland, whose share of the six-State total has been fairly stable over most of the period covered by Table C-l of Appendix C, shows the highest rate of popula­ tion growth for the last three years with a marked increase in its share of the six- State total. It has a relatively small proportion of its urban population in the major urban area. For the first time in recent years South Australia’s growth rate has exceeded the Australian average, and its share of the six-State total, which had been declining steadily since 1966, increased slightly. Compared with the other

States, it has the third highest percentage of its population in the major urban area but the lowest in other urban areas. Tasmania has the highest proportion of any State in the rural areas of comparatively low population density, and in contrast to the other States has only one-third of its total population in the major urban area.

2.5 There are some significant interstate differences in age distribution. Tas­ mania has the highest proportion of population in the age range 0 to 18, the lowest proportion in the ‘working-age’ group (19 to 64) and a comparatively low pro­ portion of elderly people (65 and over). New South Wales and Victoria have the lowest proportions in the ‘school-age’ group and the highest in the ‘working-age’ section of the population. Queensland has the second lowest proportion in the ‘working-age’ group but the highest proportion of elderly people.

2.6 These demographic factors may contribute to a State’s comparatively low fiscal capacity. A greater proportion of young people tends to produce a relatively greater need for expenditure on education and for infant and child welfare services. Also, a comparatively small population or a high percentage of people

residing in rural areas of low population density may indicate a need to incur greater expenditure per head of population in order to provide comparable govern­ ment services. Tasmania thus has the highest percentage of State government employees to labour force. Insofar as the number in the labour force reflects the number of potential taxpayers, a relatively small ratio of labour force to population suggests a relatively low taxable capacity.

2.7 On the other hand there may be some offsetting factors. For example, the need to provide State government assistance for elderly people is likely to be comparatively small for Tasmania to the extent that it has a small percentage of aged persons. The reverse situation might apply to Queensland, which has the highest proportion of elderly people. Also, a comparatively low rate of population growth probably restricts the need for State government expenditure in certain

fields, especially in some areas of capital expenditure. But it seems reasonably certain that, on balance, the claimant States’ relatively low fiscal capacities are in part due to demographic factors.

Industrial Structure

2.8 There are large differences among the industrial structures of the States, as indicated by the distribution of labour force among types of industry. In terms of the degree of ‘industrialisation’, as measured by the percentage of the labour force in ‘manufacturing’, Tasmania occupies an intermediate position between the

10

highly industrialised States of Victoria, New South Wales and South Australia on the one hand and Queensland and Western Australia on the other. Apart from Victoria, South Australia has a lower proportion of its labour force in ‘mining and quarrying’ and ‘transport, storage and communication’ than any other State. Apart

from Western Australia, Tasmania has the highest proportion of labour force engaged in ‘mining and quarrying’, but it has the lowest of any State in the ‘commerce, finance, property, etc.’ industry group.

2.9 These differences in the industrial structures of the States tend also to be reflected in per head of population data for ‘local value of production’ and ‘value added’. In addition, within the primary industry field there are considerable differences between States in the relative importance of the different primary

industries. As a proportion of the total local value per capita of primary production (excluding mining), crops and pastoral activities taken together contribute more in Queensland, South Australia and Western Australia than in the other States. Dairying accounts for a much larger proportion of primary production, and a larger per capita value, in Victoria and Tasmania. The local value of forestry

production per capita in Tasmania greatly exceeds that of the other States. These primary industry characteristics also affect the size structure of rural holdings. Victoria and Tasmania have comparatively few large holdings. The figures for manufacturing establishments also show considerable differences between States in the relative importance of particular manufacturing industries, as indicated by the proportion of ‘value added’ in different manufacturing industries in each State. For example, in South Australia the proportion associated with transport

equipment is much higher than in any other State. By contrast, in Tasmania the proportion in this field is well below that of any other State, whereas the propor­ tions in paper and paper products and basic metal products are higher than in other States. Queensland has the highest proportion in the food, beverages and tobacco group.

Income

2.10 There are considerable differences between the States in levels of personal income even after allowing for seasonal and other fluctuations which may affect the relativities between States in any particular year. For 1973-74 the level of personal income per head of population in Tasmania is approximately 13

per cent below the Australian average while Queensland is approximately 9 per cent below and South Australia (including the Northern Territory) is approxi­ mately 4 per cent below. New South Wales (including the Australian Capital Territory) and Victoria are well above the other States. South Australia, which

had the highest average among the other States for the period 1955-56 to 1964-65, has been overtaken by Western Australia, which has risen to equality with the Australian average in 1973-74.

2.11 A somewhat similar general picture is given by the comparisons of average weekly earnings per employed male unit and of personal income tax payable per head of population, in that New South Wales and Victoria are above the Australian average. Generally, for weekly earnings the disparities between

States are not so large as for per capita personal incomes, reflecting among other factors a tendency for the States with relatively high per capita personal incomes to have relatively high percentages of their population in the labour force. On the other hand, the disparities between States in income tax payable per capita

are somewhat larger than those for personal incomes per capita, reflecting

11

additional contributing factors, such as the size distribution of incomes and allowable deductions.

2.12 There can be little doubt that these interstate differences in levels of personal income contribute towards differences in relative State taxable capacity. To the extent that interstate differences in average income levels reflect differences in the percentage of population in the labour force, they are likely also to give rise to differences in the need for State social services in certain fields. In the States with relatively low average income levels there is a tendency for cash benefits from public authorities to constitute a relatively high percentage of total personal income.

Expenditure

2.13 Interstate differences in various aspects of expenditure in the private sector of the economy have a bearing on relative State taxable capacity through their effects on the size of various tax bases.

2.14 Interstate comparisons of personal consumption expenditure per head of population show disparities between States broadly similar to those shown by comparisons of personal income levels. The 1973-74 figures show Queensland, South Australia and Tasmania in a range 8 to 11 per cent below the Australian average and Western Australia 4 per cent below that average.

2.15 Notably different patterns of interstate relativities are shown by other statistics, presented in Appendix C, which reflect certain aspects of expenditure levels. The figures of motor vehicles on register per 1,000 of population show New South Wales and Victoria below the Australian average and the other States above it. Balances outstanding per head of population in relation to instalment credit for retail sales show New South Wales, Queensland and Western Australia above the Australian average (with Western Australia 12 per cent above), South Australia and Tasmania slightly below, and Victoria 16 per cent below that average. Expenditure per capita on alcoholic drinks is above the Australian average in New South Wales and Western Australia, while the remaining States are below the average.

Railways

2.16 Table C-20 (Appendix C) indicates that there are large differences between States in factors affecting railway operations. These include much greater density of passenger traffic and a much higher proportion of gross earnings attributable to coaching in New South Wales and Victoria compared with the other States. There are also notable differences between States in operating results; Queensland has recorded a surplus in the most recent period covered by the table and the remaining States substantial deficits. Railway employment as a per­ centage of population is lowest in Tasmania and highest in Queensland, followed by Western Australia. The last two States also have the highest ratio of route kilometres to population.

2.17 Comparison of the three periods covered by Table C-20 shows a reduc­ tion in the ratio of route kilometres to population, reflecting both population growth and closure of some branch lines. All States except Queensland and, in the latest period, Western Australia show a reduction in passenger journeys per route

12

kilometre, with Tasmania showing the largest relative decline. The density of goods and livestock traffic, as measured by tonnes carried per route kilometre, has increased in each period in all States except New South Wales, where it declined slightly in the most recent period. The largest relative increases occurred in Queens­ land and Western Australia and the smallest in Victoria. As between the earliest

and latest periods covered by Table C-20, only Queensland and Western Australia show improved operating results per capita on the basis used by the Commission. Railway employment relative to population has shown a large decline in all States, particularly in Queensland and Western Australia.

2.18 A further discussion of State railway operations and their impact on State budgets is given in Appendix H.

Social Services

2.19 In the field of education, the factors which influence the levels of expenditure per head of population include: (a) the ratio of school-age population to total population; ( b) the proportion of school-age population attending school; and

(c) the ratio of enrolments at government schools to total school enrol­ ments. Table C-4 of Appendix C indicates that the ratio of school-age population (5-18 years) to total population is considerably lower in New South Wales and Victoria than in the other States. However, as indicated in section (i) of Table C-21 in Appendix C, New South Wales and Victoria have higher ratios of total school

enrolments to school-age population than the other States. This applies also to enrolments in non-government schools, as indicated in section (iii) of the table, whereas the proportion for government school enrolments is highest in South Australia and Tasmania (section (ii) of the table). The higher ratios for govern­

ment schools in South Australia and Tasmania are a reflection partly of the high percentage of population in the school-age group in those States and partly of their higher proportion of government to total school enrolments (see section (iv) ). Since 1954 there has been a noticeable increase in the ratio of government school enrolments to total school enrolments in every State and some changes in the

relative positions of the different States. New South Wales and Victoria have substantially higher proportions of students at non-government schools than the other States. Since the average cost per pupil to the State budget is greater in all States for pupils attending government schools than for those in non-government

schools, the figures in sections (v) and (vi) have a direct bearing on relative costs per head of population in the different States. Enrolments in government schools as a percentage of State population are much higher in South Australia and Tasmania than in the other States.

2.20 The number of public and private hospital beds and State and participating nursing home beds available in the different States, as measured per 1,000 of population, has a bearing on expenditure by State governments in support of hospitals and nursing homes. There are large differences between States: for public

hospital and State nursing home beds, Queensland, Western Australia and Tasmania are considerably above the six-State average, while Victoria and South Australia are considerably below the average. For private hospital and participating nursing home beds, New South Wales, South Australia and Western Australia are well

above the six-State average while Victoria is approximately 34 per cent below. For

13

Table 2-1 — STATE GROSS LOAN EXPENDITURE ON WORKS, SERVICES, ETC. — 1973-74

South Australia

$’000

7,950 4,400 2,000 6,497 21,835

8,331 3,000 68,885

20 600

3,300 262 1,268 32,987

167,976

164,353 149,440

1,448,200

Western Australia Tasmania

$’000

9,968

2,505 25,449

' 3,467 34,887

' 5,600 24

1,313

506

1,700 236 39 1,273

86,966

$’000

9,174

23,000 28,100 320

' 1,873

100 750

69,835

95,488 92,330

1,068,000

76,689 72,888

747,000

Total

$’000

110,343 15,885 6,691 32,274 140,130

8,332 67,721 460,139 23,464

6,468 9,331

3,917 4,875

43,806

' 3,163 3,550 25,640 1,362

9,176 41,629

1,017,896

1,071,056 976,467

10,963,400

(a) Expenditure from W orks and Services Account. (b) Excludes expenditure from A ustralian Governm ent loans under Australian Government-State Housing Agreement. (c) Included in Public works and services— W ater supply. (d) Aggregate gross loan expenditure is not available. F or details of aggregate net loan expenditure to 30 June 1971 see 41st Report, pages 13

and 14.

Source: A ustralian Bureau of Statistics. Any discrepancies between totals and sums of com ponents in the table are due to rounding.

Table 2-2 — STATE GROSS LOAN EXPENDITURE PER CAPITA ON WORKS, SERVICES, E T C ,— 1973-74

the combined total of public and private hospital and State and participating nursing home beds per 1,000 of population, New South Wales, Queensland and Western Australia are in a range from 10 to 16 per cent above average, Tasmania is 8 per cent above, South Australia 5 per cent below and Victoria 24 per cent below average.

Recent Changes in Economic Conditions 2.21 Various statistical indicators, relating to changes in economic condi­ tions in each of the States and in Australia as a whole in each of the years since 1970- 71, are presented in Appendix D. These supplement the production and economic data for each State presented in Appendix B.

Development and Economic Growth 2.22 Various indexes reflecting aspects of development in the different States over a period from 1961-62 to 1973-74 are presented in Table C-24 (Appen­ dix C). These indexes illustrate the complexity of the factors involved in State

development.

2.23 In all States and especially in the less populous States, heavy loan expenditure has been incurred on the development of resources and the provision of essential services. The aggregate total of net loan expenditure almost doubled in the decade ended 30 June 1971 in all States. The factors mainly responsible have included: an increase in demand for education facilities and housing arising from population growth and rising living standards; economic growth increasing the need for electricity and water supplies; the development and exploitation of natural resources such as land settlement and mining with a consequential increase in demand for transportation and communication facilities and related services.

2.24 Tables 2-1 and 2-2 set out details of State gross loan expenditure on works and services for 1973-74, together with totals of gross loan expenditure for 1971- 72 and 1972-73. In addition, aggregate net loan expenditure by the States to 30 June 1971 (the latest information available) is shown. The tables are presented on a total and per capita basis respectively. Table 2-2 shows that on a per capita basis gross loan expenditure during the past three years in South Australia and

Tasmania greatly exceeded that in the other States. In comparing the figures for the various States, however, the financing of a relatively high proportion of public capital expenditure from loans raised by semi-governmental bodies in New South Wales, Victoria and Queensland, particularly for electricity and metropolitan water supply, must be taken into account. This expenditure is not included in the tables. Furthermore, much of the capital expenditure of the electricity undertakings in New South Wales and Victoria has been financed from the internal funds of the undertakings themselves, thereby tending to reduce their call on State loan funds. The per capita figures for aggregate net loan expenditure to 30 June 1971 show that expenditure was much higher in South Australia, Western Australia and

Tasmania than in the other States.

2.25 The particular characteristics of each State, including the topography and climate and the distribution and character of natural resources, population and economic activity, influence the general pattern of gross loan expenditure. The figures for 1973-74 shown in Table 2-1 may reflect the timing of particular projects. For example, loan expenditure on railways in Tasmania in that year was much higher than in the other States, due mainly to the construction of the Bell Bay Railway.

16

2.26 In all States a considerable burden of debt charges falls upon the State budget, arising in part from loan expenditure on various public works from which no direct income is received, such as roads, bridges and public buildings (particu­ larly schools and hospitals), and partly from business undertakings from which

the Treasury does not recoup the whole of the debt charges related to their operations. Information about unrecovered debt charges is not easily obtainable from published figures. The differing practices of the States in their treatment of debt charges and recoveries, especially for business undertakings, make it

extremely difficult to obtain figures which are comparable. However, the Commis­ sion has estimated the amounts per capita of the unrecovered debt charges included in the budgets of each State for the years 1971-72 to 1973-74 (see Table 2-3).

Table 2-3 — UNRECOUPED DEBT CHARGES, PER CAPITA

1971-72 1972-73 1973-74

$ $ $

New South W a l e s ........................................ 33.32 34.97 35.82

Victoria . . . . . . 36.62 37.62 39.59

Queensland . . . . . . 38.31 40.17 39.77

South Australia . . . . . 39.06 41.03 42.43

Western Australia . . . . . 42.11 39.19 42.07

Tasmania . . . . . . 47.75 48.78 50.49

Six States . . . . . . 36.68 37.82 39.05

2.27 In Tasmania, the per capita burden of unrecovered debt charges is much higher than in the other States. The loan expenditure items primarily responsible for the unrecovered debt charges in Tasmania are non-revenue- producing works, such as public buildings and roads and bridges, together with rail­ ways. The non-recovery of debt charges in Queensland results mainly from loan

expenditures on public buildings, railways, country water supply, forestry operations and subsidies to local bodies. In South Australia, the principal fields of loan expenditures responsible for unrecovered debt charges are public buildings, rail­ ways and country water supply.

2.28 The Commission has always been concerned with the effect on the amount of the special grant of the level of unrecovered debt charges in a claimant State’s budget (see paragraphs 4.166 to 4.169).

2.29 Secondary industry is now an important element in the economy of every State. However, in all States there has also been a great expansion of primary production over the period since World War II. The increase in areas sown to pasture has been remarkable and the cropped areas have increased considerably.

Improved agricultural techniques, the introduction of modern mechanical methods of land clearing, together with intensive and extensive research by all governments, have also contributed to this post-war expansion. In recent years the discovery of resources of nickel, iron ore, bauxite, natural gas, oil, coal and other minerals

has paved the way for a widespread expansion of mineral production.

2.30 While it is obvious that substantial economic growth has occurred in all States in recent years, this development has placed additional burdens on State budgets to support the growth in the size and complexity of State economies

17

and to meet the increased demand for education and health services associated with rising population and improving living standards. These extra costs are reflected in the expenditure on State social services and the growing burden of State debt charges. The Australian Government has recognised the burden on State budgets arising from debt charges and arrangements were made at the June

1970 Premiers’ Conference for the Australian Government to take over some of this responsibility. Details of these arrangements were given in paragraph 2.41 of the 37th Report.

Loan Council Borrowing Programs

2.31 For 1974-75 the Loan Council approved a State works program of $1,087.4m, consisting of a basic program of $1,077.5m and a temporary borrowing allocation of $9.9m for Queensland for the restoration of flood-damaged assets. The amount of $1,087.4m was an increase of $220.4m compared with 1973-74. Included in the amount approved in 1974-75 were interest-free capital grants of $345.9m, an increase of $67.6m over 1973-74. Interest-free capital grants were first paid in 1970-71 and are designed to assist the States to finance works of a non­ revenue-producing nature. The grants are distributed between the States in the same proportions as the basic borrowing programs.

2.32 For 1971-72 and 1972-73, the Australian Government changed its method of providing assistance to the States for housing. Under successive Commonwealth- State Housing Agreements which operated up to 30 June 1971, such amounts of its total borrowing program as were nominated by each State for housing were advanced by the Australian Government at concessional rates of interest. Under the new arrangements the States continued to determine the amount of their annual borrowing programs to be allocated to housing, but in lieu of the interest concession the Australian Government provided direct grants to help the States continue to provide housing for lower income groups. For 1973-74, housing finance arrangements were again revised, the Australian Government providing advances for welfare housing outside the Loan Council arrangements. These arrangements again applied to welfare housing in 1974-75.

2.33 For 1974-75, the Loan Council also approved borrowing of $686.lm (an increase of $121.lm over the total actual borrowing program of 1973-74) by the larger State semi-government and local authorities, defined as having borrowing programs of over $500,000 in a financial year. This included special allocations amounting to $35.6m, of which $10m was a permanent addition to the program of New South Wales and $ 19.6m and $6m were special temporary allocations to Queensland and Western Australia respectively.

2.34 The total and per capita borrowing programs for loan expenditure in 1974-75 for State works and for the larger State semi-government and local authorities, as allocated among the States, are shown in Table 2-4.

2.35 In June 1975, the Loan Council approved a total State works program of $l,291m for 1975-76, an increase of $203.6m compared with 1974-75. The allocations for South Australia and Tasmania were both $6m lower than they would otherwise have been; this was to take account of savings to the States’ capital works programs as a result of the transfer to the Australian Government of the non-metropolitan railway system in South Australia and the railway system in Tasmania. The total program of $l,291m comprises interest-free capital grants of $430.3m (compared with $345.9m in 1974-75) and total borrowings of $860.7m

18

Table 2-4 — BORROWING PROGRAMS FOR STATE WORKS AND FOR LARGER SEMI-GOVERNMENTAL AND LOCAL AUTHORITIES, 1974-75

Total for State Works Larger Sem i-G overnm etital and Local A uthorities

New South Wales ($’000) . . . 334,309 244,767

Per capita ($) . . . . 69.68 51.02

Victoria ($’000) . . . . 272,179 213,907

Per capita ($) . . . . 74.11 58.25

Queensland ($’000) . . . . 153,567 138,495

Per capita ($) . . . . 76.87 69.33

South A ustralia ($’000) . . . 146,188 31,768

Per capita ($) . . . . 117.97 25.64

W estern A ustralia ($’000) . . . 100,247 37,887

Per capita ($) . . . . 89.82 33.95

Tasm ania ($’000) . . . . 80,929 19,256

Per capita ($) . . . . 199.82 47.55

Total ($’000) . . . . 1,087,419 686,080

Per capita ($) . . . . 82.20 51.87

Note: In addition to the above, the A ustralian G overnm ent provided advances fo r welfare housing outside the Loan Council arrangements.

(compared with $741.5m in 1974-75). For 1975-76, the Loan Council also approved a total borrowing program of $809.7m for larger State semi-government and local government authorities ($123.6m more than the 1974-75 program). The total program of $809.7m comprises a basic program of $792.6m and permanent

additions of $10m and $7.1m for New South Wales and Queensland respectively. The addition for New South Wales was made in recognition of the State’s relatively low per capita share of Loan Council programs. The addition for Queensland was made under arrangements reached at the June 1968 Loan Council meeting

in respect of the termination of the issue of variable interest stock by the State’s Southern Electric Authority. The policy of not placing any overall limit on borrowing programs by smaller State authorities (from 1975-76 those borrowing not more than $700,000 in a financial year) has been continued for 1975-76.

(Further details of the Loan Council borrowing programs are given in the Australian Government budget document Payments to or for the States and Local Government Authorities 1975-76.)

Australian Government Payments to States for Specific Capital Purposes

2.36 The Australian Government provides assistance outside the Loan Council context by way of grants and loans for specific State capital purposes. The assistance covers a wide range of State activities. In recent years assistance has been extended to many additional fields and payments for some others greatly

increased. The new payments have included those for growth centres, area improvement, community health, the national estate, pre-schools and child care. From 1 January 1974 the Australian Government assumed full responsibility for funding universities and colleges of advanced education. In addition, in 1973-74 greatly increased grants were paid to the States for school buildings and other

items of educational equipment following the recommendations of the Interim Committee for the Australian Schools Commission. Capital assistance for tech­ nical education and aboriginal advancement also substantially increased in 1973-74.

19

Australian Government Payments to States for Revenue Purposes

2.37 In recent years payments by the Australian Government to the States for revenue purposes have been classified in two broad categories, namely, general revenue grants and specific purpose grants. The former have included the financial assistance grants, the special grants recommended by the Grants Commission, and

special revenue assistance provided from time to time in recognition of special budgetary difficulties experienced by one or more of the States. Specific purpose grants have included the revenue payments by the Australian Government for debt charges on the public debt of the States as provided for under the Financial

Agreement of 1927, debt charges assistance as described in paragraph 2.42 and grants for specific purposes such as public hospitals and welfare benefits, univer­ sities, colleges of advanced education and research grants, schools and technical education, natural disaster payments and unemployment relief. Details of these two

categories of payments to the States in 1973-74 are shown in Tables 2-5 and 2-6 as total and per capita figures respectively.

2.38 As with the payments for specific capital purposes, the number and size of specific purpose payments of a revenue nature have increased greatly in recent years. The largest increases have occurred in the fields of education and assistance for State debts. The figures in Tables 2-5 and 2-6 reflect the substantial increases in grants for universities and colleges of advanced education which resulted from the new financial arrangements referred to in paragraph 2.51.

2.39 While Table 2-5 shows the greater total amounts paid to New South Wales and Victoria, the per capita figures in Table 2-6 indicate the larger relative amounts paid to the other States, all of which have greater budgetary needs arising from the inequalities described earlier in this chapter. However, because it is not possible to identify particular sources of funds from which the payments to the

States are financed, the degree of redistribution of financial resources which is achieved by this process cannot be ascertained with precision.

Recent Changes in Revenue Assistance

2.40 During recent years, there have been frequent changes in the financial arrangements between the Australian Government and the States affecting the amounts and the composition of financial assistance grants and special grants, and arrangements regarding State debts.

2.41 At the Premiers’ Conference in June 1968, agreement was reached between the Australian Government and Western Australia that that State would cease to be a claimant as from 1968-69. As a result of this agreement: (a) the Australian Government was to pay Western Australia the sum of

$15.5m in each of the years 1968-69 and 1969-70 in addition to that State’s financial assistance grant; this was to replace any special grant that might have been recommended by the Grants Commission

for those years; (b) the sum of Western Australia’s financial assistance grant and $15.5m became the base of consideration for purposes of the 1970 review of the financial assistance arrangements; and (c) the completion grant normally recommended by the Commission for

1966-67 was to be paid in 1968-69 but the advance grant of $15.5m paid in 1967-68 was to be regarded as the final grant for that year.

20

Following the above arrangements Tasmania was the only claimant State until South Australia made application on 6 July 1970 for a special grant for the year 1970-71 (see paragraph 1.4 of the 37th Report). Subsequently on 30 September 1971 Queensland applied for a special grant for the year 1971-72 (see paragraph 1 of Special Report, 1972). As indicated in paragraphs 2.53 and 2.59, Tasmania

withdrew its applications for special grants with effect from 1 July 1974, but has subsequently applied for special grants for 1974-75 and 1975-76. South Australia ceased to be a claimant State from 1 July 1975 (see paragraph 2.55).

2.42 At the Premiers’ Conference in June 1970 new revenue assistance arrangements between the Australian Government and the States were adopted to apply from 1970-71 to 1974-75. These arrangements provided for a consider­ ably faster rate of growth in the total of Australian Government revenue assistance

to the States than would have occurred under a continuation of the previous arrangements, and they also involved changes in the distribution of revenue assistance between the States. The main features of the June 1970 arrangements are set out in the following summary.

(a) Financial Assistance Grants. The formula grants paid to each State in 1970-71 were determined by applying the formula under the previous arrange­ ments to the formula grants paid to each State in 1969-70 (i.e. excluding the special assistance approved in February 1970 and subsequent adjustments), with the addition in the case of Queensland of $2m to the 1969-70 base. In addition, an amount of $40m was distributed between the States in the same proportions as their

1970-71 formula grants and was incorporated in the base to determine the grants for 1971-72 and subsequent years. The ‘betterment’ factor to be applied in the formula to determine the annual grant for each State for 1971-72 and subsequent years was increased from its previous level of 1.2 per cent to 1.8 per cent.

The addition of $2m to the 1969-70 base used to determine Queensland’s 1970-71 formula grant was to be repeated for the purpose of determining the State’s formula grant for each of the four succeeding years—that is, the previous arrangement for Queensland was to be continued.

The Australian Government agreed to make payments to New South Wales and Victoria of $2 per capita in each of the five years but these payments were not included in the base for the purpose of determining the formula grants. An amount of $12.5m was paid to Western Australia in 1970-71 in lieu of a

special grant, this amount to be reduced to $9.5m in 1971-72 and by a further $3m in each of the next three years. These amounts were not included in the base for determining the annual formula grants.

(b) Take-over of Existing State Debt. The Australian Government also agreed to make grants under section 96 of the Constitution to meet debt charges on an additional $200m of existing State debt in each of the five years of the arrange­ ments, so that as from the commencement of 1974-75 it would have taken over

full responsibility for the debt charges on $ 1,000m of existing State debt. The grants were to be calculated to meet interest and sinking fund charges on the ‘parcel’ of debt agreed by a committee of officers appointed to examine possible procedures for the take-over. This parcel carried an average interest rate of 5.5 per

cent and a State sinking fund contribution of 0.25 per cent. The take-over of responsibility for debt charges was on the basis that, as from the commencement of each year, $200m of debt was to be notionally taken over by the Australian Government. Special arrangements were to apply from 1973 onwards, when some of the securities in the parcel were due to mature, as recommended by the

committee.

21

Table 2-5 — AUSTRALIAN GOVERNMENT REVENUE PAYMENTS TO THE STATES, 1973-74

Item

General revenue payments— Financial assistance gr ant s. . . .

Special g r a n t s ...................................................

Special revenue assistance . . . .

Total general revenue payments . .

Specific purpose payments— Financial Agreement— Interest . . . . . .

Sinking f u n d .........................................

Total Financial Agreement . . .

Debt charges assistance . . . .

Public hospitals and welfare benefits . Universities, colleges of advanced education search grants . . . . .

Schools and technical education . .

N atural disaster payments . . .

Unemployment relief— M etropolitan . . . . .

Non-metropolitan . . . .

All other . . . . . .

Total specific purpose payments . .

G rand total . . . . .

(а) Includes $ 6 .5m paid in lieu of special grant and special temporary addition of $3.5m. (б) Total special grant paid in 1973-74, i.e. advance grant of $15m plus completion grant of $4.9m for year of review 1971-72. (c) Total special grant paid in 1973-74, i.e. advance grant of $10m less negative completion grant of $1,35m for year of review 1971-72. Source: Payments to or for the States and Local Government Authorities 1974-75, Budget Paper No. 7, Australian Government Publishing Service, Canberra 1974.

The distribution between the States of the debt notionally taken over (and hence the distribution of the grants to meet the debt charges) was to be in proportion to total outstanding debt under the Financial Agreement as at 30 June 1970. The arrangements for the formal transfer of the debt from the States to the Australian Government as at June 1975 were to be settled later.

(c) Interest-free Capital Grant. The revenue budgets of the States were also to be assisted by annual capital grants intended to finance part of their Loan Council programs on an interest-free basis. The grants were to be non-specific but were to be regarded as a contribution towards non-revenue-producing capital works expen­ diture. The States received grants totalling $200m in 1970-71 distributed between

them in the same proportions as their borrowing programs. This represented 24.3 per cent of the total works and housing program in that year. The proportion increased to 24.6 per cent in 1971-72 due to a permanent addition of $2m to the grants in recognition of the costs faced by the States in the changeover to the metric system. In 1972-73 the grants increased further to 25.3 per cent as a result of arrangements associated with the provision of capital grants for expenditure

on government schools, and would have risen to 26.7 per cent in 1973-74 with the payment of a further grant for government schools. The proportion of the States’ Loan Council programs represented by the capital grants was affected further by the arrangements concerning housing agreed at the June 1973 meeting

(see paragraph 2.32), and the grants were fixed at $278.3m or 32.1 per cent of the approved programs for 1973-74. The corresponding grant for 1974-75 was $296.9m.

(d) Other Revenue Arrangements. The arrangements agreed upon in 1970 were conditional on there being no significant changes in the existing division of financial responsibilities between the Australian Government and the States during the period of the arrangements, on the distribution of tax resources remaining un­ changed and on the States and their authorities continuing to pay pay-roll tax. In offering payments to New South Wales and Victoria in each of the five years of $2 per capita over and above the formula grants, the then Prime Minister stated that, in the event that any of the four less populous States considered that the

additional per capita grants would adversely affect their ability to provide services of a comparable standard to those in New South Wales and Victoria, it would be open for them to make an application to the Grants Commission for a grant in addition to their share in the financial assistance grants. As indicated in paragraph 2.41, the Queensland and South Australian Governments subsequently made applications for special grants in addition to their shares of the financial assistance grants. South Australia has since withdrawn from claimancy (see para­ graph 2.55).

2.43 Following the June 1970 Premiers’ Conference, an advance of $10m was made to Victoria to help the State finance its revenue deficit for 1969-70. With the agreement of the Premier of Tasmania an amount of $10m was added to Tasmania’s financial assistance grant for 1970-71 and subtracted from the advance special grant of $22m that would otherwise have been payable to Tasmania in that year. The $10m was added to the base for the purpose of calculating Tasmania’s financial assistance grants for 1971-72 and subsequent years.

2.44 Following the High Court decisions late in 1969 and early in 1970 invalidating State receipts duty applying to certain types of receipts, the Prime Minister at a Premiers’ Conference in February 1970 undertook to introduce legislation, to operate retrospectively to 18 November 1969, imposing for the

24

benefit of the States a duty on business receipts. The legislation was introduced towards the end of 1969-70 but was rejected by the Senate. However, legislation was passed in November 1970 imposing a duty on business receipts for the period 18 November 1969 to 30 September 1970. It had been agreed at a Premiers’

Conference on 8 October 1970 that receipts duty would not be imposed by the States after 30 September 1970 and that the whole of the resultant loss of revenue to the States in 1970-71 would be made up by additional grants by the Australian Government. It was further agreed that Queensland would receive an additional grant to allow for the fact that in the first quarter of 1970-71 the Queensland rate

of duty was only 0.02 per cent compared with 0.1 per cent in all other States. The Australian Government also agreed that, for 1971-72 and subsequent years, the amounts of receipts duty, which it was estimated would have been collected by the States in 1970-71 had it been a ‘normal’ year, would be added to the base

used in determining the financial assistance grants payable under the grants formula.

2.45 At the Premiers’ Conference in June 1971 the Australian Government and the States agreed that, from a date to be proclaimed in 1971-72, pay-roll tax would be transferred to the States. The general basis of the transfer was that, subject to certain qualifications mentioned below, the financial assistance grants

payable to the States would be reduced by the amount of pay-roll tax forgone by the Australian Government. For 1971-72 it was agreed that the deductions from the States’ financial assistance grants would be less than the amount of pay­ roll tax revenue receivable by them (at the existing 2.5 per cent rate) during

the remainder of 1971-72 by:

(a) An amount of $20m to be distributed between the States in pro­ portion to pay-roll tax collections in 1971-72 at the rate of 2.5 per cent and a further amount, estimated at the time of the Conference at $2.7m, to be distributed between the four less populous States to

bring their allocations to what they would have been if the amount of $20m had been distributed in proportion to the financial assistance grants.

(b) An amount equal to the estimated pay-roll tax on non-business activities of local authorities in 1971-72 subsequent to the date of transfer of the tax (these activities were now to be exempted from liability for pay-roll tax).

(c) An amount equal to the administrative expenditure incurred by the States in 1971-72 as a result of their imposing pay-roll tax.

2.46 For 1972-73 and subsequent years it was agreed that the deductions from the States’ grants on account of the transfer of pay-roll tax would be effected by reducing the 1971-72 base used to determine the formula grants for those years. The deductions from the 1971-72 base would, however, be less than the amount

of pay-roll tax receivable in 1971-72 from a full year’s collections at the rate of 2.5 per cent by:

(a) The amount, estimated at the time of the June 1971 Premiers’ Con­ ference at $22.7m, which the States would gain in 1971-72, thereby ensuring that this amount would continue and increase in future years.

( b) An amount equal to the estimated tax payable on non-business activities of local authorities during the whole of 1971-72. In this way the Australian Government would in effect continue to meet the cost

25

of exempting those activities from pay-roll tax by making higher financial assistance grants to State governments. (c) An amount of $3m, being an approximate allowance for the prob­ ability that revenues from pay-roll tax at constant rates would grow

a little more slowly than the financial assistance grants. (cl) An amount equal to the administrative expenditure that would have been incurred by the States in 1971-72 if they had imposed pay-roll tax for the whole of the year.

2.47 After the June 1971 Conference it was announced that the States had agreed to increase the rate of tax from 2.5 per cent to 3.5 per cent as from 1 September 1971. At the June 1973 Premiers’ Conference it was announced that the States would further increase the rate of pay-roll tax to 4.5 per cent, effective from 1 September 1973. At the June 1974 Premiers’ Conference it was announced that the rate of pay-roll tax would be increased to 5 per cent, effective from

1 September 1974.

2.48 At the Premiers’ Conference in June 1971 the Australian Govern­ ment agreed to provide special revenue assistance in 1971-72, in the form of a non-recurring grant of $40m, to be distributed between the States in proportion to their financial assistance grants. Subsequently at the February 1972 Conference the Australian Government agreed to provide further special revenue assistance of $32.5m in 1971-72. Of this amount $15m was provided by way of non­ recurring grants distributed between the States in proportion to their financial assistance grants and the remaining $17.5m was a special repayable advance to New South Wales in recognition of that State’s special budgetary problems in

that year.

2.49 At the June 1972 Premiers’ Conference the Australian Government and the States agreed to the following three amendments to the financial assistance grants arrangements: (a) A permanent increase of $112m to the financial assistance grants

payable in 1972-73, this increase to be incorporated into the formula grants for the purpose of calculating the grants for subsequent years and to be distributed in proportion to the 1971-72 formula grants

escalated under the formula applicable for 1972-73. (b) An increase in the per capita grants to New South Wales and Victoria from $2 to $3.50 per head of population in 1972-73, the increased per capita payments to be added to the formula grants for the purpose

of calculating the grants in future years (this change increased the grants payable to New South Wales and Victoria in 1972-73 by $7m and $5.4m respectively). (c) A payment of a further amount of $3.5m to Western Australia as a

special temporary addition to the State’s financial assistance grant in that year.

2.50 On 20 September 1972 the Australian Government announced that, having regard to the difficult budget situation which was confronting New South Wales, it was prepared to provide special budgetary assistance to the State in 1972-73 in the form of a special repayable advance of $15m.

2.51 At the Premiers’ Conference in June 1973 the Australian Govern­ ment and the States agreed to further changes in the financial assistance arrangements:

26

(a) The States accepted the Australian Government’s offer to take full financial responsibility for financing tertiary education from 1 January 1974, and agreed that the estimated recurrent expenditure ($111.8m in 1973-74) should be deducted from the financial assistance grants

payable in 1973-74. (b) The additional grant payable to Western Australia each year since 1970-71 on a diminishing basis should remain at $6.5m in 1973-74 instead of being reduced to $3.5m as provided in the existing legis­

lation. The special temporary addition to the State’s borrowing pro­ gram for larger authorities was reduced from $9m to $6m. (c) Special revenue assistance of $25m should be paid to the States in 1973-74.

Subsequent to the Premiers’ Conference it was agreed that Western Australia should receive a special temporary addition of $3.5m to the State’s revenue grants in 1973-74, and that the additional financial assistance grant payable to the State in 1974-75 should remain at $6.5m.

2.52 At the Premiers’ Conference in June 1974 the Australian Government and the States agreed that, following acceptance of the Australian Government’s offer to assume responsibility for financing tertiary education from 1 January 1974, the estimated recurrent expenditure of $229.7m in 1974-75 should be deducted

from the financial assistance grants payable in 1974-75.

2.53 As a result of discussions requested by the Premier of Tasmania at the Premiers’ Conference in June 1974, the Australian Government agreed to increase the financial assistance grant payable to Tasmania in 1974-75 by $15m. The additional assistance was to be incorporated into the base grant for purposes of

the formula under the States Grants Act. As a consequence of these arrangements, Tasmania withdrew its applications for special assistance under the Grants Com­ mission’s procedures as from the beginning of 1974-75 and did not receive com­ pletion grants for 1972-73 and 1973-74.

2.54 At the Premiers’ Conference in February 1975, the Australian Govern­ ment and the States agreed that additional general revenue assistance of $60m would be distributed to the States in proportion to the financial assistance grants.

2.55 As from 1 July 1975, under the arrangements agreed upon by the Australian and South Australian Governments whereby the Australian Government assumed control of the State’s non-metropolitan railway system, South Australia ceased to be a claimant State. The main provisions of that part of the arrange­

ments concerning the payment of special grants to South Australia were that there would be paid to South Australia as special grants: (a) an amount of $6.434m, representing unused credits assessed by the Commission in respect of past years (see 41st Report (1974) paragraph

1.17);

(b) a completion grant assessed by the Commission in respect of 1973-74, since determined at $2.5m (see paragraph 1.21); and (c) without review by the Commission, an amount of $10m as the estimated completion grant in respect of 1974-75.

The amounts referred to in (a) and (c) were paid to South Australia in 1974-75. The amount referred to in (b) is the completion grant recommended in this Report for payment to South Australia in 1975-76 (see paragraph 1.21). The agreement

27

also stated that the Grants Commission legislation would be continued by the Australian Government in such a way as would not preclude South Australia from resuming claimancy if, in the opinion of the State Government, its financial position relative to other States justified an application for a special grant.

2.56 The arrangements for transfer of the South Australian non-metropolitan railway system to the Australian Government and the withdrawal of South Australia from claimancy provided for changes in the base to be used to calculate the State’s financial assistance grants. For purposes of the review of the financial assistance grants arrangements, the 1974-75 base was amended as follows:

(a) an amount of $25m, representing the full amount of the special grant estimated to be payable to the State for 1974-75, was added to the base; (b) an amount of $25m, being an amount in consideration for land, minerals

and other assets, was added to the base; and (c) an amount of $32m, being the estimated non-metropolitan railways deficit for 1974-75, was subtracted from the base.

It was further agreed that, as a first contribution in consideration for land, minerals and other assets, there would be a payment of $10m to the State in 1974-75 for the purpose of providing budgetary assistance. The amount would be repayable if the transfer did not proceed.

2.57 In April 1975 the Tasmanian and the Australian Governments agreed upon arrangements for the transfer of the Tasmanian Government railway system to the Australian Government to take effect from 1 July 1975. Under the terms of the agreement, for the purpose of the review of the financial assistance grants

arrangements the 1974-75 ‘base’ financial assistance grant for Tasmania was to be:

(a) the financial assistance grant as calculated for 1974-75 in the absence of the transfer arrangements;

(b) plus an amount of $3.3m being an amount in consideration for land, minerals and other assets;

(c) less an amount of $14.5m representing the railways deficit in 1974-75.

The amount referred to in (c) will be adjusted to take account of any differences between the interest and sinking fund contributions actually charged to the railways and the interest and sinking fund charges payable on the debt transferred by the State to the Australian Government.

2.58 At the Premiers’ Conference in June 1975, new general revenue grants arrangements between the Australian and State Governments were announced. The main features of the arrangements are listed in the following summary:

(a) A total of $220m will be paid to the States in 1975-76 in addition to the financial assistance grants otherwise payable in that year. This additional payment will be distributed in the same proportions as the grants otherwise payable. It will also be incorporated into the base on which the grants will be calculated under the formula in 1976-77 and subsequent years.

(b) An amount of $5m will be added to the base grants on which Western Australia’s financial assistance grants will be determined for 1975-76 and subsequent years.

28

(c) In the formula to determine the annual grant to each State for 1976-77 and subsequent years, the betterment factor will be increased from 1.8 per cent to 3.0 per cent. (d) Subsequent requests for supplementary general revenue assistance by

the States will not be entertained by the Australian Government except in the most abnormal and exceptional circumstances, with which the States are clearly unable to cope unaided. (e) The Australian Government will review these arrangements before the

end of 1979-80. Following past practice, the arrangements will be subject to revision before that date in the event of substantial and relevant changes in Australian-State financial relationships, or in major factors relevant to those relationships. The arrangements are subject to

the States continuing to refrain from levying taxes on income. (/) The financial assistance grants will be subject to ‘offsets’ (reductions) in respect of the Australian Government’s proposed assumption of increased responsibilities in the fields of Aboriginal affairs and assist­

ance to deserted wives.

2.59 On 18 June 1975 the Premier of Tasmania wrote to the Prime Minister formally seeking special grants for Tasmania under the Grants Commission Act for the years 1974-75 and 1975-76. These applications have been referred to the Commission for inquiry and report.

2.60 The preliminary estimates of the financial assistance grants for 1975-76, compared with the payments made in 1974-75 and 1973-74, are shown in Table 2-7.

Table 2-7 — FINANCIAL ASSISTANCE GRANTS

State 1973-74 1974-75

Increase 1974-75 over 1973-74 1975-76 Increase 1975-76 over 1974-75

Amount Per­

centage

Estimates O) Amount Per­

centage

$’000 $’000 $’000 Per cent $’000 $'000 Per cent

New South Wales . 585,507 737,522 152,015 26.0 987,800 250,278 33.9

Victoria . . . 437,604 548,405 110,801 25.3 738,500 190,095 34.7

Queensland . . 318,245 414,446 96,201 30.2 562,300 147,854 35.7

South A ustralia® . 204,918 261,737 56,819 27.7 377,800 116,063 44.3

Western A ustralia® . 222,388 279,830 57,442 25.8 378,500 98,670 35.3

Tasm ania® ) . . 91,243 131,871 40,628 44.5 162,800 30,929 23.5

(a) Subject to offsets in respect of transfer to the A ustralian G overnm ent of responsibility relating to assistance for deserted wives and possibly A boriginal affairs. (b) For 1974-75 includes $10m in respect of transfer to the A ustralian G overnm ent of responsibility for non-m etropolitan railways and $16.434m paid as a special grant

w ithout recom m endation from the G rants Commission; for 1975-76 includes $20m in respect of the railways transfer. (c) F o r 1973-74 includes $6.5m in lieu of a special grant, plus special tem porary addition of $3.5m; for 1974-75 includes $6.5m in lieu of a special grant; for 1975-76 includes an

addition to the base grant of $5m. (d) For 1974-75 includes $5m in respect of transfer to the A ustralian G overnm ent of responsibility for railways and $15m in lieu of a" special grant, the latter am ount being incorporated in the base grant for purposes of determ ining the grants in subsequent

years; for 1975-76 reflects a negative adjustm ent of $10.7m related to the transfer of railways. Source: Inform ation provided in A ustralian Treasury submission at C anberra Hearings in July 1975.

29

Special Grants and Other General Revenue Payments

2.61 Table 2-8 shows total Australian Government general revenue payments to the States over the period 1970-71 to 1974-75 and estimates of the amounts available for 1975-76. In this table the special grants to Queensland and South Australia for 1974-75 and to Queensland for 1975-76 include only the advance grants. The figures for 1971-72 reflect the changes associated with the transfer of pay-roll tax to the States (see paragraphs 2.45 and 2.46).

2.62 Changes in the relationship between the special grants and other general revenue payments shown in Table 2-8 result from many factors, and there is no reason to expect any particular relationship to be maintained from one year to the next. Among the factors which may be involved are the following:

(a) Insofar as changes in the amounts of payments are related to popula­ tion growth, as in the financial assistance grants formula, the total payment will tend to grow more slowly in a State with a lower rate of population growth (though of itself this does not affect the relation­

ship between financial assistance grant and special grant in the claimant State).

(b) From time to time the Australian Government has provided general revenue assistance to the States additional to that payable under the financial assistance grants formula or by way of special grants recom­ mended by the Commission. Some of the additional assistance has been distributed among the States in the same proportions as the financial assistance grants paid in accordance with the formula; for example, additional revenue assistance was distributed on this basis in 1973-74 and 1974-75 in recognition of the States’ budgetary prospects for those years. Such amounts may cause the rate of growth of the special grant to differ from that of the other general revenue payments, as explained in sub-paragraph (h) below. Other amounts of

additional assistance have been distributed by reference to the par­ ticular needs of some States, and may thus have affected the relation­ ship between the special grant and the other general revenue payments. From 1965-66 to 1974-75, for example, there was an addition of $2m each year to the base on which Queensland’s financial assistance grant was calculated, mainly in recognition of the State’s large area and relatively small population. The relationship between each claimant State’s share of the financial assistance grants and its special grant was also affected by the payment as from 1970-71 of additional annual grants to New South Wales and Victoria of $2 per head of their respective populations. Further changes resulted from the increase in these per capita grants to $3.50 in 1972-73 (see paragraph 2.49). The relationship for

Tasmania was affected by the decision to transfer an amount of $10m from the special grant that would otherwise have been payable to Tasmania in 1970-71 and include it to form part of the base for purposes of calculating Tasmania’s share of the financial assistance grants for 1971-72 and subsequent years. Other items which have affected the relationship for all the claimant States in recent years include: from 1970-71 the payment of debt charges assistance by the Australian Government on State debt of $ 1,000m taken over by that Government at 30 June 1975; the transfer of pay-roll tax from the Australian Government to the States in 1971-72; and the total funding.

30

Table 2-8 A U S T R A L I A N G O V E R N M E N T G E N E R A L R E V E N U E P A Y M E N T S T O T H E S T A T E S , 1970-71 T O I T / > 7 'J

Stale

New South Wales

V ictoria. .

Queensland— (a) . .

( A ) ■ ■

(c) ■ ■

South Australia— (a) ■ ■

( A ) . ■

(c) . ·

Western Australia

Tasmania— (a) . ·

( A ) . .

(c) . .

1970-71

$’000

484,975 (d) (e) 361,584 (d) (e)

223.275 (d)

223.275

156,252 (d) 12,500

168,752 168,343 (d) (A)

67,088 (« 0 ( 0

9,600 76,688

1971-72

$"000

498,017 ( d ) ( e ) ( f )

362,085 (d) (e)

240.209 (d) 9,000 249.209

164,420 id) 11,900 176,320

176,974 (« 0 ( A )

71,673 («0 9,650 81,323

Increase 1971-72 over 1970-71

Per cent

2.7

0.1

7.6

11.6

5.2

- 4 . 8 4.5 5.1

6. 8

0.5 6.0

1972-73

$’000

536,963 («0 (

271,946

19,750 291,696

181.430

22,000 203.430 196,369 (A)

79.498

10,000 89.498

Increase 1972-73 over 1971-72

Per cent

7.8

9.4

13.2

119.4 17.0

10.3

84.9 15.4 11.0

10.9

3.6 10.1

1973-74

$’000

593,433 («0 443,624 (d)

322,472 id) 21,300 343,772

207,682 («0 17,500

225,182 225,243 (d) (A)

92,451 («0 10,000 102,451

Increase 1973-74 over 1972-73

Per cent

10.5

12.0

18.6

7.8 17.9

14.5

- 2 0 .5 10.7 14.7

16.3

14.5

1974-75

$’000

756,163 (d) 562,266 (d)

424.921 (d) 15.000 439.921

294.787 (d) ω 15.000 309.787

286,903 (« 0 (A )

140.204 (d) U )

140.204

Increase 1974-75 over 1973-74

Per cent

27.4

26.7

31.8

- 2 9 . 6 28.0

41.9

- 1 4 .3 37.6 27.4

51.7

36.8

1975-76 Estimated

$’000

987.800

738.500

562.300

25,000 587.300

377.800 (g)

377.800 378.500 (A)

162.800 ω 162,800

Increase 1975-76 over 1974-75

Per cent

30.6

31.3

32.3

66.7 33.5

28.2

22.0 31.9

16.1

16.1

S S p e d ^ g r M ls 're c ^ m m e n d e d 'b ^ h ^ C o ^ r n is s io n 'in ^ ^ s p e c t of each y e a r - t h a t is, the advance paym ent m ade in the year concerned and the S e v a i t completion grant finally determined two years later. F o r 1974-75 and 1975-76 the advance grant only ts included.

(c) Total of (a) and (A).

t ' l I "rlndes a d d T t l T grants" capita to New South Wales and Victoria in 1970-71 and 1971-72 and $3.50 per capita in 1972-73. The

(i,) ^ am ounts were incorporated into the base for purposes of determ ining the grants for 1973-74 and subsequent years.

(g) includes5 * $ ΙΟ η Γ ίΓ G7°4-7$5 ?and SM m V n7^ " - ^ * for transfer of railways to A ustralian G overnm ent, and for 1974-75 $ 16.434m paid as a special

(A) in 1971-72, and $6.5m in 1972-73. 1973 74 and 1974-75. Also includes special

temporary additions of $3.5m in 1972-73 and 1973-74 and an addition of $5m to the base grant ,n 1975-76. m Includes $ 10m transferred from advance special grant of $22m recommended by the Commission. . ,. ,

(/) Includes $5m for transfer of railways to Australian Government and $15m in lieu of a special grant; for 1975-76 reflects a negative adjust­ ment of $ 10.7m for the transfer of railways. .

Source: Inform ation provided in A ustralian Treasury submission at C anberra H earings m July 1975.

from 1 January 1974, by the Australian Government of universities and colleges of advanced education.

(c) In any particular year special items of expenditure, having no equiva­ lent in the standard States, may be charged to the claimant States’ budgets and included in the Commission’s assessment of financial needs. This applies to such items as the subsidising of losses on intra-State shipping services in South Australia and Tasmania, and the donation of $500,000 by the State Government to the Queensland Flood Victims Appeal Committee in 1973-74.

(d) As the amount of the financial assistance grant is determined by a formula whereas the recommended special grant is the subject of annual assessment, seasonal or other fluctuations affecting a claimant State’s budget may cause its special grant to change at a different rate from its financial assistance grant. This is of particular relevance to the operations of business undertakings and to the size of certain tax bases.

(e) Fluctuations or trends affecting the budgets of the standard States may cause the special grant to change at a different rate from other general revenue payments. This point is illustrated by the fluctuations in mining revenue in New South Wales which have been referred to in the Commission’s Reports in recent years.

(/) In fields of social services expenditure where the Commission bases its interstate comparisons on eligible population or on units of use, differ­ ing trends as between the claimant and the standard States in the ratio of eligible population or units served to population would of themselves cause the special grant to grow at a different rate from the financial assistance grant.

(g) The size of the special grant may be affected by revisions in the Commission’s methods of assessment.

(h) The general revenue payments provide a smaller proportion of budget revenue in the standard States than in the claimant States. Therefore, if the general revenue payments grow at a different rate from other budget revenue in the standard States and the overall revenue needs of a claimant State grow at the same rate as those of the standard States, the Commission’s comparative methods require that the total of general revenue payments in the claimant State grow at a different

rate from that of the standard States. The financial assistance grants formula provides for the grant per capita to grow at the same rate in all States (although, as noted in (b) above, changes are sometimes made in the base to which the formula is applied). Therefore, if the Commission judges that the overall revenue of a claimant State needs to increase at the same rate as that of the standard States, a differential rate of growth of the special grant may be necessary to achieve the required rate of growth of general revenue payments.

Budget Results of the States—1973-74 and 1974-75

2.63 Table 2-9 shows the published budget results of the States for 1973-74 together with preliminary budget results for 1974-75 and the amount of the change as between the two years.

32

Table 2-9 — STATE BUDGET RESULTS, 1973-74 and 1974-75

State 1973-74(a) 1974-75(a) Change(b)

$’000 $’000 $’000

New South W a l e s .................................................. — 16,544 — 40,058 — 23,514

Victoria(c) . . . . . . . . — 2,583 — 15,064 — 12,481

Queensland . . . . . . . — 1,509 — 8,353 — 6,844

South A u s t r a l i a ............................................................ — 3,401 + 8,384 + 11,785

W estern A ustralia . . . . . . — 5,731 — 9,133 — 3,402

Tasm ania . . . . . . . . — 3,150 — 13,543 — 10,393

(a) (+ ) Surplus; (— ) deficit. (b) ( + ) Change from deficit to surplus; (— ) increase in deficit. (c) Figures for V ictoria were derived from the revenue transactions in the Consolidated Fund.

33

CHAPTER 3

Principles and Methods 3.1 In the 1973 Autumn Sitting the Commonwealth Parliament passed the Grants Commission Act 1973. The Act was subsequently assented to on 18 June 1973 and proclaimed on 20 September 1973. This Act provides for the repeal of the Commonwealth Grants Commission Act 1933-1957 and for the establish­ ment of a new Grants Commission whose role is to inquire into and report upon applications by States and by regional organisations of local governing bodies for the grant of financial assistance. The Act was amended in the Autumn Sitting in 1975 (see page 1).

3.2 The functions of the Commission in relation to applications by States are essentially the same under the new Act as under the previous Act and are stated in section 16 of the Grants Commission A ct 1973-1975 as follows:

‘16. The Commission shall inquire into and report to the Minister upon: (a) any application made by a State for the grant, under section 96 of the Constitution, of special assistance to the State; (b) any matters, being matters relating to a grant of assistance made under

that section to a State either before or after the commencement of this Act, that are referred to the Commission by the Minister; and (c) any matters, being matters relating to the making of a grant of assistance under that section to a State, that are referred to the Commission by the

Minister.’

Section 96 of the Constitution provides that *. . . the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit’.

3.3 ‘Special assistance’ is defined in section 5 of the Act in the following manner:

‘5. References in this Act to the grant of special assistance to a State are references to the grant of financial assistance to a State for the purpose of making it possible for the State, by reasonable effort, to function at a standard not appreciably below the standards of other States.’

3.4 The Commission’s functions have been expanded by the new Act to include inquiry into applications by regional organisations of local governing bodies for financial assistance. This function is stated in section 18 of the Grants Com­ mission Act 1973-1975 as:

‘18. (1) An approved regional organization may apply in accordance with this section for the grant, under section 96 of the Constitution, of financial assistance to a State for the purposes of the organization or of all or any of the local governing bodies that the organization is representing or on behalf of which the organization is acting.

(2) An application under sub-section (1) shall be lodged with the Minister and a copy of the application shall be lodged with the appropriate Minister of the State concerned.

34

(3) The Minister may, in his discretion, after consultation with the appro­ priate Minister of the State concerned, refer to the Commission for inquiry and report: (a) an application lodged with him under sub-section (2);

(b) a matter relating to a grant of financial assistance made to a State for local government purposes; and (c) a matter relating to the making of a grant of financial assistance to a State for local government purposes. (4) Where the Minister refers an application under sub-section (1), or a matter referred to in paragraph (3) (b) or (c), to the Commission:

(a) the Commission shall afford the Treasurer, the Minister for Urban and Regional Development and the appropriate Minister of the State concerned an opportunity to make submissions to it in rela­ tion to the application or matter, and shall consider any submission

made to it by such a Minister; and (b) subject to paragraph (a), the Commission shall inquire into the application or matter in such manner as it sees fit and report to the Minister on the application or matter.’

3.5 Section 6 of the Act defines the meaning of assistance to a State for local government purposes as:

‘6. References in this Act to the grant of assistance to a State for local government purposes are references to the grant of financial assistance to a State to enable: (a) all the local governing bodies in a region to function, by reasonable

effort, at a standard not appreciably below the standards of the local governing bodies in other regions; (b) a local governing body in a region to function, by reasonable effort, at a standard not appreciably below the standards of the other local

governing bodies in that region or of the local governing bodies in other regions; or (c) an approved regional organization to function, by reasonable effort, at a standard not appreciably below the standards of other approved

regional organizations or of the local governing bodies in other regions.’

3.6 Applications by approved regional organisations of local governing bodies for the grant of financial assistance have been referred to the Commission during the year and have been the subject of separate inquiry and report (see Grants Commission Second Report 1975 on Financial Assistance for Local Government). This Report, therefore, is concerned only with applications by

States for special grants.

3.7 The first special grants for States made by the Australian Government on the recommendation of the Commission were paid to South Australia, Western Australia and Tasmania for the financial year 1934-35. Up to 1933-34 these States had, as the result of special applications to the Australian Government, received

general revenue grants over the following periods:

State Each financial year

commencing with

Western Australia Tasmania .

South Australia

1910-11 1912-13 1929-30

35

3.8 From the establishment of the Commission, Western Australia received a special grant in accordance with the Commission’s recommendation for each year up to and including 1967-68. Following discussions at the Premiers’ Confer­ ence of June 1968, Western Australia ceased to be claimant as from 1968-69, and in recognition of this certain other adjustments were made in the financial

assistance arrangements between Western Australia and the Australian Govern­ ment. Up to and including 1973-74, Tasmania received a special grant each financial year in accordance with the Commission’s recommendation. As a result of discussions requested by the then Premier of Tasmania at the Premiers’ Con­ ference of June 1974, Tasmania decided not to apply for a special grant for 1974-75, and its grant under the financial assistance grants formula was increased from the beginning of 1974-75. Flowever, in June 1975 Tasmania applied for special grants for 1974-75 and 1975-76, while indicating that it was not then seeking an advance grant for 1975-76. South Australia received a special grant for each financial year up to and including 1958-59. Under arrangements agreed at the

Premiers’ Conference in June 1959 South Australia ceased to claim special grants from the beginning of 1959-60 and its financial assistance grants were in­ creased accordingly. Following the Premiers’ Conference of June 1970, South Australia again applied for a special grant for 1970-71 and its application was

referred to the Commission for inquiry and report. South Australia continued to apply for a special grant each year until the beginning of 1975-76, when it again ceased to be claimant (see paragraph 1.4). In this Report, the Commission recommends payment of a completion grant to South Australia for 1973-74. In September 1971, for the first time an application by Queensland for a special grant was referred to the Commission for inquiry and report. Queensland has continued to apply for a special grant in each successive year, and in the present Report the Commission recommends an advance grant for Queensland for 1975-76 and a completion grant for 1973-74. Further details regarding grants paid on the Commission’s recommendation are given in Tables E-2 and E-3 (Appendix E).

3.9 During the initial period of its work, the Commission considered com­ pensation for disabilities arising from federation as a possible basis upon which its recommendations should be made. It considered also the basis of financial need. In its Third Report (1936) the Commission finally rejected the principle of compensation for disabilities arising from federation, and chose in place thereof the principle of financial need, which it expressed in the following terms:

‘Special grants are justified w hen a S tate th ro u g h fin an cial stress fro m any

cause is unable efficiently to discharge its fu n ctio n s as a m e m b e r o f th e fed eratio n

and should be d eterm in ed by the a m o u n t o f help fo u n d n ecessary to m a k e it

possible fo r th a t S tate by reaso n ab le effort to fu n c tio n at a sta n d ard n o t ap p reciab ly below th a t o f o th e r S tates.’

3.10 This principle has remained unaltered as the basis on which the Com­ mission’s recommendations have been made but, from time to time, methods of applying the principle have been adapted to changing circumstances. Changes made during the current year of review are discussed later in this chapter and

in Chapter 4.

A s s e s s m e n t o f F in a n c ia l N eed

3.11 In this Report the Commission has again used the revised method of calculation and presentation of the claimant States’ financial needs which it intro­ duced in the Forty-first Report (1974). As described in Chapter 3 of that Report,

36

under its revised procedures the Commission continues to make use of the published budgetary accounts of the States. But instead of calculating the amount of the recommended special grant by reference to a comparison of the budget results of the claimant and the standard States, modified for comparability and

(in the case of a claimant State) adjusted to eliminate the effects of any above- or below-standard levels of State services or efforts in raising revenue, under the revised method the Commission arrives at its recommendations by aggregating its assessments of need for different categories of revenue and expenditure for

each claimant State. The Commission bases its assessment for each category upon an examination of individual items within the published accounts and other relevant information, modified where necessary for purposes of comparison. The following method of assessment is used:

(a) For each category of revenue, the revenue need of a claimant State is assessed by comparing its revenue-raising capacity with that of the standard States. For this purpose the Commission, taking each of the standard States in turn, calculates the difference between (i) the

revenue which would have been obtained in the claimant State if its revenue base per head of population had been the same as that of the standard State and it had made the same revenue-raising effort as the standard State, and (ii) the revenue which would have been obtained

in the claimant State if it had applied to its own revenue base the revenue-raising effort of the standard State. The two differences so calculated (one for each standard State) are then averaged to give the measure of the claimant State’s revenue need. (In any particular field of revenue the need as measured is a negative amount if the claimant

State has an above-standard revenue-raising capacity.)

(b) For each category of expenditure, the expenditure need of a claimant State is assessed by comparing the cost per head of population of pro­ viding the service in question in the standard States with the cost of providing a comparable service in the claimant State. For this purpose

the Commission, taking each of the standard States in turn, calculates the difference between (i) the expenditure which would need to be incurred by the claimant State in providing a service of similar range and quality to that of the standard State, and (ii) the expenditure

which would have been incurred by the claimant State if it had spent the same amount per head of population as the standard State. The two differences so calculated (one for each standard State) are then averaged to give the measure of the claimant State’s expenditure

need for the service in question. (In any particular field of expendi­ ture the need as measured is a negative amount if the claimant State is able to provide the same service as the standard States at a lower

cost per capita.)

3.12 The main categories into which revenue and expenditure have been classified for this purpose are:

(a) Revenue (i) all forms of taxation; (ii) land revenue; (iii) mining royalties and revenue; (iv) other revenue.

37

(b) Expenditure

(i) social services; (ii) business undertakings; (iii) unrecouped debt charges; (iv) other expenditure.

The expenditure need in relation to any social service category is assessed after deducting from total expenditure in that category any related revenue items. These include fees charged for services, reimbursement of the cost of police traffic super­ vision and, where the Commission deems it appropriate, Australian Government payments to the States. (The treatment of Australian Government specific purpose payments to States for recurrent purposes is discussed in paragraphs 4.67 to 4.93 of Chapter 4.) Items included under ‘other revenue’ or ‘other expenditure’ in the above classification cover varied groups of receipts and expenditure including the cost of general administration. There are substantial needs within these residual groups, but for some items the needs may be negative. There remain areas of revenue and expenditure where the Commission has been unable to make precise statistical comparisons of need (see paragraphs 4.170 to 4.205). In such cases it reviews the trends in the various States in each section of the field, and where it finds no evidence to indicate differences in policy or effort between the claimant and the standard States, either in raising revenue or in controlling expenditure, it accepts any differences between the per capita budget figures of the claimant and the standard States for those items (subject to any modifications made in accord­ ance with the principles outlined in paragraph 3.23) as indicative of the claimant State’s needs. The Commission will continue its surveillance of claimant State revenues and expenditures in these areas and will not relax its efforts to find a better basis for interstate comparison.

3.13 The sum of revenue needs and expenditure needs referred to in para­ graphs 3.11 and 3.12 is met in part by way of differentials in the general revenue payments other than the special grants recommended by the Commission (see paragraph 1.17). As a result of these differentials, the claimant States receive larger amounts per capita than the standard States. The remainder of the needs for each claimant State represents the assessed amount of the special grant. As an advance grant has previously been paid to the claimant State in the year which has now become the year of review (in this Report the year 1973-74), in accord­ ance with the procedure described in paragraphs 3.15 to 3.18, the assessed com­

pletion grant for that year is the difference between the assessed amount of special grant and the advance grant previously paid. If the assessed grant is less than the advance grant previously paid, it signifies that the advance grant exceeded the State’s financial need for that year; the amount of this over-payment is offset against the advance grant recommended in the year of payment and is referred to as a negative completion grant. The amounts produced by the calculations

referred to in this paragraph are set out in Chapter 1 of this Report (paragraph 1.17).

3.14 The method of assessing the financial needs of a claimant State may be illustrated by reference to the following relationships between claimant and standard States’ revenues and expenditures:

38

Assessed grant $

Assessed revenue needs Gr

plus

Assessed expenditure needs G e

equals

Total assessed needs G n

less

Assessed needs met from other Australian Government grants Gg

equals

Assessed special grant G a

Assessed revenue needs The average of the following calculations for each standard State: Revenue of claimant State assuming standard State’s revenue base and revenue-raising effort (per capita

modified revenue of standard State multiplied by claim­ ant State’s population) R s

minus

Revenue of claimant State assuming claimant State’s revenue base and standard State’s revenue-raising effort (standard State’s revenue effort applied to claimant State’s revenue base) R c

equals

Assessed revenue needs G r

Assessed expenditure needs The average of the following calculations for each standard State: Expenditure of claimant State assuming claimant State’s cost of providing standard State’s services (cost to

claimant State of providing standard range and quality of sendees) E c

minus

Expenditure of claimant State assuming standard State’s per capita cost of providing standard services (average per capita modified expenditure of standard State multiplied by claimant State’s population) E s

equals

Assessed expenditure needs G e

More detailed comments concerning the assessment of revenue and expenditure needs are given in Chapters 4 and 5.

T w o -P art Sy s t e m

3.15 Since 1949 the total special grant recommended for payment to a claimant State has been set out in two parts. Prior to the Thirty-third Report (1966) these were known as the first and second parts. The first-part grant is now called the completion grant and the second-part the advance grant. The completion grant

is a final settlement of the advance grant paid two years earlier. This prior year is known as the year of review. The completion grant results from the Commission’s examination of the audited budget figures for claimant and standard States for the year of review. The advance grant is based on a forecast of the total financial

39

assistance which is likely to be justified for the current year in which the payment is made (i.e. the year of payment). In determining the amount of the advance grant consideration is given to the need for a forecasting margin referred to in paragraph 3.32.

3.16 An example will illustrate the operation of this ‘two-part system’ by referring to the ‘parts’ of the grants recommended in this Report. The completion grants recommended for payment to Queensland and South Australia relate to the financial year 1973-74 (the year of review). These grants are based on a review of material (such as the Auditor-General’s Report) which became available during the course of the financial year 1974-75 relating to all the revenue and expenditure in each of the States. These completion grants are in final settlement of the advance grants determined at the beginning of the financial year 1973-74, which were based upon a forecast of the budgetary experience of each State for that year.

3.17 The advance grant recommended in this Report for payment to Queens­ land is based on a forecast of the needs of that State for the present financial year 1975-76 (the year of payment). In due course, this recommendation for an advance grant will be completed by a recommendation for a completion grant when full

information for the present year is available. The recommended completion grant, if adopted, will form part of the total grant paid in 1977-78.

3.18 The two-part system has been the subject of discussion between the interested parties in recent years (see paragraphs 3.34 to 3.38 of the Forty-first Report). The matter has not been raised by the Australian Treasury or by the claimant States since the 1972-73 Hearings and the Commission continues to base its recommendations on the two-part system.

T h e E q u a l is a t io n Sta n d a rd

3.19 In each Report from the Fourth (1937) until the Twenty-seventh (1960) the Commission adopted the simple average of the experience of all three of the then non-claimant States (New South Wales, Victoria and Queensland) as the normal equalisation standard against which it measured the financial positions of the then claimant States (South Australia, Western Australia and Tasmania) in

determining the special grants recommended for payment to those States. A new system of financial arrangements between the Australian Government and the States was introduced in June 1959. The situation then was that there were four non­ claimant States and two claimant States (South Australia having become non­ claimant), and the Commission was faced with a reconsideration of the standard to be adopted for assessing special grants.

3.20 In its Twenty-eighth Report (1961), after consideration of submissions by, and evidence from, the representatives of the Australian Treasury and the claimant States, the Commission decided that it would adopt a two-State standard based on the simple average of the budgetary experience of New South Wales and Victoria. The reasons for the adoption of this two-State standard were set out fully in para­ graphs 50 to 70 of the Twenty-eighth Report and amplified, in view of the criticism by the Australian Treasury of this decision, in paragraphs 59 to 74 of the Twenty- ninth Report (1962).

3.21 In its subsequent Reports, including the present Report, the Commission has continued to use this two-State standard. Paragraphs 3.34 to 3.42 of the Fortieth Report give a summary account of the Commission’s consideration of

40

alternative equalisation standards and its reasons for continuing to use the two- State standard.

M o d if ic a t io n s

3.22 For the purpose of assessing the needs of the claimant States in the various categories of revenue and expenditure, the Commission makes a detailed comparative examination of the audited accounts of the claimant and the standard States for the latest financial year for which such accounts are available — the

year of review. Where necessary, it modifies the figures in the published budgetary accounts in order to eliminate the effects on its comparisons of any differences between the policies or practices of the claimant and the standard States.

3.23 The Commission’s modifications include the following:

(a) Removal from a State’s accounts of revenue or expenditure items which the Commission considers should be excluded from its com­ parisons. This is done, for example, (i) when the general revenue fund of a State contains an item of a

type or degree not usually found in the general revenue funds of other States, and (ii) when the general revenue fund of a State contains an item which did not arise from the activities of the year under review.

(b) Inclusion in a State’s accounts of excluded revenue or expenditure items which the Commission considers should be included in its com­ parisons. This is done, for example, (i) when the general revenue fund of a State excludes a revenue or

expenditure transaction by the State of a kind usually included in the general revenue funds of other States, and (ii) when a revenue or expenditure transaction of a State relating to activities in the year under review has been included or will be

included in the general revenue fund in a different year.

(c) Adjustments to revenue or expenditure items of a claimant State, so that its need in a particular category of revenue or expenditure can be assessed by a comparison with the corresponding items of the standard States without the comparison being affected by any differences in

policies or practices between the claimant and the standard States. (Thus the adjusted figures of the claimant State represent a notional estimate of what the revenue or expenditure of that State would have been if it had adopted the average policies and practices of the standard States.)

C o m p l e t io n G r a n t a n d A s s e s s e d N eed

3.24 Up to and including 1971-72, the amount of the recommended com­ pletion grant was subject to a limitation that it should not exceed (save in excep­ tional circumstances) the amount which would have resulted in the claimant State having a modified balanced budget result for the year of review. This normally

limited the completion grant to the amount of the claimant State’s modified budget deficit, irrespective of the budget standard which was determined by reference to the modified budget results of the standard States {see paragraph 1.6 of the Fortieth Report (1973)). However, for the year of review 1971-72 the Commission

41

considered that exceptional circumstances justified a decision not to recommend a negative completion grant for Queensland, even though the State had a modified budget surplus for the year after taking into account the advance grant it had received in that year (see paragraph 4.151 of the Fortieth Report).

3.25 Prior to 1971-72 the Commission determined the recommended com­ pletion grant for a State by reference to the limitation referred to in the previous paragraph. However, since the year of review 1967-68, if full credit had not been given for the assessed special grant in any year, the difference between the assessed

completion grant and the recommended completion grant had normally been regarded as being available for credit in any subsequent year. The amount avail­ able for credit could be offset against a deficit budget standard or a net modified surplus resulting from above-standard expenditure or below-standard revenue effort for that year, to the extent of any shortfall between what would otherwise be the completion grant for the State and the amount of grant which would produce a modified balanced budget result. The Commission did not give these credits automatically, but in reaching a decision in each case it took into account the circumstances surrounding both the original accrual of the amounts concerned and the situation in which they could be used.

3.26 The imposition of the limitation referred to in the preceding paragraphs on the Commission’s other procedures had the effect of making the recom­ mended grant reflect the amount needed to bring the fiscal capacity of the claimant State into line with that of the standard States, subject to the restriction that the grant should not enable the claimant State to achieve a modified budget surplus.

3.27 Following discussions between the interested parties in recent years (summarised in paragraphs 3.52 to 3.61 of the Forty-first Report), the Com­ mission decided, for the year of review 1972-73, to remove the condition limiting the amount of the recommended grant to the amount of the claimant State’s modified budget deficit, on the understanding that where the recommended grant brought its modified budget into surplus the additional funds so provided would be spent in the year of payment and not accumulated as cash balances (see para­ graph 3.62 of the Forty-first Report). This would allow the claimant State to use

such funds in payment for items usually met from loan funds. If it did not wish to take full credit for the assessed special grant in any year, the difference between the assessed completion grant and the recommended completion grant could be regarded as being available for credit to finance the State’s expenditure in any subsequent year. Also, amounts withheld from assessed completion grants in past years would be available for inclusion in recommended completion grants in future years on the same condition, if so requested by the claimant State concerned.

3.28 At the Brisbane Hearings in December 1974, the Queensland Treasury indicated its agreement with the Commission’s decision summarised in para­ graph 3.27.

3.29 In its submission at the Adelaide Hearings in February 1975, South Australia noted the Commission’s decision to remove the limitation on the amount of the recommended grant as explained in paragraph 3.27 above. It commented:

‘H ow ever, a fter co n sid eratio n o f the C o m m issio n ’s latest decision an d its

com m ents a b o u t the ad d itio n al fu n d s being sp en t in th e y e a r o f p ay m en t, ab o u t

cash balances n o t being accu m u lated an d a b o u t the use o f th e fu n d s in p ay m en t

fo r item s usually m et fro m lo a n fu n d s, we see th e possibility o f real p ro b lem s

in in te rp re tatio n o f the C om m ission’s u n d e rsta n d in g .’

42

It went on to express strong support for the Australian Treasury proposal, which had been put forward for many years, that all limitations on the recommended completion grant be removed.

3.30 At the Canberra Hearings in April 1975, the Australian Treasury referred to its previous submissions on this matter. While welcoming the decision of the Commission summarised in paragraph 3.27 above, it argued that the Commission should remove the remaining limitation in accordance with reasons outlined in

previous submissions. The submission concluded: ‘In a wider sense, we consider that the retention, even in part, of this rule is contrary to the spirit and intention of the new method of calculation which emphasises financial needs and disabilities rather than budget results as such.’

3.31 After consideration of the arguments submitted to it, the Commission has decided as from the year of review 1973-74 to remove the remaining limita­ tion on the amount of the completion grant referred to in paragraph 3.27. The decision as it affects Queensland and South Australia in the current year is dis­

cussed in paragraph 5.28.

A d v a n c e G r a n t

3.32 The advance grant recommended for payment is based on the Com­ mission’s forecast of the amount of special financial assistance likely to be needed for the year of payment. In making this forecast the Commission considers an estimate by the claimant State of its budget prospects for the year of payment,

together with comments thereon by the Australian Treasury. It also takes into consideration factors likely to affect the budgets of the standard States in that year. Because factors affecting the budgets of the claimant and the standard States may in the event differ appreciably from the indications on which the Commission’s

forecast of need was based, allowance is made for a forecasting margin.

G r a n t R e c o m m e n d e d fo r P a y m e n t

3.33 The grant finally recommended for payment is the advance grant deter­ mined as explained in paragraph 3.32, plus or minus the completion grant deter­ mined as explained in paragraph 3.13.

43

C H APTER 4

Claims by the States for Special Grants 4.1 Since its last Report the Commission has completed its examination of the following applications for special grants:

{a) an application by Queensland for an advance grant for the financial year 1975-76; and (b) applications by Queensland and South Australia for completion grants for the year 1973-74, in respect of which advance grants were paid

oil recommendations of the Commission in its 40th Report (1973). These claims are the subject of recommendations in Chapter 5 of this Report.

4.2 During the year the Commission has studied submissions by the govern­ ments of the claimant States and the Australian Treasury and taken evidence from their representatives at Commission Hearings in Brisbane, Adelaide and Canberra. In addition, data have been obtained from other sources such as financial and statistical statements and reports of State governments, their instrumentalities and the Australian Bureau of Statistics.

4.3 The main issues raised for discussion and examination, and the relevant paragraphs of this Report, are: (a) completion grant and assessed need (paragraphs 3.24 to 3.31); (b) State taxation (paragraphs 4.4 to 4.42);

(c) land revenues (paragraphs 4.43 to 4.59); (d) mining royalties (paragraphs 4.60 to 4.66); (e) treatment of Australian Government specific purpose payments to States for recurrent purposes (paragraphs 4.67 to 4.93); (/) expenditure on social services (paragraphs 4.94 to 4.146); (g) business undertakings (paragraphs 4.147 to 4.165); (h) debt charges (paragraphs 4.166 to 4.169); and (/) miscellaneous revenue and expenditure (paragraphs 4.170 to 4.205).

St a t e T a x a t io n

The General Approach

4.4 Differences in relative taxable capacity constitute the largest single area of interstate differences in fiscal capacity. The Commission’s general approach in this area is to take each field of State taxation and assess each claimant State’s need, as accurately as possible from the available information, as the difference between the taxable capacity of the claimant State and the standard taxable capacity. For 1973-74 the Commission has for this purpose measured the differ­ ence as an average of the results of two separate calculations, measuring the differential taxable capacity of the claimant State with respect to each of the standard States. The differential taxable capacity is measured as the difference between the per capita tax base of the standard State and that of the claimant State, multiplied by the tax effort of the standard State and the population of the

44

claimant State. The standard State’s tax effort is measured by reference to the effective rate of tax, taking into account such factors as the subject matter of the tax, the rate structure and any exemptions. Where the taxable capacity of the claimant State is below standard the Commission assesses a positive revenue need

and vice versa. Following discussions with the interested parties the Commission has decided to adopt this method of averaging, which differs slightly from that described in paragraph 5.6 of the 41st Report (1974).

4.5 For the relatively small amounts of revenue collected from licence fees, which are usually levied for special purposes or to meet the special requirements of a particular State, a claimant State’s need is assumed to be the product of its population and the average difference between its modified per capita revenue and

that of the standard States. Motor taxation is excluded from the comparisons of taxable capacity in accordance with the Commission’s general procedure of excluding any financial impact of road finance (including estimated debt charges on loan funds used to finance expenditure on roads) from its assessment of fiscal

needs.

Probate and Succession Duty

4.6 For 1972-73 the Commission assessed Queensland’s revenue needs for probate and succession duty on the basis that its taxable capacity was 72.5 per cent of standard. In making this assessment the Commission was influenced by data provided by Queensland but, because of limitations in the sample used to

compute the data, it considered that its usual method of comparison would not provide a satisfactory assessment of the State’s needs.

4.7 For 1973-74, Queensland has provided additional information, derived from a more representative sample of estates assessed for duty, in respect of variations between it and the standard States in the treatment of assets comprising the estates. The Commission has used this information to adjust the Queensland

tax base for the application of the standard States’ rates, and has assessed Queens­ land’s needs for probate and succession duty for 1973-74 by comparing per capita collections in the standard States with per capita amounts which would have been raised in Queensland on the basis of the standard rates applied to the

Queensland base.

4.8 At the Adelaide Hearings in February 1975, South Australia commented on its undertaking at the previous Adelaide Hearings to examine the possibility of providing an alternative to the method used to evaluate needs for succession duty in South Australia. It gave evidence that it had examined a sample of 925

estates assessed by the State Taxes Department in 1972-73 and had attempted to apply New South Wales and Victorian rates of duty in each individual case. It soon became apparent that the complexities of the large estates would make it impossible to place any reliance on the figures obtained in this way, so the attempt

was abandoned.

4.9 South Australia then referred to a method of comparison based on the use of Australian Government estate duty statistics, which it had first suggested in February 1971. It suggested that certain difficulties relating to provisional assessments, which had previously rendered this method of comparison unusable,

no longer applied. It estimated that the relative severity of its succession duty, using this method, was very close to the 97.5 per cent of standard used by the Commission to determine the revenue needs of the State in this area for 1972-73.

45

On the basis of advice received from the Australian Government Taxation Office, the Commission is not prepared to accept, at this stage, that the estate duty statistics provide a reasonable method of comparison in this area. However, it has accepted the calculations presented by South Australia which indicated that the relative severity of its succession duty was 97.5 per cent of standard for 1973-74 and has assessed the State’s needs on this basis.

Stamp Duty on Insurance Other than Life Insurance

4.10 In the absence of data with which to make a detailed comparison of the relative taxable capacity of Queensland in the area of stamp duty on insurance other than life insurance, the Commission assessed the State’s needs in this area as zero for both 1971-72 and 1972-73. The problem was aggravated by differences between and within States in rates applicable to and the base upon which the duty was levied in respect of various types of policies.

4.11 At the Brisbane Hearings in December 1974, Queensland submitted that the assumption of a per capita tax base for that State equivalent to that of the standard States for this form of duty overestimated its capacity in this area. It later submitted information, based on a sample of the larger insurance company returns to the Stamp Duties Office and the Insurance Commissioner, which indi­ cated that its capacity in this field of duty was below standard. The Commission has accepted this evidence and has used the data furnished by Queensland to assess a positive need for that State for this form of stamp duty for 1973-74.

Stamp Duty on Leases

4.12 For the calculation of needs relating to stamp duty on leases for 1972-73, Tasmania was the only State which provided a dissection of leases and the Com­ mission based its analysis of the claimant States’ needs on this dissection. For 1973-74, Queensland was able to provide a dissection of leases in Queensland during four weeks in 1975; this sample was expanded to a full working year and used for the 1973-74 calculations. South Australia was unable to provide a dissec­ tion for 1973-74, so the Commission assumed that the distribution of leases in South Australia was similar to that in Queensland.

Gift Duty

4.13 It was noted in the Commission’s 41st Report (1974) (paragraph 4.61) that data problems affected the calculation of Queensland’s needs in relation to gift duty for 1972-73, and that the State expected to be able to make available additional data to permit a more accurate assessment for 1973-74. Queensland has provided a value classification for 1973-74, which has been used in assessing the State’s needs for that year.

Liquor Taxation

4.14 In calculating needs for liquor taxation for 1973-74, the Commission noted that in New South Wales the liquor licence fee is based on the wholesale value of liquor sold in the calendar year preceding the date of the application for the renewal of the licence. In Victoria, Queensland and South Australia the licence fees are based on the wholesale value of liquor sold in the fiscal year preceding the date of application for the renewal. The Commission therefore

46

calculated the tax base in New South Wales as the aggregation of half the value of liquor sold in each of the calendar years 1972 and 1973.

Taxes on Gambling

4.15 There are four general forms of gambling which are subject to taxation: betting on races, lotteries, the operation of poker machines in New South Wales and the casino operations in Tasmania. For 1973-74, only the first three of these affect the assessment of needs; in each of these areas difficulties arise in comparing

taxable capacity because of the different policies adopted by the States in permit­ ting and controlling the activities which provide the base for revenue collection. In the case of poker machines any attempt to estimate the size of the revenue base in the claimant States, which do not permit this form of gambling, must be

a matter of judgment. With racing taxation a problem arises because of the late introduction of the off-course totalisator system in South Australia. With lotteries, the main problem arises from the fact that ticket sales per head of State population are much lower in South Australia than in New South Wales, Victoria and Queens­

land.

4.16 Other issues relating to taxable capacity raised during the 1974-75 Hear­ ings were concerned with the questions whether the population of South Australia had a lower propensity to engage in gambling activities than the standard States, and whether the smaller lotteries in South Australia and Queensland were capable of producing revenues comparable to those in New South Wales and Victoria. Each of these issues was discussed in the submissions of one or both claimant States and of the Australian Treasury. The Commission has therefore concerned

itself with the general question whether (having regard to differences in policy with respect to gambling activities, possible differences in the propensity to gamble and the effects of scale on gambling revenues) it is appropriate to use turnover as a measure of the revenue base in determining needs in relation to gambling taxes.

4.17 In response to the Commission’s invitation to comment on the relevance of turnover in determining needs in the general field of gambling taxes, Queens­ land made submissions on lottery revenue and poker machine tax and South Australia commented in detail on the individual gambling taxes. The arguments

advanced are summarised in the discussions on individual taxes which follow. The Australian Treasury suggested that the existence and size of the gambling tax bases depended on government policy, so that a comparison of actual gambling turnovers taken alone did not provide an adequate measure of relative capacity. It

also stated that there were practical difficulties in ‘establishing what the size of the tax base would be in the claimant States if they had the same policies as the standard States’.

4.18 In arguing for the use of actual turnover as a measure of the revenue base for gambling taxes, South Australia discussed the propensity of South Australians to gamble mainly in the context of betting on races, although it indicated that its arguments could be applied also to lotteries and poker machine

taxes. It pointed out that it had never argued that South Australians were less able to pay tax than people in the standard States, but claimed that South Australians appeared to have a different attitude to gambling from that of people in the standard States, as a consequence of which the Government in South Australia was

less able to raise revenue from that source.

47

4.19 South Australia produced evidence from the Report of the South Australian Committee of Enquiry into the Racing Industry (the Hancock Com­ mittee) to show that the percentage of regular racegoers to population in South Australia was only 62 per cent of that in the standard States, and that the per­ centage of regular bettors in South Australia was only about half of that in the

standard States. Statistics referred to by the State showed that there was a much higher proportion of South Australians who had never placed a bet. South Australia also argued that a State’s potential gambling population was likely to be related to the proportion of its population which did not profess adherence to one of the non-conformist religious denominations. Whereas only an average of 25.9 per cent of the standard States’ populations professed adherence to non-conformist denominations, the proportion for South Australia was 38.5 per cent. This sug­ gested that the State’s potential gambling population was only 83 per cent of

standard.

4.20 In its submission of April 1975, the Australian Treasury stated that it found South Australia’s argument concerning the lower propensity to gamble in that State quite convincing.

4.21 The Commission has accepted that there appears to be a lower pro­ pensity to gamble in South Australia and considers that it should allow for this in its assessment of need for all gambling taxes. It has also accepted the Australian Treasury view that actual turnover in the claimant States cannot be accepted as the measure of the revenue base. It has therefore determined notional revenue bases for all gambling taxes by reference to average per capita turnovers in the standard States, reduced in South Australia’s case by 15 per cent to allow for the lower propensity to gamble. Other factors affecting the determination of the notional revenue bases are discussed below.

4.22 Betting on Races. The Commission indicated in paragraph 4.50 of the 41st Report (1974) that it was convinced that the late introduction of off-course totalisators in South Australia had been a major factor contributing to the State’s below-standard turnover. For the purpose of assessing the State’s needs for 1972-73, it calculated notional turnovers by projecting the turnovers for gallops and trotting for four years so as to give a notional period of operation half way between the actual periods of operation of the New South Wales and Victorian Totalizator Agency Boards. To allow for price changes, the first full-year’s turnover for gallops and trotting was adjusted downwards in each case by the change in the Consumer Price Index for Adelaide between 1963-64 and 1967-68, the first full year of operation of the South Australian Totalizator Agency Board. The actual South Australian growth rates were then applied to the adjusted base for each form of racing, and the notional turnovers for 1972-73 were derived by projecting the series forward for four years at a growth rate based on broad judgment.

4.23 For off-course betting on greyhounds, a notional turnover was calculated by applying to the notional turnover on trotting, derived from the abovementioned calculations, the ratio of the standard States’ off-course greyhound turnover to their off-course trotting turnover. Notional additions to actual turnover were not made for on-course betting because of difficulties in obtaining dissections of the figures for on-course betting by the various types of racing.

4.24 South Australia again submitted that the Commission should accept actual turnover with the Totalizator Agency Board (with the exception of turnover on greyhound racing) as the base for assessing the State’s ability to raise taxation

48

from off-course betting. In addition to its arguments about the lower propensity of South Australians to gamble which are discussed above (paragraphs 4.18 to 4.21), South Australia suggested that it had a disadvantage in country areas relative to the standard States. This was because it had comparatively few large

population centres capable of conducting attractive and profitable race meetings, or of supporting viable Totalizator Agency Board agencies. It concluded, therefore, that country people in South Australia might have less incentive and fewer oppor­ tunities to place bets.

4.25 Because the Commission still considers that differential policies (such as the late introduction of off-course betting) may influence turnover, it is not prepared to accept actual turnover in the claimant States as the measure of the revenue base. It has decided to determine a notional revenue base for

betting taxes for each claimant State. This notional revenue base has been calculated by multiplying the claimant State’s population aged 19 and over by the average turnover of the standard States per head of population aged 19 and over, adjusted for differences in average weekly earnings between the claimant

State and the standard States and, in South Australia’s case, for the lower pro­ pensity to gamble. This is essentially the procedure proposed by Queensland in relation to lotteries (see paragraph 4.27).

4.26 Lotteries. In New South Wales, Queensland and South Australia, State revenue from lotteries takes the form of profits earned by State lotteries. Queens­ land also imposes a stamp duty on the sale of lottery tickets. In Victoria, lottery revenue is derived from a tax on ticket sales of the privately operated Tattersalls lottery; by arrangement the Victorian Government pays the Tasmanian Govern­

ment half of the tax it collects on Tattersalls ticket sales in Tasmania. The question of the treatment of lottery revenue has been discussed in recent Reports. In effect, the Commission has previously taken lottery turnover as a measure of the revenue base except to the extent that it appeared that a State’s turnover was

affected by policy differences.

4.27 In paragraph 4.55 of the 41st Report (1974), the Commission accepted the Queensland view that the revenue base of a claimant State should be measured in such a way that it was not influenced by its revenue effort, and it consequently accepted the Australian Treasury’s argument that the revenue base used for a

claimant State should not be influenced by the late introduction of a tax relative to its imposition in the standard States. The Commission indicated that it was con­ sidering, as a method of calculating the needs of the claimant States with respect to lotteries, an adaptation of a proposal made by Queensland. This involved the

calculation of a notional revenue for each claimant State, representing the product of the notional revenue base for that State and the ratio of revenue collected to total subscriptions in the standard States. The notional revenue base in the claimant State would be the product of (a) the State’s population over 18 years of age

and (b) the average of the standard States’ turnover per head of population over 18 years, discounted by the difference in average weekly earnings as between the claimant State and the standard States.

4.28 Because the proposed method of calculation would have substantially reduced the assessed needs of each claimant State in 1972-73 relative to 1971-72, the Commission decided to defer the implementation of the proposed method until the interested parties had had further opportunity to comment. For 1972-73 it decided to accept the revenue actually raised by each claimant State as the measure of its revenue-raising capacity.

49

4.29 In discussing the proposed method, Queensland raised a number of issues. It argued that, because a commission was usually charged by a lottery ticket seller in New South Wales and Victoria, the effective revenue base in the standard States was equal to the face value of ticket sales plus the associated service charges. Queensland considered that this effect could be overlooked if

the Commission was unable to obtain figures on service charges in the standard States, but in any case the claimant State’s notional revenue base would need to be related to the standard States’ revenue base used for purposes of the com­ parison.

4.30 Queensland also suggested that the Commission should take into account differences in population structure as between the standard and the claimant States, and allow a 50 per cent reduction in the propensity to purchase lottery tickets after retirement. Other factors which Queensland considered influenced the relative size of the lottery revenue base included economies of scale associated with the size of the prize which could be offered in the standard States, and special con­ siderations (such as publicity on a national basis) related to the Opera House lottery in New South Wales.

4.31 South Australia supported Queensland’s argument about the size of the prize. It presented evidence, based on a comparison of weekly subscriptions to ‘cross-lotto’, which showed that, as the main prize grew in size, the weekly turnover increased rapidly but dropped almost immediately to base level when the prize was won. It suggested that the interval between the purchase of a ticket and the drawing of the prize also affected turnover.

4.32 South Australia used these arguments, and the argument referred to previously that South Australians have a lower propensity to gamble, to justify its submission that actual turnover should be used as the revenue base for assessing needs in relation to lottery taxation.

4.33 The Commission has not been persuaded that the capacity of Queens­ land and South Australia to raise lottery revenue is influenced by factors other than the size of the potential gambling population and relative incomes as measured, say, by differences in average weekly earnings. It has therefore deter­ mined a notional revenue base for each claimant State on the same basis as for racing taxes. For Queensland, the notional turnover has been derived as the product of (a) Queensland’s population aged 19 and over and ( b) the standard States’ turnover per head of population aged 19 and over, adjusted for the differ­ ence in average weekly earnings as between Queensland and the standard States. For South Australia, 85 per cent of the standard turnover per head of population aged 19 and over has been adjusted for the difference in average weekly earnings as between South Australia and the standard States. Under this procedure, each claimant State’s need has been determined by averaging the results of two separate calculations, comparing the claimant State in turn with each of the standard States. Each calculation is the product of:

(a) any ‘eligible population’ differential (measured as the difference between the actual population aged 19 and over in the claimant State and the figure derived by applying to the total population of the State the proportion of the standard State’s population in the age group 19 and over), and ( b) actual revenue per head of population 19 and over in the standard

State (reduced in South Australia’s case by 15 per cent), adjusted to

50

take into account the percentage difference in average weekly earnings between the claimant and the standard State.

4.34 Poker Machines. For 1972-73, the Commission assessed the claimant States’ needs for poker machine taxation by exercising its broad judgment and taking, as the population base used for purposes of comparison, the mean of each State’s population over 19 years of age (a) excluding, and (b) including, the rural

population in that age group. At the Adelaide Hearings in February 1975 South Australia argued, on the basis of its claim that South Australians had a lower propensity to gamble, that its tax base should be assessed at 83 per cent of the standard revenue base, adjusted for differences in rural population and income.

4.35 Queensland contended that, because of its scattered population, there is a lesser potential for the establishment of viable clubs in that State, and therefore a lower revenue base. Queensland also suggested that poker machine facilities near State borders add to the New South Wales turnover and thereby inflate the

notional Queensland revenue base; the Australian Treasury expressed support for this view.

4.36 The Commission has not been able to obtain evidence about the extent to which differences in the dispersion of rural population or interstate operations affect the turnover of poker machines. For 1973-74 it has therefore assessed revenue needs for poker machine taxation in the same way as for other gambling taxes,

except that it has adopted, as the population base used for purposes of comparison, the mean of each State’s population aged 19 and over (a) excluding and (b) including the rural population in that age group.

4.37 For 1973-74 the Commission has thus calculated a notional revenue base for Queensland by reference to the standard revenue base per head of popula­ tion aged 19 and over, adjusted for differences in average weekly earnings as between Queensland and New South Wales. For South Australia, the notional

revenue base has been assessed as 85 per cent of the standard revenue base per head of population aged 19 and over, adjusted for differences in average weekly earnings. On the basis of these notional revenue bases, the claimant States’ needs have been assessed in the same way as for 1972-73.

Pay-roll Taxation

4.38 In 1973-74, the Victorian Consolidated Fund contained an item of expenditure of $4,020,000, representing payments to approved decentralised secondary industries under the Decentralized Industry Incentives (Pay-roll Tax Rebates) Act 1972 (subsequently renamed the Decentralized Industry Incentive

Payments Act 1972). The object of these payments, which were calculated as rebates of pay-roll tax, was to encourage the decentralisation of industries in the State. Rebate payments were extended to land tax in 1974-75.

4.39 At the Brisbane Hearings in December 1974, Queensland suggested that rebates under the Act should be taken into account in determining the taxable capacity and resulting revenue needs of the claimant States, rather than being considered under the heading of industrial assistance. It further suggested that ‘to the extent that a claimant State could show that a greater per capita amount

than in Victoria of its pay-roll tax or land tax receipts came from establishments which would warrant approval for rebate under the Victorian principles, a positive need would result over and above the needs determined by the comparison of the per capita tax base in the various States’.

51

4.40 In its submission at the Adelaide Hearings in February 1975, South Australia ‘agreed entirely’ with Queensland’s argument that the rebates under the Act should be taken into account in the Commission’s assessment of taxable capacity and should not be treated as ‘other expenditure’. South Australia likened the rebates for secondary industry to the land tax rebates and exemptions given to primary industry and argued the Commission should treat pay-roll tax rebates similarly.

4.41 The Australian Treasury, in its submission at the Canberra Hearings in April 1975, suggested three possible approaches to the treatment of this matter. The approach preferred by the Treasury involved assessing the claimant States’ relative revenue-raising capacities in both fields by applying the Victorian assess­ ment provisions, without reference to the rebate payments, to the revenue bases, and including the rebates as part of an expenditure item which would be subject to detailed comparison. The second approach suggested was that, if such a detailed comparison was not possible for practical reasons, the claimant States relative revenue-raising capacities should still be assessed without reference to the rebate payments, which would be excluded from the Commission’s assessment of need. The third approach mentioned by the Australian Treasury was the one preferred by Queensland and South Australia, involving the assessment of relative capacities by applying the Victorian assessment provisions, including the rebate arrangements, to the claimant States’ bases. The Australian Treasury did not favour this approach ‘because it would not take account of differing “needs” to promote decentralisation as between States’.

4.42 The Commission has given consideration to the various approaches and circulated a working paper on the matter for discussion at the April Hearings. The approach preferred by the claimant States would involve the practical difficulty of quantifying the per capita amounts of pay-roll tax, and also land tax for 1975-76 and subsequent years, which would be involved in applying the Victorian rebate arrangements to the claimant States’ bases. On the other hand, adoption of the Australian Treasury preferred approach would involve a detailed comparison of the differing needs to promote decentralisation as between the States. In view of the difficulties inherent in these approaches, and because the rebate is paid only in Victoria, the Commission has decided for 1973-74 to assess the claimant States’ needs for pay-roll tax without reference to the rebate arrangements, and to exclude the expenditure from the budgetary accounts of Victoria when assessing needs for ‘other expenditure’.

L a n d R e v e n u e

4.43 The States derive land revenues from three main sources: land taxes, rentals on Crown leasehold and proceeds from the sale of Crown land (including freeholding arrangements involving payments by instalments). Until recently, the needs of the claimant States in relation to iand taxes were the subject of separate examination. In paragraphs 4.75 to 4.78 of the 39th Report (1972), the Com­ mission discussed the need to extend its comparisons to include revenue from land rentals and the proceeds of sales of Crown land. Because comparisons of the land revenue base involved problems of a technical nature, in 1973 the Commission engaged a consultant to prepare a report on land valuation practices in the States and on the revenues derived from taxes and other charges on land and real property. The consultant’s brief was to examine and report on the coverage and rates of State and local government taxes and other charges on land and real

52

property within the six States, the bases on which these charges were levied and rebates and exemptions were allowed, and the means whereby comparisons could be made of revenue-raising efforts.

4.44 The consultant’s recommendations were taken into account in assessing the needs of the claimant States in relation to land revenues for 1972-73. For both Queensland and South Australia the Commission assessed needs in relation to land tax in accordance with its usual procedures. However, in accordance with the consultant’s recommendations, the tax bases in the several States were adjusted

to take account of differences in the dates at which valuations for land tax purposes were determined. In assessing Queensland’s needs in relation to land rentals and the proceeds of land sales, the Commission reviewed rental and land sale arrangements in Queensland and the standard States. For land rentals, the

Commission estimated Queensland’s revenue-raising capacity by reference to rents received on similar tenures in New South Wales.

4.45 With regard to land sales, the Commission treated the periodical pay­ ments on instalment purchases not subject to interest as if they were rental payments under leases for fixed terms. It assessed Queensland’s capacity in relation to such payments by reference to the return on similar tenures in New South

Wales. For other land sales, including cases where an option to convert to free­ hold had been exercised by paying 51 per cent of the purchase price immediately, Queensland’s capacity was assessed by reference to the return from land sales in both standard States, less a notional amount, determined by broad judgment, in respect of the rental revenue forgone by the State as a result of its freeholding

policies. On the basis of these comparisons, Queensland’s capacity to raise revenue was judged to be above-standard in respect of both land rentals and land sales for 1972-73. South Australia’s capacity to raise revenue from both land

rentals and sales was assessed at below standard for 1972-73.

4.46 In the 41st Report (1974), the Commission indicated that it did not accept Queensland’s argument (which was supported by the Australian Treasury but not by South Australia) that it should assess needs for land revenue by con­ sidering revenues from land tax and land rentals together, in relation to the aggre­

gate of unimproved land values. This was partly because of the problem of deter­ mining unimproved values of all land in all States on a uniform basis, and partly because the Commission did not believe that freehold and leasehold land could be regarded as having the same revenue-raising capacity.

4.47 In its submission at the Brisbane Hearings, Queensland noted that the Commission had not adopted the principle ‘that the differences between States in the degree of alienation of land should be regarded as reflecting differences in State policy and differences in revenue-raising effort’. It claimed that the reasons

for this decision were not clear, and went on to suggest that: ‘W h e th e r the differences in revenue-raising capacity as betw een lan d taxes and lan d ren ts hav e arisen from alienation policies o r exem ptions fro m land tax,

th ey a re still differences resulting fro m policy decisions an d it still seem s to us

th at, w here policy decisions affect th e size of the tax base, allow ance should

be m ad e fo r th a t fact in assessing a claim ant S tate’s “n eed s” as com pared

w ith revenue actually collected.’

4.48 Queensland recognised that there were difficulties in making comparisons between States on this basis, but indicated its intention to look for a suitable method by which the comparison could be made. Meanwhile, it asked the Com­

53

mission to use its broad judgment to reduce its assessment of Queensland’s capacity to raise land revenues, so as to take account of the effects of differences between States in past policies of land administration and the effect of these differences on current revenues.

4.49 The Queensland submission raised a number of other issues, which it requested the Commission to consider should a method of comparison be used for 1973-74 similar to that for 1972-73. ft suggested that the revenue derived from auction perpetual leases in Queensland could be compared with that derived from suburban holdings and week-end leases in New South Wales. It repeated its claim that in the area of instalment purchases, Queensland’s conversion values were determined at the date of application to convert, whereas ‘the purchase price of most New South Wales tenures, except where the tenures commenced after 1964,

was based on the long-standing rental value which bears little or nor relationship to land values current at the time of purchase’. In comparing revenue-raising capacity in relation to land sales, Queensland questioned the validity of the principle of making an allowance for the rental revenue forgone by the State as a result of its freeholding policies, and the accuracy of the notional amount

determined by the Commission. Evidence given at the Hearings by representatives of the Queensland Department of Lands provided information about various types of land tenure, the revenue derived from land transactions, and the valuation of Crown lands in Queensland.

4.50 The Australian Treasury, in its submission at the Canberra Hearings in April 1975, repeated the comments it had made on previous occasions (see paragraphs 4.84 and 4.85 of the 41st Report (1974)). In supporting the Queensland argument it again questioned the Commission’s approach of assessing the claimant States’ needs by way of separate calculations for land tax and land rentals. The approach favoured by the Australian Treasury was to treat land tax and land rentals together, to regard any differences between States in proportions of free­ hold and leasehold land as reflecting differences in State policy, and thus to regard any differences in the relative amounts of State revenue arising from the differing charges on alienated and unalienated land as due to differences in effort, not

differences in capacity. The Australian Treasury also repeated its suggestion that revenue from Crown land sales should be modified from the States’ budgetary accounts, and requested the Commission’s reaction to this view.

4.51 The Commission has given consideration to the various submissions on the treatment of land revenues. It is still not convinced that it is appropriate in principle to assume that all land revenues are derived from a single revenue base. Under the Commission’s normal procedures, the assessment of a claimant State’s need is made by applying the revenue efforts of the standard States to differences in the revenue bases as between the claimant and the standard States. So long as the standard States themselves separate the revenue bases from which they derive land revenues, it may be argued that the Commission should continue to make separate calculations of revenue-raising capacity. Neither Queensland nor the Australian Treasury has demonstrated that freehold and leasehold land can be regarded as having the same revenue-raising capacity.

4.52 The main argument for treating all land revenues together is that differ­ ences in the extent to which revenues are derived from the several sources reflect differences in past State policies, and that the assessment of a claimant State’s needs should be independent of its own policies, whether past or present. But the Com-

54

mission has consistently taken the view, during recent years at least, that it is not feasible to trace the effect of past policies in assessing current needs. In relation to mining royalties, for example, Queensland has argued that the revenue base should exclude the value of coal in land which was alienated before legislation was

passed reserving mineral rights to the Crown, and on which royalties accrue to private landowners and not to the Government. In discussing this problem, Queens­ land said: ‘It is considered that this is a matter of history which the Government must live with.’ The Commission is inclined to adopt a similar position with

respect to the State’s need for land revenues.

4.53 This in itself would not prevent the Commission from adopting the aggregated approach proposed by Queensland and the Australian Treasury, if it could be shown that both freehold and leasehold land could be regarded as having the same revenue-raising capacity, and if a way could be found around the

practical problem of establishing reliable estimates of the revenue base. The Commission has noted that Queensland intends to undertake further studies directed towards a comparison of the revenue base in Queensland and the standard States.

4.54 Meanwhile, the Commission has examined the possibility of using un­ improved land values as the measure of the base for all land revenues, and has decided that at present it is not possible to derive comparable figures for this purpose. Figures obtained by the Commission suggest that the per capita un­

improved value for New South Wales is more than twice that for Victoria and about two and a half and three and a half times that for Queensland and South Australia respectively. The Commission considers that the New South Wales figures may reflect peculiarities in the land market in Sydney and that this, along with the general problem of ensuring comparability in valuation procedures among

the States, makes it impracticable at present to use unimproved values as a measure of relative revenue-raising capacity.

4.55 For 1973-74, the Commission has continued to assess the claimant States’ needs by way of separate calculations for land tax, land rentals and proceeds from the sale of Crown land. For both Queensland and South Australia the Commission has assessed needs in relation to land tax in accordance with

the procedures outlined in the general approach for taxation (see paragraphs 4.4 and 4.5). In making these calculations, the tax bases in the various States have been adjusted to take account of differences in the dates at which valuations for land tax purposes were determined, in accordance with recommendations

of the Commission’s consultant.

4.56 in considering Queensland’s needs in relation to land rentals and the proceeds of land sales for 1973-74, the Commission has based its calculations on the methods used for 1972-73. In making these calculations, however, the follow­ ing decisions have been made in relation to issues raised by Queensland and the

Australian Treasury:

(a) Queensland’s rentals on auction perpetual leases have been compared with rentals on suburban holdings and week-end leases in New South Wales; ( b) Queensland’s comparative taxable capacity in relation to instalment

sales has been reduced as a result of the Commission’s judgment that Queensland’s tax effort is not as much below that of New South Wales as had previously been determined; and

55

(c) the notional amount deducted for rentals forgone in relation to Queensland’s land sales revenue has been reduced.

4.57 If these factors alone had been taken into account, Queensland’s capacity to raise revenue from land rentals and land sales would have been judged to be above standard to a greater extent than its capacity to raise revenue from land tax was judged to be below standard; that is, the Commission would have assessed negative needs for Queensland for land revenues generally. As noted in paragraph 4.55, for 1973-74 the Commission has not accepted the argument that land revenues should be aggregated for the purpose of assessing needs in this area. However, on the basis of the evidence presented and its own investigations it has formed the judgment that Queensland’s overall capacity in relation to land revenues is not above standard. It has therefore reduced the negative needs for land rentals and land sales to an amount which, when aggregated with the positive needs assessed for land tax, produces zero overall needs for Queensland in the general area of land revenues.

4.58 The Commission has rejected the proposal of the Australian Treasury that all revenue received by way of land sales should be modified from the States’ budgetary accounts, because it believes that differential capacity to raise revenue from different sources is a factor which should be taken into account in assessing a State’s need. In order to ensure that the assessment of need is not affected by the policy which a claimant State adopts in relation to the choice between selling and leasing land, it is necessary in making comparisons between the claimant and the standard States to allow for rental forgone on land which is sold.

4.59 For South Australia the Commission assessed positive needs for land rentals and sales by using similar methods to those adopted for 1972-73.

M i n i n g R o y a l t ie s

4.60 In paragraphs 4.91 to 4.100 of its 41st Report (1974), the Commission gave an account of the methods used to assess needs in the area of mining royalties revenue for 1972-73. While recognising that the procedures adopted were not perfect, the Commission considered that they overcame many problems and went some way towards achieving an equitable assessment of needs in this area.

The Report also stated the intention to keep the matter under review and invited further submissions from interested parties. The Australian Treasury and the claimant States generally supported or accepted the Commission’s new approach, while suggesting a need for further refinement in its application.

4.61 In determining the revenue base for the purpose of assessing need in relation to mineral royalties for 1972-73, the Commission had regard to the total production in each standard and claimant State of all minerals, whether or not a State received royalties from all of its production. At the Brisbane Hearings in December 1974, Queensland submitted that the revenue base should consist only of the value of minerals in respect of which the State receives royalties. It gave the example of a group of coal mines situated on private property where royalties are paid exclusively to the private land-owners. The Mining Act in that State reserves the Crown’s mineral rights to all land alienated since a specified date. On land alienated prior to that date only a few specified minerals are reserved to the Crown. It was therefore submitted that the Commission should exclude from the revenue base any minerals over which the Crown holds no rights. A sub­

56

mission along similar lines was made by South Australia at the Adelaide Hearings in February 1975.

4.62 The legislative provisions governing the Crown’s rights to minerals are comparable as between the claimant and the standard States, in that none is able to assert mining rights or claim mining royalties in respect of mineral production from land alienated prior to the enactment of the relevant mining legislation (at

least not without payment of compensation). In these States, rights to most minerals were not reserved to the Crown until late in the 19th or early in the 20th century. It would be possible to regard the extent to which mineral production is exempted from royalty payments as essentially a matter of State policy, but during recent

years at least the Commission has not considered it feasible to trace the effects of past policies in assessing current needs. It is therefore inclined to accept the view of Queensland and South Australia that the revenue base should be restricted

to mineral production on which Crown royalties can be levied. For 1973-74, how­ ever, it has been unable to obtain comparable data on such a basis. It has therefore decided that the assessment of needs in the field of mining royalties for 1973-74 should continue to be based upon total production of each mineral. For

the future, it will seek further information with a view to restricting the revenue base to mineral production on which Crown royalties can be levied.

4.63 Although, wherever possible, the revenue base for each mineral was calculated separately in 1972-73, it was explained in paragraph 4.95 of the 41st Report (1974) why it had not been possible to do this for copper, silver, lead and zinc. Data limitations prevented an individual comparison of these minerals in

the case of South Australia, whilst the assessment of royalties on the basis of company profits in New South Wales and Queensland necessitated their aggrega­ tion in the Queensland assessment. More detailed information has been made available in respect of the year of review 1973-74 and the Commission has been

able to assess South Australia’s needs on account of royalties from copper produc­ tion separately from the other minerals with which it was previously grouped. Because of the method by which royalties are assessed in New South Wales and Queensland, the Commission has continued to assess Queensland’s needs on

account of copper, silver, lead and zinc on an aggregated basis.

4.64 In paragraph 4.96 of the 41st Report (1974) it was explained that, because detailed royalty figures for individual minerals were not available from several States, it had been necessary for the Commission to use indirect methods in assessing the claimant States’ revenue needs arising from royalties for each mineral. In brief, standard royalty rates were calculated by reference to the

nominal rates applying in New South Wales and Victoria, weighted in accordance with the value of production for individual minerals in those States. The needs were then assessed on the basis described in paragraph 4.97 of the 41st Report.

For 1973-74 the Commission has obtained data on the amounts of royalty and value of production for individual minerals. This information has been used to calculate the claimant States’ needs for mining royalties by reference to the average rate of royalty in the standard States and a comparison of the values of production

in both the claimant and standard States f o r . individual minerals. The needs (positive or negative as the case may be) have been assessed as the difference in the per capita value of production between the claimant and the average of the standard States, multiplied by the weighted average rate of royalty in the standard States (weighted in accordance with the value of production in each State) and by

57

the claimant State’s population. The assessed needs for individual minerals have been aggregated in order to determine the needs for all minerals.

4.65 As explained in paragraph 4.98 of the 41st Report (1974), a problem arises where a mineral is produced in a claimant State but is not produced in significant quantities in either of the standard States. In these circumstances, it is necessary for the Commission to determine a standard royalty rate by broad judgment, and to apply this to the value of production in the claimant State in order to assess the State’s negative need in relation to royalties for the mineral in question. The assessment of negative need is thus not determined by reference to the actual royalty rate in the claimant State or any rate which may have been specified in a standard State. Following a further examination of royalty rates for iron ore and bauxite elsewhere in Australia and in other parts of the world, the Commission has decided to retain the standard royalty rate for iron ore which it determined for 1972-73 but to increase the standard royalty rate for bauxite.

4.66 In paragraph 4.99 of the 41st Report (1974), the Commission indicated that it had accepted Queensland’s argument that railway profits on the haulage of export minerals are in the nature of royalties. In assessing needs in relation to mining royalties, differential profits from mineral traffic as between Queensland and the standard States are therefore treated as pertaining to royalties rather than to railway operations. At the Canberra Hearings, the Australian Treasury ques­ tioned this procedure and said that, for it to be justified,

‘(i) it would have to be taken that the fact that the State has access to this kind of railway revenue to a greater extent than the other States results from a greater overall effort by Queensland (taking royalties and railway charges together) than the other States — neither Queensland nor the Commission seems to us to have established that; (ii) the Commission should make similar “adjustments” to the railways

figures in other cases where States policies have affected the volume of business’.

The Commission confirms that its approach, the application of which has depended on information supplied on a confidential basis, is consistent with these propositions.

T r e a t m e n t o f A u s t r a l ia n G o v e r n m e n t S p e c if ic P u r p o s e P a y m e n t s to S t a t e s fo r R e c u r r e n t P u r p o s e s

4.67 In arriving at its recommendations for completion grants for the year of review 1973-74, the Commission has had to take into account for the first time the effects of some major extensions of Australian Government payments to States for recurrent purposes in the field of education. As from 1 January 1974, the

Australian Government took over full financial responsibility for financing tertiary education, so from that date there has been no net charge upon State budgets for expenditure on universities, colleges of advanced education and teachers colleges. Also, as from 1 January 1974 all States have been receiving grants arising from the recommendations of the Interim Committee for the Australian Schools Com­ mission. Following the presentation of the Committee’s report in May 1973, the Australian Government established the Schools Commission as a statutory body, and that body reported to the Government in June 1975 recommending the pay­ ment of grants for the triennium 1976-1978. Some of these grants are for recurrent expenditure in government schools, and some are for recurrent expenditure in

58

non-government schools. Grants are also being made for capital purposes, but the Grants Commission’s assessment of needs is not directly affected by Australian Government grants to States for capital purposes. These matters were raised in the

written submissions of the claimant States and the Australian Treasury and received considerable discussion at the 1974-75 Hearings.

4.68 The Commission has also considered the implications, for its assessment of a recommended advance grant for Queensland for 1975-76 and a completion grant when 1975-76 becomes the year of review, of those provisions of the Health Insurance Act 1974 which allow the Australian Government to enter into an

agreement with a State for the provision of hospital services. This matter was discussed at the Canberra Hearings on 14 April 1975, and following that discussion the Queensland Treasury representatives asked the Commission to indicate how it would propose to assess the State’s expenditure and revenue needs in connection with hospital services in the event of its entering into an agreement with the

Australian Government whilst one or both of the standard States had not done so. In view of the important financial implications for Queensland, the Commission felt that it should, in accordance with a practice adopted on some previous occasions, accede to Queensland’s request.

4.69 It is appropriate, therefore, that the Commission should at this stage review its treatment of the various specific purpose grants to the States and indicate the general principles which it proposes to adopt in dealing with these new developments.

4.70 The Commission has used three general approaches to the assessment of needs in those fields which are the subject of specific purpose grants:

(a) The exclusion approach, whereby all the expenditure on the program which is the subject of the specific purpose grant, and all the sources of revenue identified with the financing of the program, are excluded from the standard used by the Commission in its assessment of expen­

diture and revenue needs. Thus expenditure on the program financed from State funds is excluded as well as expenditure financed through the grant, and States taxes or charges whose proceeds are earmarked for the program are excluded as well as the grant.

(b) The deduction approach, whereby the specific purpose grant is deducted before determining the standard to be used by the Com­ mission in its assessment of expenditure and revenue needs. In this approach the Commission continues to take into account in its assess­

ment of revenue and expenditure needs the receipt and disbursement of funds obtained from State revenue sources.

(c) The inclusion approach, in which the Commission takes into account the expenditure of the specific purpose grant, as well as the funds provided from State revenue sources, in determining the standard used in its assessment of expenditure needs, and treats the receipt of the

grant as if it is part of State revenue resources. Thus, where the grant per capita received by the claimant State exceeds the average per capita grant received by the standard States, the excess is treated as meeting part of the claimant State’s assessed needs; and in the converse

case the deficiency is treated as adding to its assessed needs.

59

The Exclusion A pproach

4.71 The Commission takes the view that the exclusion approach is appro­ priate in cases where the Australian Government has taken over full financial responsibility for a specified expenditure program. In such cases there is no net charge upon State budgets. It can therefore be argued that, if there are special difficulties in providing the service in question in a claimant State, necessitating a larger expenditure per head of population in that State in order to provide a comparable service to that in the standard States, the disparity cannot be eliminated by the Grants Commission through the special grant. Rather there must be an equalisation element in the distribution among the States of the specific purpose grant. The Commission has decided to adopt the exclusion approach in dealing with expenditure on tertiary education from 1 January 1974.

4.72 The Queensland Treasury has opposed adoption of the exclusion approach in the case of colleges of advanced education. Its argument is based on the facts that, up to 1972-73, the Commission assessed a claimant State’s needs in this field on the basis of a comparison of the numbers in the age-group

16 to 24 years in the populations of the claimant and the standard States, and that Queensland’s actual expenditure was less than the Commission’s standard. In effect, this meant that Queensland had chosen to use some of the amount, assessed by the Commission as necessary to attain the standard range and quality of services

in this field, either to have an above-standard level of services in some other field or to have below-standard severity of taxation. Queensland pointed out that it had received no budgetary benefit from the assumption of financial responsibility for the colleges by the Australian Government, because its financial assistance grant had been reduced by the amount previously spent on the colleges by the State. It submitted that, at least until the end of the current triennium, the Commission should include as an element of need for the State an amount determined by reference to the previous shortfall in Queensland’s expenditure on the colleges below the standard expenditure as determined by the Commission.

4.73 The Commission acknowledges that adoption of the exclusion approach in the case of colleges of advanced education may result in the assessed special grant for Queensland being lower than it would have been if the pre-1974 arrange­ ments had continued. However, it considers that it should not adopt the course

of action proposed by Queensland. The assumption by the Australian Government of financial responsibility for tertiary education has been agreed between the governments concerned, and the agreed financial arrangements include a provision that the estimated amounts of recurrent expenditure of which the States would

thereby be relieved should be deducted from the financial assistance grants other­ wise payable. The Australian Government has special machinery to advise it concerning needs for expenditure on colleges of advanced education, namely, the Australian Commission on Advanced Education. The Grants Commission considers that it should not continue to assess a financial need for a claimant State in an area for which the State no longer has any financial responsibility.

4.74 For several years the Commission has also adopted the exclusion approach in dealing with road finance.1 Most expenditure by the States on roads is financed from State motor taxes earmarked for the purpose and from Australian i

i A partial exception was m ade in the case of Tasm ania. F or details see paragraphs 137

and 138 of the 36th Report (1969).

60

Government grants. In all States motor tax revenue is paid into special funds (either directly or by transfer from Consolidated Revenue) after deducting costs of collection, police traffic supervisory duties and several minor items. In some States, a relatively small portion of motor taxation revenue is used for general

revenue purposes. There is also a cost to Consolidated Revenue by way of unrecovered debt charges on State loan funds allocated for road expenditure. The Commission’s procedure has been to eliminate any impact of road finance on State budgets (including the receipt and expenditure of the Australian Govern­

ment grants) in making its assessment of needs. It has taken the view that the distribution of road grants among the States can be presumed to have been determined in the knowledge that the funds contributed by the States as a condition of receiving the grants would be obtained from the States’ motor taxes. Also, since

the establishment of the Commonwealth Bureau of Roads in 1964 the Australian Government has had an expert body to advise it concerning the needs of the States. The Commission has therefore considered that any differences which there

may be in the capacity of the different States to raise revenue from motor taxes should not be taken into account in its assessment of the revenue needs of the claimant States. It has likewise excluded from its assessment of expenditure needs any consideration of the relative amounts of road expenditure in the

claimant States which would be needed to achieve parity with the standard States.

The Deduction Approach

4.75 The Commission adopted the deduction approach in dealing with the grants for tertiary education prior to 1974. For both universities and colleges of advanced education, the grants were determined on the basis of recommendations by expert bodies established to advise the Australian Government, and the grants

for recurrent expenditure were subject to a matching arrangement whereby the Australian Government provided (subject to a specified maximum for each State) $1 for each $1.85 contributed by way of State grants (from Consolidated Revenue) and fees.

4.76 In dealing with the grants for universities, the Commission took the view that it should accept the relative amounts in the different States of total university expenditure covered by the matching grant arrangements (i.e. the sum of State Government contribution, revenue from fees, and Australian

Government grant) as the amounts required to achieve parity as between the States. However, as the same matching ratio was applied to every State, a State in which a relatively large total university expenditure was deemed necessary would have to contribute (by way of fees and grants from State Con­

solidated Revenue) a relatively large amount per head of population. In other words, the distribution of the Australian Government grants among the States took no account of the relative capacity of the different States to contribute from their own revenue resources. The Commission therefore took any difference

between the claimant and the standard States in cost to the State budget per head of population as indicative of an expenditure need, positive or negative as the case may be. (Of course, for this purpose the Commission excluded any amounts in State budgets in excess of those required to qualify for the maximum matching

Australian Government grant; also, in assessing the needs of a claimant State it excluded any portion of the charge upon the budget of a claimant State attribut­ able to its having charged a below-standard level of university fees.)

61

4.77 In dealing with the grants for recurrent expenditure on colleges of advanced education, which began with the 1967-69 triennium and were sub­ sequently extended to include teachers colleges, the Commission took a different view. It considered that, even if the average level of fees were the same in the claimant and the standard States, the amounts charged to State budgets in order to qualify for the Australian Government grants did not give a proper indication of expenditure needs in the claimant States; they mainly reflected the results of differing State policies towards the development of these institutions. Therefore, it made its own assessment of the expenditure need for each claimant State on the basis of a comparison of the numbers in the age-group 16 to 24 years (taken as the ‘eligible population’1) in the populations of the claimant and the standard

States, taking as its standard the average cost to the State budget per head of eligible population in the standard States.

4.78 The Commission has adopted the deduction approach in dealing with several other specific purpose grants. In some cases it has followed a procedure similar to that adopted for universities prior to 1974. The grants to the States under the Tuberculosis Act 1948, which reimburse them for recurrent expenditure they incur in the diagnosis, treatment and control of tuberculosis to the extent

that a State’s expenditure in any year exceeds that for the year 1947-48, have been treated in this way. The Commission has deducted the receipt and expenditure of the grants, and included the differences in the per capita amounts financed from State sources in its assessment of expenditure needs. Natural disaster payments have been treated similarly. There is an understanding between the Australian and the State governments that the former will meet the costs of relief and restoration measures in excess of annual base expenditures fixed for each State. For State contributions up to these levels, the Commission takes any differences in the per capita amounts into its assessment of expenditure needs.

4.79 In other cases, such as the Australian Government grants for home care, community health, and blood transfusion services, the Commission has followed a procedure similar to that adopted for colleges of advanced education prior to 1974. The grants under these programs take the form of matching or supplemen­ tary payments to the contributions by the States, and the grants obtained by the different States appear to depend to a considerable extent on the policy initiatives of the States. In these cases the Commission makes its own assessment of expen­ diture needs, taking as its standard the expenditure by the standard States from their own resources.

The Inclusion Approach

4.80 The Commission has adopted the inclusion approach in dealing with the Australian Government payments towards interest on State debt under the Financial Agreement, and the debt charges assistance grants which commenced in 1970-71. These payments are not intended to achieve an expansion of expenditure in any particular field, but rather may be viewed as assistance to the States in meeting their revenue requirements. It may be noted that this approach would produce the same result for the special grant as the deduction approach in certain cases. For example, in the case of the grants for universities prior to 1974, discussed in paragraph 4.76 above, the grants were determined on the basis of a uniform

1 F or a detailed explanation of the eligible population basis of comparison, see paragraph 4.97.

62

matching ratio applied to every State, and the Grants Commission assessed expen­ diture need as the difference in net per capita cost to the State budget as between the claimant and the standard States.

The Schools Grants

4.81 The distribution between the States of the grants recommended by the Interim Committee for the Australian Schools Commission, referred to in para­ graph 4.67 above, has been based on criteria which differ in some important ways from those which the Grants Commission has used in previous years in its assessment of the expenditure needs of the claimant States in this field. Probably

the most important difference arises from the Interim Committee’s decision to take as one of its objectives (with respect to government schools) the equalisation between States of resource inputs. The general recurrent grants for primary schools are distributed between the States on the basis of expected pupil numbers, but the distribution of the grants for secondary schools also takes into account the Committee’s measures of resource use in schools in each State. Accordingly, States

with a relatively low resource use per pupil receive higher per pupil grants than those with a relatively high resource use, and the converse also applies. This is in contrast to the Grants Commission’s assessment of the expenditure need of a claimant State, which is arrived at by comparing the average actual expenditure

per head of population in the standard States with an estimate of what it would cost per head in a claimant State to provide a level of education equivalent of that of the standard States. Thus, the Grants Commission’s estimate of need is in principle independent of the actual policy of the claimant State. Under the Interim

Committee’s principle, however, a claimant State which had accorded a relatively high priority to school expenditure would on that account receive a relatively lower grant. In pointing to this contrast no criticism of the principle adopted by the Interim Committee is intended. In its Report the Committee has explained the

reasons for its interpretation of need (see, for example, paragraphs 14.6 and 14.7 of Schools in Australia1).

4.82 The grants being paid under the recommendations of the Interim Com­ mittee are directed towards increasing expenditure in schools and are not in substitution for continuing efforts by the States and non-government schools authorities. To this end, the States were asked to continue to allocate ‘to the

operation of these schools the same percentage of their total current budget expen­ diture (excluding expenditure in respect of business undertakings) as had been allocated in the financial year 1971-72’.

4.83 The Australian Treasury, in its submission at the Canberra Hearings in April 1975, stated that what is called here the inclusion approach ‘does . . . have appeal when the matter is looked at from the point of view of pure logic’, and that ‘from that point of view, it could, perhaps, be argued that the question of

distribution between the States should be examined and dealt with comprehen­ sively, having regard to a single and consistent principle’. However, on balance, it considered that the Grants Commission should follow what is here called the deduction approach in assessing needs for schools, in view of the fact that the

Australian Government has created a body to examine needs in primary and secondary education and is providing specific tied grants, ‘assessed on an explicit distribution concept’.

1 Australian Governm ent Publishing Service, C anberra 1973.

63

4.84 Both Queensland and South Australia in their most recent sub­

missions have suggested that the Grants Commission should adopt the inclusion approach in relation to schools grants. Both States referred to the prospect that the inclusion approach applied to school expenditure would result in a higher special grant than would be assessed by the deduction approach. They pointed out that this would not prevent attainment of the objective of having all of the additional schools grants flow into the schools. At the Adelaide Hearings in February 1975, South Australia discussed the possible uses of the ‘extra’ funds which would flow to the claimant States through the special grants if the Grants Commission included the expenditure of schools grants in the standard on which it based its assessment of needs. The following comments were made in paragraphs 104 and 105 of the State’s submission:

‘104. If the extra funds are used to further improve education facilities, then it is true that one aim of the Schools Commission will be partially cancelled out as the planned move towards full equality of standards will not be achieved. This will come about not as a result of the recommendations of the Grants Commission, however, but as a result of the actions of the Govern­ ments of the claimant States. In any case, it is difficult to see that the Schools Commission will have any serious cause for complaint as it will still have achieved the objective of overcoming the grossest inequalities and will see an unexpected further improvement in education in some States. We point out

in passing that, regardless of the actions of the Grants Commission, it will be possible for a State Government to increase its own provisions for education or to change its priorities within that total provision. 105. If the States use the extra funds to improve other services, or to postpone tax increases, then the aims of the Schools Commission will not have been affected at all.’

4.85 In the case of the schools grants it is not possible for the Grants Com­ mission to adopt the exclusion approach as it has done for road finance, discussed in paragraph 4.74 above. If it were to exclude all expenditure on schools (whether financed by the schools grants or from the States’ own resources) from its assess­ ment of expenditure needs, there would remain the problem of assessing the relative capacities of the different States to finance their share of the costs. The Schools Commission could not be expected to do this, because the funds con­ tributed by the States cannot be identified as coming from any particular source of State revenue. In other words, the relative capacities of the States to contribute towards education expenditure cannot be divorced from an assessment of their overall relative revenue-raising capacities.

4.86 Adoption of the deduction approach for the schools grants, as proposed by the Australian Treasury, would in effect introduce a major limitation to the application of the Grants Commission’s principle of financial need. The grants recommended by the Interim Committee for the Australian Schools Commission took into account the Committee’s assessment of the relative amounts of expendi­ ture on schools from all sources (both State funds and the schools grant) which would achieve parity in resource inputs between the States. The relative amounts of its recommended grants for the different States were determined on the basis of supplementing the funds already being provided by the States. The deduction approach would therefore restrict the Grants Commission’s standard for expenditure on education, on the basis of which the expenditure needs of the claimant States in that field would be determined in assessing their special grants, to the expenditure financed by the standard States from their own resources. It would also leave out of

64

account, in the Grants Commission’s assessment of the claimant States’ needs for special grants, any differences between them and the standard States in the per capita amounts of the schools grants. As a result, for example, a claimant State which had given a relatively high priority to education expenditure by having a below-standard level of expenditure on other social services would, with the deduc­

tion approach, lose the comparative benefit of its above-standard expenditure on education from its own resources without being able to increase its expenditure on other social services and receive an offset through the special grant. This would be inconsistent with the purpose of special grants recommended by the Grants

Commission.

4.87 In view of these considerations, the Grants Commission considers that its assessment of needs for expenditure on schools should be based on the inclusion approach. For the purpose of assessing the expenditure needs of the claimant States in relation to government schools, this would mean the adoption of a

standard based on the total schools expenditure for recurrent purposes (including expenditure under the headings Administrative and General, Training of Teachers, Primary, Secondary and Special Schools) from State and Australian Government sources in the standard States. In the case of non-government schools, the standard

would be based on the total of expenditure for recurrent purposes from State Government sources (including payments to pupils and payments to schools) plus the Australian Government grants for recurrent expenditures.1

4.88 However, because the Schools Commission was established with the express purpose of examining the financial needs of schools, the Grants Commission has sought information from the Schools Commission concerning the Interim Committee’s assessment of the comparative needs in the standard and claimant

States in the fields of government and non-government schools. This information was sought with a view to determining the amount of total expenditure per head of population in each claimant State which would have enabled that State to achieve parity in its schools with the average of the standard States. The Grants

Commission considers that any difference between the claimant and the standard States in the per capita amounts so determined should be taken as an expenditure need of the claimant State, positive or negative as the case may be. The Grants Commission would then supplement this assessment of needs by making its own

assessment arising from any aspect which had not been taken into account in the Interim Committee’s assessment. On the revenue side the Australian Government schools grants would be treated as if they were part of the revenue resources

of the claimant and the standard States, as explained in paragraph 4.70 above.

4.89 The Schools Commission has provided the Grants Commission with estimates of resource use in government and non-government schools relevant to the year 1973-74, based on the methodology employed by the Interim Com­ mittee. However, in the time available for determining the amounts of completion

grants for Queensland and South Australia for 1973-74 to be recommended for inclusion in the Australian Government’s budget for 1975-76, it has not been possible to integrate those estimates with the Grants Commission’s own assess­ ment of needs. Also, it has not been possible in the time available to allocate

the grants for non-government schools between primary and secondary schools so as to apply the inclusion approach to the assessment of needs.

1 Any differences between States in the extent to which non-government schools are financed by fees or are staffed by people receiving less than standard salary rates would thus be excluded from the assessment of need.

65

4.90 In these circumstances the Grants Commission has decided that, for the year of review 1973-74, it will continue to use its own assessment of needs in this field, employing the deduction approach. In reaching this decision the Com­ mission has also had in mind that the new schools grants relate only to the second

half of the financial year 1973-74. Furthermore, on the basis of the Grants Com­ mission’s own assessment of need it would appear, from such calculations as are possible with the available data, that for 1973-74 the choice between the inclusion approach and the deduction approach makes practically no difference to the final estimate of need for Queensland and has a comparatively small effect on that for South Australia.

4.91 It is proposed to examine this matter in more detail, in consultation with the Schools Commission, the claimant States and the Australian Treasury, for the purpose of determining completion grants to be recommended for 1974-75. Further comment is invited from the interested parties.

Medibank Grants for Hospitals

4.92 As noted in paragraph 4.68, the Commission decided that it should indicate how the expenditure and revenue needs of a claimant State would be assessed in the event of its entering into an agreement with the Australian Govern­ ment relating to the finance of hospitals under the Medibank Scheme, whilst one or both of the standard States had not done so. After considering this matter in relation to the whole question of the treatment of specific purpose revenue assist­ ance to the States, the Commission decided that, in the event of one or both of the standard States not entering into a similar agreement, its assessment of the needs of a claimant State would not be affected by the non-participation of the standard State or States. In reaching this conclusion, the Commission was concerned to ensure that its procedures should not have the effect of preventing a claimant

State from obtaining financial advantages under specific purpose assistance arrangements in this field merely because one or both of the standard States had elected not to participate in those arrangements. Conversely, a claimant State should not receive a financial advantage merely by not entering into arrangements in which one or both standard States had elected to participate.

4.93 As far as the assessment of needs in the field of hospital services is concerned, the statement of the Commission’s attitude in the preceding paragraph does not commit it to any one of the three general approaches to the assessment of needs which have been discussed in this chapter. The Commission considers that, until full details of the arrangements entered into between State govern­

ments and the Australian Government are known, it would be premature to express any further view on this matter.

E x p e n d it u r e o n So c ia l S e r v ic e s

The General Approach

4.94 Expenditure by State governments on social services is a large part of their total budget expenditure and enters to an important degree into the Commis­ sion’s assessment of the financial needs of the claimant States. The Commission’s general approach in this area is to take each field of social services and estimate, as accurately as possible from the available information, what the budgetary cost

per head of population would be in each claimant State if it operated those services

66

at a level equal to the average of the standard States (in terms of the range and quality of the services provided). For this purpose the Commission has for 1973-74 averaged the results of two separate calculations. Each calculation involves a com­ parison of the cost per capita in a standard State with the estimated cost of

providing an equivalent service in the claimant State, multiplying the difference by the population of the claimant State in order to assess the claimant State’s need in the field. Following discussions with the interested parties, the Commission has decided to adopt this method of averaging, which differs slightly from that

described in paragraph 5.7 of the 41st Report (1974). If the estimated cost per capita of providing standard services is estimated to be lower in the claimant than in the standard States, the comparison gives a measure of negative need, to be offset against the positive expenditure needs in other fields.

4.95 In each particular field of expenditure the Commission therefore seeks an appropriate basis of interstate comparison, which will enable it to judge whether the claimant State ‘needs’ to spend more (or less) per head of popula­ tion than the average expenditure of the standard States in order to provide

State services of the same average range and quality. The appropriate basis of comparison may be different for different services. In recent years the Commission has used three different unit measures. These are explained briefly in the following paragraphs.

4.96 Total Population (or Per Capita) Basis. For some services, for example, police and hospitals, the Commission considers that population itself provides the best available indicator of relative costs of providing the services. In cases of this kind it considers that, unless the claimant State’s costs are increased by

special difficulties arising from administrative or geographical causes beyond its control, the State could provide the service at a level equal to the average of the standard States for about the same per capita expenditure. In such cases any expenditure need assessed by the Commission is confined to its estimate

of the cost to the claimant State’s budget arising from these special difficulties (which arise from such factors as small scale of administrative services, sparsity of population, relatively high maintenance expenditures and distances from population centres).

4.97 Eligible Population Basis. For some other services the Commission considers that the best available basis of comparison is provided by identifying that section of the State population for which the service is made available. That section, which may be called ‘eligible’ population, is a group which, because

of age or some other characteristic, is likely to contain within it all or most of those for whom the service is available, though there may be a significant pro­ portion of the group which does not actually use the service in any particular year. Examples of such an eligible population are the population in the age group

0 to 18 for child welfare expenditure, and the number of age, widow, invalid and service pensioners for expenditure on relief of the aged, indigent and infirm. In such cases the comparison indicates a positive expenditure need if the ratio of eligible population to total population is higher for the claimant State than for the

standard States, the measure of the need being the product of the ‘excess’ eligible population of the claimant State and the expenditure per unit of eligible population in the standard States. (In the opposite case a negative expenditure need is indi­ cated.) In such cases the Commission also examines the possibility that there may be an additional expenditure need arising from special difficulties of the kind described in paragraph 4.96.

67

4.98 Units of Use Basis. In some other fields the Commission considers that the best available basis of comparison is the number of units of use over the relevant year (that is the number of people or units for which the service is actually being provided). An example is expenditure on gaols, where the average daily number of prisoners is taken as the basis of comparison because there are differences between States in the ratio of prisoners to population and the Com­ mission has not been able to obtain any evidence indicating that these interstate differences are due to differences in State government policies. On this basis a positive expenditure need is assessed if the ratio of units of use to total population is higher for the claimant State than for the standard States, the measure of the need being the product of the ‘excess’ units of the claimant State and the expendi­

ture per unit of use in the standard States. (In the opposite case a negative expen­ diture need is indicated.) In these cases also the Commission examines the possibility that there may be an additional expenditure need arising from special difficulties of the kind described in paragraph 4.96.

4.99 In some fields, notably expenditure on primary and secondary educa­ tion, the factors which are relevant to an assessment of expenditure need are so complex that a simple application of one of these three bases of comparison would not produce acceptable results. For a discussion of the assessment of expenditure needs in primary and secondary education see paragraphs 4.107 to 4.114.

4.100 Whatever the basis used for the Commission’s assessment of expendi­ ture need, the essential requirement is to have a workable distinction between those interstate differences in expenditure per head of population which arise from causes beyond the control of the respective State governments (and there­ fore represent interstate differences in fiscal capacity as described in Chapter 2, paragraphs 2.1 to 2.3) and those which are attributable to differences in State policies. The fact that the Commission does not take the latter into account in its assessment of expenditure need does not, of course, imply that the Commission in any way criticises policy differences between States or desires to see them reduced or eliminated. But it would clearly be inconsistent with the general prin­ ciple of financial need if a claimant State could provide social services superior to those of other States and have the resulting extra cost met through a special grant from the Australian Government (financed from revenue collected from taxpayers in all the Australian States). The aim of the Commission’s methods is to leave it open to a claimant State to provide superior services if it so decides and is willing to make a corresponding extra revenue-raising effort. Conversely, a claimant State may choose to provide an inferior service in any field and, by so economising, provide a superior service in another field or impose less severe taxation than the

standard States. In determining allowances for special difficulties for Queensland in relation to the provision of police, hospital and education services in remote areas of the State, data limitations have prevented the Commission from comparing the costs of providing services in the standard States with the costs of providing comparable services in the remote areas of Queensland. It has judged that the allowances may be satisfactorily determined by reference to the differential costs of providing services in the standard and remote areas of Queensland. During each of the three years concluding in 1973-74, these allowances have been determined as absolute monetary amounts (see paragraphs 4.113, 4.133 and 4.137). However, in order to ensure that the allowances for special difficulties in future years are not affected by State policies in the fields concerned, the Commission intends as

68

from 1974-75 to determine the allowance in each field as a percentage addition to the average per capita expenditure taken as the standard in that field. The per­ centage will be determined by reference to the experience which the Commission has gained in making its assessments in each field for each year up to and including

1974-75, and the percentage will be reviewed from time to time in the light of further submissions from the interested parties.

Social Services Modifications

4.101 In determining needs in respect of social services the Commission makes modifications to certain items of revenue and expenditure which are recorded in the published budgetary accounts (see paragraph 3.23). The need for many of these modifications recurs each year. For 1973-74 new modifications were made

for a number of items in the social services area as described in the following paragraphs.

4.102 Community Welfare Payments, Victoria. The following Australian Government payments in support of various social services, relating to the year of review 1973-74, were not received by Victoria until July 1974. The payments comprised:

(a) paramedical services $131,000; (b) school dental scheme $550,000; (c) home care $215,000; and (d) home care-loan repayments $30,000.

As these payments related to the year of review, they have been taken into account in assessing needs for social services in that year.

4.103 Legal Aid Fund, Victoria. In 1973-74, Victoria received an Australian Government grant of $557,728. An amount of $48,000 remained unexpended at 30 June 1974. This amount has been excluded from the budgetary accounts.

4.104 Hospital, Motherhood and Child Welfare Fund, Queensland. At 30 June 1974, $198,000 of the Consolidated Revenue Fund allocation to this fund for 1973-74 was unexpended. This amount has been excluded from the expendi­ ture used in the Commission’s comparison for this item.

4.105 Community Health Facilities, Queensland. In 1973-74, Queensland received an Australian Government grant of $2,201,650 for community health facilities. An amount of $61,000 remained unexpended from the grant at 30 June 1974. This amount has been excluded from the budgetary accounts.

4.106 Community Welfare Grants Fund, South Australia. In South Australia’s budgetary accounts for 1973-74, an amount of $240,000 was transferred to the Community Welfare Grants Fund for assistance towards training youth leaders and providing community facilities. An examination of the transactions of the

Fund has shown that payments of $201,000 were made during the year, leaving $39,000 unexpended at 30 June 1974. The Commission has excluded the amount of $39,000 from the South Australian budgetary accounts for 1973-74.

Expenditure on Education

4.107 Since the year of review 1962-63 the Commission has compared major areas of State government expenditure on education, including expenditure on

6 9

administration and teacher training as well as that directly related to primary and secondary schools, by reference to the number of school pupils enrolled in each State.1 Commencing with the year of review 1968-69, it has obtained separate figures for State government expenditure on government and non-government schools (or pupils), and has made separate comparisons for each category by relating the former to enrolments in government schools and the latter to enrol­ ments in non-government schools.

4.108 The Commission considers that cost per pupil is more likely to vary with grade than with the pupil’s age, and that the major cost difference is that between the average cost per primary pupil and the average cost per secondary pupil. The number of pupils is in turn influenced by the differing practices of the States with regard to admission of school beginners below the age of six,1 2 and by the differing structures of secondary education in the States which influence the proportions of pupils continuing with schooling beyond the minimum leaving age of fifteen years.3

4.109 For 1972-73 the Commission adopted a method of comparison which took account of these considerations. The steps in the method were as follows:

(a) accept the existing percentage distribution of enrolments in each State between government and non-government schools and also the existing total of enrolments in all schools for pupils aged 6 to 14 years; (b) for children under 6 years of age, estimate the ‘notional’ enrolments

for each claimant State by calculating the proportion of children aged 4 and 5 years at school in the standard States and apply this proportion to the total number of children in the 4 and 5 year age-groups in the claimant State; (c) for children aged 15 and over, estimate the notional enrolments for

each claimant State by taking, for each age-group, 25 per cent of the actual number of pupils in each age-group 15 to 18 and over, plus 75 per cent of the notional number calculated when standard retention ratios for each age-group are applied to actual pupils aged 14 (this procedure implies that 75 per cent of the differences between retention ratios is due to differences in State government policies and 25 per cent to economic or other non-policy influences); (d) estimate the standard cost per primary pupil and standard cost per

secondary pupil by matching expenditure details (classified according to the standard States’ school systems) with the school census enrol­ ment figures on a grade basis;

1 Throughout this period expenditures under the headings ‘T ransport of school children’, ‘University’, and ‘Libraries, M useums, etc.’ have been examined separately by the C om ­ mission. Commencing with the year of review 1969-70, the Commission has also made separate comparisons for expenditure in the categories ‘Technical’ and ‘A gricultural’, using as the basis of com parison the estimated numbers in each State’s population in

the age-group 16 to 24 years. C ertain aspects of expenditure on T ransport of school

children, Technical education and Universities are referred to in paragraphs 5.9 to 5.11 and 5.13 to 5.15 of this Report. 2 School attendance throughout A ustralia is compulsory once a child reaches the age of six, but there are differences between States in the arrangem ents which are made

for pupils to commence before attaining their sixth birthday. 3 Queensland and South A ustralia have a school structure containing only five secondary grades (twelve years in total), as compared with six secondary grades (thirteen years in total) in each of the standard States.

70

(e) apply these standard unit costs to the numbers of primary and secon­ dary pupils respectively in each claimant State calculated by appor­ tioning its notional total number of pupils between primary and secondary grades on the basis of the percentage grade distribution found in the standard States. This produced an estimate of what the utilisation and cost structure would be in each claimant State if its educational policies were similar to those of the standard States. The difference between the amount so calculated and the amount calculated by applying the standard unit costs to the claimant State’s actual enrolments was taken as the measure of the State’s need. Similar calculations were made for non­ government schools.

4.110 This method of comparison was the subject of discussion between the Commission and the claimant States during the year. At the Brisbane Hearings in December 1974, Queensland submitted that it was difficult to accept that as much as 25 per cent of the difference between the actual and notional number of

students in the over 14 age-group was due to non-policy differences. It suggested that the Commission should make no allowance for non-policy differences and should use the notional numbers calculated when standard retention ratios for each

age-group were applied to actual pupils aged 14. It claimed that any differences between the actual and notional numbers of pupils in the over 14 age-

group were due to the fact that Queensland pupils ‘on average complete their secondary school education six months early’, thus preventing any comparability between the States on an age-grade basis. During the year Queensland submitted some further information on retention ratios for various geographical areas. This

information appeared to support the Queensland case, but it was received too late in the year to enable a thorough examination of its implications.

4.111 At the Adelaide Hearings in February 1975, South Australia questioned the Commission’s method of distributing pupils between government and non­ government schools for pupils aged 4 and 5. For 1972-73 the Commission had made its calculations for pupils aged 4 and 5 in the manner outlined in paragraph

4.109 above. However, separate standard proportions had been calculated for government and non-government schools. South Australia argued that there should be one calculation for each age-group to establish the notional numbers of pupils and that these numbers should be distributed between government and non­ government schools in accordance with the distribution of actual enrolments in

the claimant States. This treatment would then be consistent with the principle adopted for those age-groups where actual enrolments are used. The submission included information which indicated that in the youngest age-groups a high proportion of pupils in the standard States attended government schools, but that

this proportion declined as age increased. However, in South Australia, where there is a greater proportion of pupils attending government schools in all age-groups than in the standard States, the proportion at government schools in the under 6 age-group is less than that for the older age-group. South Australia took this as evidence that the proportion of the under 6 enrolments in government schools in

that State was depressed below the level that would otherwise be expected by the limited number of places available.

4.112 For 1973-74 the Commission has calculated the notional numbers in the same manner as for 1972-73 except that it has reduced, on the basis of broad judgment, the allowance for non-educational factors and it has accepted South Australia’s argument in respect of the under 6 age-group. For the 15 to 18 and

71

over age-groups the comparisons have been made by taking 85 per cent of the notional numbers and 15 per cent of the actual numbers for each age-group. For the 4 and 5 year age-group, the total notional numbers have been allocated between government and non-government schools in accordance with the actual distribution in each claimant State.

4.113 In addition to calculating needs for education expenditure on the above basis, the Commission has considered a claim by Queensland for an allow­ ance for special difficulties. Queensland claimed that special difficulties resulted from the large area of the State, population dispersal, distance of population centres from the capital city and adverse climatic conditions (see also Hospital Expenditure, paragraphs 4.129 to 4.135, and Police, paragraphs 4.136 and 4.137). After reviewing the detailed information provided by the Queensland Education Department, the Commission has decided that special difficulties arising from these factors do exist. A total allowance of $1,833,000 has been made for the higher cost of staff transfers, freight charges, secondary departments in primary schools, living-away-from-home and travelling allowances for student teachers, in-service training for teachers, remote area allowances paid to primary and secondary pupils, maintenance of school buildings, and transport of school children. The last item is further discussed under Transport of School Children (paragraphs 4.117 to 4.122).

4.114 From 1 January 1974 all States have received grants arising from the recommendations of the Interim Committee for the Australian Schools Com­ mission. Possible ways in which the Grants Commission might take these grants into account in its assessment of the claimant States’ needs for education expen­

diture were the subject of detailed discussion during the year, both between the Commission and the claimant States and the Australian Treasury, and between the two Commissions. The decisions arising from these discussions are set out under Treatment of Australian Government Specific Purpose Payments to States for Recurrent Purposes (paragraphs 4.67 to 4.93).

Colleges of Advanced Education

4.115 In previous years the Commission has compared the net costs to the budgets of the claimant and standard States for colleges of advanced education on the basis of the population in each State in the age-range 16 to 24 (see para­ graph 4.126 of the 41st Report (1974)). As from 1 January 1974 the Australian Government has assumed full financial responsibility for the colleges of advanced education, and reductions in State expenditure on the colleges have been offset by equal reductions in the financial assistance grants to the States.

4.116 The Commission has considered the arguments put to it on the treat­ ment of expenditure on colleges of advanced education. It has decided that as from 1 January 1974, when the Australian Government assumed full financial respon­ sibility for tertiary education, all expenditure on and receipts from tertiary educa­ tion in the States will be excluded from the Commission’s assessment of needs. The arguments put to the Commission on this matter and the reasons for its decision are discussed under Treatment of Australian Government Specific Purpose Pay­ ments to States for Recurrent Purposes (paragraphs 4.67 to 4.93). For 1973-74 needs have been assessed in relation to net expenditure incurred by the States prior to 1 January 1974 using the method applied in previous years.

72

Transport of School Children

4.117 In assessing needs for costs associated with the transport of school children for 1972-73, the Commission used actual school enrolment figures of the claimant States. For South Australia the Commission took as its standard for comparison expenditure per pupil by Victoria only, on the ground that New South

Wales would experience difficulties in this area of expenditure which would not be present to the same degree in South Australia.

4.118 As stated in paragraph 4.134 of its 41st Report (1974), the Com­ mission has decided that Queensland experiences special difficulties in the transport of school children in remote areas of the State. For 1972-73 the Commission deter­ mined an allowance for Queensland’s special difficulties by a slightly modified

version of the method suggested by Queensland in its submission of December 1973. The method involved classification of the populations of Queensland and the standard States into three categories of population density (using population statistics for local authority areas), and the calculation of a notional distribution of

Queensland’s population into the three categories based on a standard percentage distribution derived from the average of New South Wales and Victoria. A notional distribution of the Queensland pupil numbers into the three categories

was then obtained by applying the relevant pupil-population ratios to the notionally distributed Queensland population in order to allow for the fact that the propor­ tion of pupils to total population is considerably lower in the sparsely settled areas of the State. A notional standard total cost was then calculated by applying to the notional pupil distribution the actual average cost per pupil of the transport

services in the relevant areas. The excess of the actual total cost in Queensland over this notional standard total cost was taken as the measure of the State’s special difficulties. The Commission considered that this method gave a reasonable assessment of the difficulties in the absence of data relating to the remote areas of

the standard States.

4.119 At the Brisbane Hearings in December 1974, Queensland made another submission in support of a claim for special difficulties. This submission accepted the method adopted by the Commission for calculating the allowance for 1972-73. This method was followed because it was still not possible to obtain information

about the numbers of children and the costs of school transport in remote areas of the standard States.

4.120 At the Adelaide Hearings in February 1975, the South Australian Education Department in its submission claimed that it was ‘disadvantaged in at least two respects compared with the standard States in the matter of transport of school children’. These disadvantages were said to arise from the less generous criteria for eligibility for school transport in South Australia compared with the standard States, and the fact that a majority of school buses in South Australia

are owned by the Education Department and driven by teachers whereas private contractors are employed in the standard States. The Commission considers these aspects to be differences in State policy; as such they should not have any effect on needs. However, the needs would be affected by any natural advantages

or disadvantages that South Australia might have by comparison with the standard States.

4.121 In assessing the claimant States’ needs in this area for 1973-74, the Commission has decided that its comparisons of expenditure should be based on the notional number of enrolments as used in the comparisons of expenditure

73

on education. It has decided to use notional numbers because it considers that they largely remove any effects of the differing State policies on school attendance. For Queensland the Commission has also assessed an allowance for special difficulties. The allowance was calculated by the method used for 1972-73 and described in paragraph 4.118 above.

4.122 For South Australia, the Commission has decided that its comparison of expenditure in this field should be based on a two-State standard. However, it still considers that New South Wales would experience difficulties, arising from the nature of the terrain and its effects on the operating costs of motor vehicles, which would not be present to the same degree in South Australia. In the absence of adequate data to enable the effects of these natural advantages to be quantified, the Commission, on the basis of broad judgment, has assessed the South Australian needs in the field of transport of school children as zero.

School Medical and Dental Services

4.123 In previous years the Commission has used total actual school enrol­ ments as the basis for comparing claimant State expenditure in these areas with that of the standard States. For 1973-74 the Commission has decided that its comparisons of expenditure should be based on the notional number of enrolments as used in the comparisons of expenditure on education. The Commission has decided to use notional numbers because it considers that they largely remove any effects of the differing State policies on school enrolments.

Libraries, Museums, Art Galleries and Other Cultural Activities

4.124 In recent years the Commission has made its comparisons for this area of expenditure on a per capita basis. In 1966-67, the last year for which a detailed examination of the Western Australian accounts was made, the Commission made an allowance for that State of 29 per cent for special difficulties in this area of expenditure. At the Adelaide Hearings in February 1974, South Australia sub­ mitted that it experienced special difficulties in providing for libraries, museums and other cultural activities. The Commission accepted the general proposition that there were comparative economies of scale in providing central library facilities, particularly reference services, in the standard States. However, it was unable to measure this factor with any precision. For 1972-73 it determined, on the basis of broad judgment, an allowance for special difficulties for both claimant States of 10 per cent of the standard per capita cost.

4.125 At the Brisbane Hearings in December 1974, Queensland presented a submission in support of a claim for an allowance for special difficulties encoun­ tered in the provision of library services. The submission attempted to quantify the special difficulties by comparing the notional cost per capita in New South Wales, Victoria and Queensland of providing a public library service at the interim minimum standards determined by the Library Association of Australia. These notional costs were then reduced to allow for the fact that the actual level of

service in the standard States is below that recommended in the interim minimum standards. Comparisons were made of the notional expenditure on books, periodicals, building maintenance and staff salaries. The submission also suggested a separate comparison for the State reference libraries based on items held per capita.

74

4.126 In its submission at the Adelaide Hearings in February 1975, South Australia referred to its claim for an allowance for special difficulties for libraries and suggested: ‘The Commission may find that it is unable to compare directly the South

Australian system and the systems operating in the standard States. In that eventuality, it may be possible to establish for each State an “ideal” standard of service appropriate to the recommendations of the Library Association of Australia and to compare the actual levels of service provided with those

standards. If, for instance, both the standard States and South Australia were adjudged to be providing a service which was equivalent to about 75 per cent of the “ideal” in each State, but the cost per capita in South Australia was

higher, then the extra cost incurred would be a measure of our assessed need. To the extent that the Commission considered the cost in any State could be reduced without affecting the standard of service (by more or less centralization, for example), it would, of course, amend its assessment of need.’

4.127 The Australian Treasury, in its submission at the Canberra Hearings in April 1975, indicated general agreement with the Queensland case for a dis­ ability allowance for public lending library services, but expressed reservations about the claim in respect of the central reference services. However, the Treasury

did accept the general proposition that per capita expenditure on the reference services needs to be higher in the less populous States.

4.128 For 1973-74 the Commission has attempted to apply the method suggested by Queensland, but the lack of necessary information in respect of the standard States has prevented a precise assessment of the special difficulties. The available information did indicate, however, that the allowance for special diffi­ culties assessed for Queensland in 1972-73 should be revised. Accordingly, for

1973-74 the Commission has determined for Queensland, on the basis of broad judgment, an allowance for special difficulties of 15 per cent of the standard per capita cost for libraries, museums, art galleries and other cultural activities. As no revision to the allowance for South Australia was indicated, the Commission

has decided, on the basis of broad judgment, to leave the allowance for that State unchanged at 10 per cent of the standard per capita cost for 1973-74.

Hospital Expenditure

4.129 A brief account of the methods used by the Commission during earlier years in its comparisons of State Government expenditure on hospitals, nursing homes and mental health, and of recent arguments put to the Commission by the claimant States and the Australian Treasury, was given in the 39th Report (1972),

paragraphs 4.34 to 4.43, and the 40th Report (1973), paragraphs 4.40 to 4.46.

4.130 Since 1970-71, the Commission has used a per capita basis of comparison for hospitals, nursing homes and mental health. In the case of Queensland, the Commission has made an allowance for special difficulties encountered in the provision of hospital facilities in that State.

4.131 At the Brisbane Hearings in December 1974, Queensland made another submission to the Commission in support of a claim for special difficulties. As was the case in the submission made for 1972-73, the claim related to the operating costs of hospitals (excluding nursing homes) and outpatient centres situated more

than 640 kilometres (400 miles) from Brisbane, to building maintenance costs resulting from remoteness and to the operating and maintenance costs of the State’s Flying Surgeon service. The 1973-74 claim also covered the additional cost

75

arising from the accelerated depreciation of buildings associated with extreme climatic conditions, the additional operating costs of the Flying Doctor Service in Queensland and the additional operating costs of the Queensland Ambulance Transport Brigade.

4.132 In considering that part of the submission which related to hospitals with an average daily occupancy of up to 25 beds which are situated more than 640 kilometres from Brisbane, the Commission has varied the approach that was adopted in 1971-72 and 1972-73. In those years the Commission determined a percentage disability based on a comparison of the weighted daily average cost per inpatient. For 1973-74 the Commission has determined separate disability per­ centages for inpatient, outpatient and dental patient costs. Hospitals located on Aboriginal reserves have been excluded from the comparison and dealt with as part of the Commission’s assessment of the State’s need for expenditure on Abor­ igines (see paragraphs 4.142 to 4.146).

4.133 On the basis of its evaluation of the evidence, the Commission has determined allowances for special difficulties in recognition of the higher operating and maintenance costs of hospitals with an occupancy of up to 25 beds situated more than 640 kilometres from Brisbane. These were 9 per cent for inpatients,

14 per cent for outpatients and 8 per cent for dental patients. The operating costs of outpatients centres were included in the outpatients section of the above com­ parisons. For hospitals located more than 640 kilometres from Brisbane with more than 25 bed occupancy, an allowance was made for higher building mainten­ ance costs. This was determined by applying to standard building maintenance expenditures a building maintenance index compiled by the Queensland Depart­ ment of Works. For remote area hospitals having less than 25 bed occupancy, the Commission has also accepted in principle the claim for an allowance for the accelerated depreciation of buildings associated with climatic conditions. In the absence of adequate data this allowance has been determined on the basis of broad judgment. The Commission has accepted the total cost of operating the Flying Surgeon service as a measure of special difficulties and has assessed allowances for the additional costs of operating the Royal Flying Doctor Service in Queens­ land and the Queensland Ambulance Transport Brigade. A positive expenditure

need for Queensland has been assessed as the sum of these allowances.

4.134 As no application for an allowance for special difficulties in the provision of hospital services was received from South Australia, the expenditure need of that State for hospitals for 1973-74 has been assessed as zero.

4.135 Because no evidence was received about special difficulties in relation to nursing homes and mental health services, expenditure needs for the two claimant States in these areas also have been assessed as zero.

Police 4.136 As indicated in paragraph 4.136 of its 41st Report, the Commission has accepted that Queensland has special difficulties in providing police services, especially in remote areas. For 1972-73 the Commission made an allowance of $597,000 for higher costs in remote areas, covering salaries of officers serving in these areas, transfer expenses, locality allowance payments, overtime and allow­ ances in lieu, administration expenses, repair and maintenance of police buildings and above-standard costs of operating and maintaining police vehicles.

4.137 At the Brisbane Hearings in December 1974, Queensland presented a further submission claiming additional allowances for the items mentioned above,

76

and an allowance in respect of the extra number of police vehicles needed to police the remote area of the State. The Commission has examined Queensland’s claim and obtained additional information. During the last two years it has also inspected several areas in the remote part of the State. These factors have enabled

the Commission to make a more satisfactory assessment of the extent of Queens­ land’s difficulties in these areas. For 1973-74, the Commission has determined an allowance of $1,030,000 for special difficulties. This covers, in addition to the allowances mentioned in the preceding paragraph, the extra cost of the above­

standard number of police vehicles required in the remote area of Queensland.

Gaols 4.138 For the year of review 1972-73 the Commission used the number of prisoners as the unit of comparison for expenditure on gaols. At the Canberra Hearings in April 1975, the Australian Treasury repeated the point it had made in

a number of earlier submissions. The Treasury argued that, while the Commission’s use of the number of prisoners as the unit of comparison ‘takes account of any “environmental” factors which may increase the ratio of prisoners to the popula­ tion and thereby increase the need of a State, it carries with it, of course, the danger that differences in numbers of prisoners due to differences in State policy would

be assumed (incorrectly) to be due to such “ environmental” factors’.

4.139 As no evidence has been presented to indicate that the ratio of prisoners to population is influenced by differences between the States in policy or practice, the Commission has decided to continue to use the number of prisoners as the unit of comparison in this area. For 1973-74 it has assessed a positive need for

Queensland and a negative need for South Australia.

Building Maintenance

4.140 In previous years Queensland has made a number of claims for allow­ ances for special difficulties arising from the higher building maintenance costs in the remote areas of the State. These claims have been included in submissions on allowances for special difficulties presented by the Education, Health and Police

Departments and, in general, have been accepted by the Commission.

4.141 For 1973-74 similar claims have been received from these departments and the Commission has assessed allowances for special difficulties in these areas using its normal methods. A claim was also received, as part of a special sub­ mission on libraries, for the higher building maintenance costs of libraries in remote

areas. The Commission’s decision on this claim is referred to in paragraph 4.128. In addition to the above, Queensland has submitted for 1973-74 a claim for the higher building maintenance costs associated with other buildings located in remote areas of the State. The buildings concerned accommodated activities in the social services field which were not included in the claims referred to above, such

as court houses, children’s institutions and gaols. The Commission has considered this additional claim and has assessed an allowance for special difficulties for 1973-74, using similar methods to those adopted in calculating the disabilities for schools, hospitals and police buildings in the remote areas of the State.

Expenditure on Aborigines 4.142 Prior to 1972-73 it was the Commission’s practice to include all identi­ fiable expenditure on Aborigines in the field of miscellaneous expenditure. The Commission therefore implicitly assessed a claimant State’s need by reference to

77

the difference between its per capita expenditure and that of the standard States (positive or negative as the case may be). This treatment was not always consistent because, while most States follow a policy of making functional departments responsible for services to Aborigines, in Queensland the Department of Aboriginal and Islanders Advancement is partly responsible for providing services on the Aboriginal reserves. All expenditure by the Department of Aboriginal and Islanders Advancement was included in the field of miscellaneous expenditure, whereas much of the comparable expenditure in the standard States, which is incurred by functional departments and is not identifiable as expenditure on Aborigines, was included in social services expenditure.

4.143 For 1972-73 the Commission decided to change its approach and adopted the following procedures. For Queensland, the expenditure by the Depart­ ment of Aboriginal and Islanders Advancement was classified by function and a standard amount of expenditure determined for each functional group. The standard amount of expenditure in each case was the product of the unit cost of providing the service in the standard States for the whole of their populations, including Aborigines, and the number of units in Queensland. In the standard States the unit cost was determined on a per capita basis for all services except education, where a per pupil basis was used. For Queensland the unit used was the number of Aborigines living on reserves except for education, where the number of pupils on reserves was used. The standard amounts of expenditure were included in Queensland’s social services expenditure for 1972-73. The difference between the total of the amounts so included and the total expenditure of the Department of Aboriginal and Islanders Advancement was assessed by the Commission as an allowance for the additional cost incurred by Queensland on its larger Aboriginal population. For South Australia a similar procedure was adopted, except that data limitations prevented the identifiable expenditure on Aborigines being classified by function. The standard amount of expenditure was taken as the product of the number of Aborigines living on reserves in South Australia and the per capita cost of providing all social services except primary education and

O ther Public Health’ in the standard States.

4.144 In a submission subsequent to the Brisbane Hearings in December 1974, Queensland advised that, in addition to the expenditure of the Department of Aboriginal and Islanders Advancement, it incurred other expenditure on Aborigines which was met by the functional departments. It provided details of this expenditure, classified by function, and requested that it be included in the calculation of the allowance to be determined by the Commission as a measure of the special needs for Aborigines.

4.145 South Australia, in its submission at the Adelaide Hearings in February 1975, stated that ‘we regard the Commission’s general approach to this question as wholly appropriate’. However, it suggested that ‘all the expenditure incurred by South Australia in administering its reserves be accepted by the Commission as a measure of special need with the exception of an amount calculated as the product of the reserve population and the standard per capita expenditure in the classifications “Relief of the Aged, etc.” and “Child Welfare” ’, which should be included in social services expenditure. It maintained that the expenditure incurred in providing social services for Aborigines in South Australia in other than these two classifications is met by the functional departments, and is already included in social services expenditure.

78

4.146 In assessing the special needs for expenditure on Aborigines for 1973-74, the Commission has followed a procedure similar to that adopted for 1972-73. In doing so, however, it has accepted the submissions of both claimant States and amended its calculations accordingly. For Queensland the expenditure incurred by

the functional departments has been taken into consideration. The special needs for that State have been assessed as the difference between the total of such expenditure plus that incurred by the Department of Aboriginal and Islanders Advancement, and the amounts to be included in social services expenditure as

determined by the procedure outlined in paragraph 4.143. For South Australia the special needs were assessed as the difference between the expenditure incurred by that State in administering its Aboriginal reserves, less the expenditure on the Davenport aged persons’ home, and the product of the reserve population and the

standard per capita expenditure in the classifications ‘Relief of the Aged, Indigent and Infirm’ and ‘Child Welfare’.

B u s i n e s s U n d e r t a k in g s

The General Approach

4.147 Comparison of the impact of State government business undertakings on State budgetary accounts has presented many difficulties because of differences between States in the form in which the undertakings are constituted, the conditions under which they operate, and the extent to which their operations are brought

within the budgetary accounts of the several States. These difficulties are increased because much of the data needed for interstate comparisons is not available. In its recent Reports the Commission has summarised discussions concerning the way in which it should deal with the operations and finances of these under­

takings {see paragraphs 4.151 to4.155 of the 41st Report (1974)).

4.148 The Commission’s general approach has been to use one of two methods for each type of undertaking, the choice of method depending upon what it regards as the most common practice among the States in the treatment of the undertaking and upon the availability of the relevant data.

4.149 Comparison of Modified Budgetary Impact. One method is to take the operations of the undertakings in the claimant and the standard States into account in the Commission’s assessment of need. Under this method, the Com­ mission assesses the net impact of the undertakings in question on the finances of

the respective States, making modifications with a view to eliminating from its comparisons the effects of any differences between the claimant and the standard States in policies affecting such revenue or cost elements as levels of charges, wage costs including various service and incremental payment schemes, depreciation

and debt charges. The modifications are made as far as possible by reference to the average practices of the standard States. The assessed need, which may be either positive or negative, is equal to the claimant State’s population multiplied by the difference in per capita modified budgetary impact as between the claimant

State and the standard States.

4.150 Exclusion of Budgetary Impact. The second method is to exclude the operations of the undertakings from the Commission’s assessment of need. Under this method, the Commission makes any modifications which may be necessary to ensure that its assessments of need in other fields of revenue or expenditure

are not affected in any way by the finances of the undertakings in question. The effect of the exclusion is implicitly to assess zero needs for the claimant States in relation to the operations of these undertakings.

79

4.151 In accordance with the general approach set out in paragraphs 4.147 to 4.150 the Commission has, as in previous years, adopted modifications to the budgetary accounts of the States for the purpose of excluding from its comparisons all revenue and expenditure relating to metropolitan water, sewerage and drainage, harbours, housing, electricity and gas1, road finance and slum clearance, and including the operations of railway and metropolitan transport undertakings.1 2

4.152 For 1973-74 the Commission has decided again to exclude the effect of forestry operations, except for interest charges relating to debt incurred in the ten years prior to 1973-74. In addition, for 1973-74 the Commission has decided to modify from State budgetary accounts the impact of subsidies and payments to, and contributions from, undertakings operating outside the budgets, where the transactions can be identified. These modifications relate to State and local government enterprises such as insurance offices, banks, brick works,

abattoirs, cold storage facilities, dock and crane facilities, gas works, coke works and mineral treatment works.

4.153 In determining these modifications, allowance has been made for certain unrecovered debt charges. (A discussion of the Commission’s general approach to the treatment of debt charges is given in paragraphs 4.166 to 4.169 of this Report.) In making comparisons of the net results of State transport undertakings, referred to in paragraph 4.151, the Commission continues to be handicapped by lack of information. It understands the difficulties involved in the collection of the additional data required, but in the absence of such information the assessment of needs in this field must continue to be somewhat arbitrary. Further comments on the budgetary impact of business undertakings are included in Appendix H of this Report.

Railways

4.154 As indicated in paragraphs 4.149 and 4.151, the Commission assesses railway needs by comparing the modified budgetary impact of railway operations in the claimant and the standard States. The modifications take account of the effects of differences in policies affecting fares, freight charges, wages costs, depreci­ ation and debt charges. Depreciation has been the main item of modification which has been the subject of discussion in recent years.

4.155 The Commission’s method of assessing modifications for railway depreciation is first to estimate the depreciation charged directly or indirectly in the budgetary accounts of the standard and the claimant States. This is taken as the sum of direct budget appropriations and indirect costs arising from sinking fund operations relating to the loan liabilities of each State’s railways (including the Australian Government’s sinking fund contributions). The Commission then compares the depreciation cost for each State with a notional standard deprecia­ tion, assessed by applying the Victorian Railways schedule of depreciation rates to the State’s railway assets. The difference arising from this comparison

1 This does not apply completely to statutory corporation payments. For 1973-74 the pay­ ments by the electricity authorities and by the Gas and Fuel C orporation in Victoria have been treated as payments of taxes. Thus they have been retained w ithin the respec­ tive States’ budgetary accounts and taken into consideration in the assessment of revenue needs. 2 This does not apply to the transport undertaking operated by the Brisbane City Council.

See Appendix H, paragraph H.17.

80

for each claimant State is then compared with the average difference for the standard States as the basis for the modification. For example, if in both the standard and the claimant States the sum of the direct budget appropriations and the indirect costs arising from sinking fund operations falls short of the deprecia­ tion assessed by applying the Victorian Railways schedule, and the per capita

amount of this shortfall in a claimant State exceeds the average for the standard States, the excess is taken to be the result of below-standard budget appropriations or indirect sinking fund costs (or both). The amount of the excess, multiplied by

the population of the claimant State, becomes a modification increasing the budgetary cost of railway operations in that State. Using this method of com­ parison for 1972-73, the Commission concluded that South Australia had made

below-standard charges for railway depreciation. For Queensland the information provided by the State, particularly that relating to the distribution of assets by type and value, was inadequate for an assessment of its railway depreciation. The Commission considered that its approach required further examination and discus­

sion. During the year it distributed the working papers on the matter and invited further submissions from the interested parties.

4.156 In its submission at the Adelaide Hearings in February 1975, South Australia claimed that aspects of the Commission’s method may not give a result which is equitable for the claimant States. The claim was made by South Australia in the following terms:

‘A s ex p lain ed in the w o rk in g p a p e rs circu lated by th e C om m ission the

ra tio n a le of th e m e th o d is to reg ard th e to ta l o p eratio n s o f th e sinking fu n d as

being in the n a tu re o f d ep reciatio n in th a t th ey pro v id e fo r re p ay m en t o f loan

liability w hich has been used to p u rch ase railw ay assets an d so en ab le the

railw ays to raise n ew loans w hich m ay be used to assist in the p u rc h a se of

rep la c e m e n t assets. G iv en this assu m p tio n ab o u t the n a tu re o f the sinking

fu n d co n trib u tio n s the ap p ro a c h ad o p ted by th e C om m ission ap p ears to be

reaso n ab le. If w h a t a c laim an t S tate is p ro v id in g fo r dep reciatio n falls short

o f w h a t it sh o u ld be p ro v id in g to a g reater e x ten t th a n any sh o rtfall in the

sta n d a rd States, th e n in term s o f this a p p ro ach , it has a positive need.

‘In passing, w e p o in t o u t th a t the C om m ission’s m eth o d o f calc u latin g the

a m o u n t of sinking fu n d attrib u tab le to railw ay assets gives a w eighting w hich

varies w ith th e age o f th e assets. T h u s, the older the assets, the g reater have

been th e p ast co n trib u tio n s to the sinking fu n d a ttrib u ted to railw ays an d the

g reater the volum e o f securities cancelled because o f these co n trib u tio n s. T he

g reater the value o f cancelled securities, th e g reater the co n trib u tio n in the

c u rre n t y ear arising fro m the re q u ire m e n t to pay 41 p er cen t o f th is value

into th e sinking fund. F o r a given value o f railw ay assets, th erefo re, the

attrib u te d co n trib u tio n to the sinking fu n d will be g reater th e o ld er are the

assets. Since th e age of the assets w ill presu m ab ly n o t affect the dep reciatio n

ch arg ed in acco rd an ce w ith the V ic to ria n schedule, the difference (s h o rtfa ll)

betw een the sinking fu n d c o n trib u tio n and the d ep reciatio n calcu lated fro m this schedule will dim inish, the o ld er a re the assets. W ith o th e r things equal,

th erefo re, th e calc u latio n o f a claim an t S tate’s needs in railw ay o p eratio n

co u ld b e affected solely by th e age o f its assets relative to th o se of th e sta n d a rd

States. I t seem s to us th a t this m ay n o t be en tirely equitable.

‘W e p o in t o u t also th a t th e sinking fu n d c o n trib u tio n in resp ect o f a given

asset value w ill be th e sam e regardless o f the life expectancy of the asset. On

th e o th e r h a n d the d ep reciatio n ch arg ed in acco rd an ce w ith the V icto rian

schedule w ill be g reater th e sh o rter th e life ex p ectan cy of th e asset. T h erefo re,

the difference betw een th e tw o, fo r a given asset value, w ill be g reater, the

s h o rte r the life expectancy o f th e assets. T hus, a claim an t S ta te ’s calcu lated need

81

to provide for depreciation will also be greater the shorter the expected life of its assets.’ 4.157 The submission went on to state that, leaving aside the question of methodology, the State did not agree with the rationale of the approach in that it looked only at railways. It repeated the claim made in earlier submissions (see paragraph 4.131 of the 40th Report (1973)) that a State had no obligation to provide for depreciation in excess of its statutory sinking fund contributions and

that, to the extent that it did, the excess provision should be excluded from the Commission’s consideration in assessing needs. However, the submission pointed out that amendments to the sinking fund provisions of the Financial Agreement were imminent and that these would require the Commission to reconsider its approach in the future. It stated that in view of this, and considering that the present method gave South Australia a rough measure of need in the area, it did not wish to press its arguments.

4.158 In its submission at the Canberra Hearings in April 1975, the Australian Treasury stated: ‘While obviously the method is an imperfect one we see no objections to it as the best available in the circumstances.’

4.159 The Commission accepts South Australia’s argument that differences in amounts of the modifications calculated for railway depreciation by the Com­ mission’s method could arise for the reasons advanced by South Australia. How­ ever, it considers that the State did not demonstrate that these differences would not be offset as the result of consequential changes in the assessment of needs for other debt charges. For 1973-74, the Commission has again calculated modifica­ tions for railway depreciation by the method described in paragraph 4.155 above.

4.160 During the year Queensland provided the Commission with more detailed information about the State’s railway assets. For 1973-74 the Commission therefore used the method described in paragraph 4.155 above to calculate the modifications for railway depreciation for the purpose of assessing the needs of both claimant States in this area.

Country Water Supplies, Sewerage, Irrigation and Drainage

4.161 In its 41st Report (1974), paragraph 4.16, the Commission rejected South Australia’s claim that the budgetary cost of the South-Eastern Drainage Scheme should not be modified from the expenditure used to assess the State’s need for country water, sewerage, irrigation and drainage. In its submission at the Adelaide Hearings in February 1975, South Australia again claimed that

no modification should be made for this item. The submission also drew attention to the Commission’s assessment of the State’s need for ‘Country water supply’, as shown in Table 6, Chapter 5 of the Report, which showed an assessment of nega­ tive need of $1.11 per head of the State’s population. The submission compared this figure with the data shown in Table 7, Appendix H of the Report, which indicated an above-standard expenditure on Country Water Supplies, etc., by South Australia, which would result in positive needs. It stated that a conflict appeared to arise from a difference in the classification of two expenditure items; debt charges and subsidies to local governing bodies appeared to be excluded from the figures in Table 6, Chapter 5 but included in those of Table 7, Appendix H. It suggested that the presentation shown in the latter table should be used in both tables.

4.162 In its claim for the inclusion of its expenditure on the South-Eastern Drainage Scheme in the assessment of needs for country water supplies, etc., South

82

Australia drew the Commission’s attention to the fact that expenditure by all States on irrigation is included in the assessment of need. It claimed that the South-Eastern Drainage Scheme operated to achieve the same ultimate results as irrigation schemes and should, therefore, not be excluded from the Commission’s

assessment of a claimant State’s needs. The argument was stated as follows: ‘I t seem s to us th a t th ere is a d irect p arallel betw een th e S o u th -E astern d ra in ­

age schem e and irrig atio n w orks. B oth are designed to in crease th e a re a and

p ro d u ctiv ity o f la n d available fo r farm in g , one by th e supply o f w ater an d th e

o th e r by th e low ering o f th e w ater table. B oth are p artly financed by user

charges b u t hav e a substantial im p act o n S tate finances. T h e difference com es

in th e ir tre a tm e n t by th e C om m ission. T h e S o u th -E astern d rain ag e sch em e is

m odified from th e South A u stralian B udget w hile irrigation schem es in b o th

S o u th A u stra lia an d the sta n d ard S tates are accepted as a charg e against

S tate finances. W e agree w ith the statem en t m ad e by th e C om m ission in

p a ra g ra p h 4.154 o f th e F o rty -F irst R e p o rt th a t “ although irrig atio n schem es

are at least p a rtly financed by u ser charges, th eir classification as an econom ic

service w o u ld be in acc u rate an d w ould n o t ju stify th eir m o d ificatio n fro m

States’ b u d g ets” . W e subm it, m o reo v er, th a t precisely the sam e arg u m en t

applies to the S o u th -E astern d rain ag e sch em e.’

4.163 In its submission at the Canberra Hearings in April 1975, the Australian Treasury stated that it was inclined to agree with South Australia’s argument about the similarity of the expenditures on irrigation and on drainage. It suggested, therefore, that in its view the Commission ‘might well obtain consistency by

excluding all these expenditures from its assessments’. It pointed out that such an approach could be justified by reference to the distinction between ‘public’ and ‘economic’ services referred to in paragraph 160 to 168 of its April 1974 submission (see paragraph 4.153 of the 41st Report (1974)). The submission

referred to the statement of the Commission in paragraph 4.154 of its 41st Report (1974) concerning the Australian Treasury’s proposed classification of business undertakings into ‘public’ and ‘economic’ (briefly referred to by the South Australian submission in paragraph 4.162 above). It commented that this did not

do justice to the Australian Treasury’s views and added:

‘W e w ould argue th a t the practice o f th e States in relatio n to th e charg in g fo r

v arious services should n o t necessarily be an over-riding fa c to r in d eterm in in g w h eth er such services should be classified as “p u b lic" o r “eco n o m ic" fo r the

purp o ses of assessing ap p ro p riate relativities betw een the S tates in am ounts

o f A ustralian G o v e rn m e n t assistance. T hus, in th e case o f irrig atio n , we

believe th a t th ere could well be grounds fo r reg ard in g it as an “e co n o m ic”

service (a n d th u s not ap p ro p riately ta k e n into acco u n t in assessing am o u n ts

o f “eq u alisatio n ” assistance) n o tw ith stan d in g the fact th a t th e States choose to subsidise these services fro m th eir b udgets.’

It concluded that the above statement was only a brief outline of a very complex and difficult topic and suggested that the matter warranted further consideration by the Commission.

4.164 The Commission has considered the arguments put forward concerning the comparability of the South-Eastern Drainage Scheme with irrigation schemes. It agrees that the ultimate purpose of both such types of undertakings is to extend the usage and to improve the productivity of the land concerned. The Commission has decided to include the financial transactions of the South-Eastern Drainage Scheme in its comparisons of country water supplies, sewerage, irrigation and

drainage. In making these comparisons, the Commission has decided to compare the user charges for the South-Eastern Drainage Scheme and irrigation schemes in

83

South Australia with irrigation charges in the standard States. These comparisons have shown the drainage scheme’s charges to be below standard. The Commis­ sion has decided, for 1973-74, to include the deficit of the South-Eastern Drainage Scheme in the expenditure used to assess South Australia’s needs for country water supplies, sewerage, irrigation and drainage, subject to a reduction of $363,000 to take account of below-standard user charges.

4.165 The Commission has taken note of South Australia’s comments con­ cerning the classification of debt charges and subsidies to local governing bodies (see paragraph 4.161). Because of differences among the States in methods of providing these services (see Appendix H, paragraphs H.25 to H.31), it is difficult to obtain precise details of all subsidies in State budgets which relate to the provision of water supplies, etc. The Commission assesses the claimant States’ needs for all the items concerned on the same basis, i.e., by multiplying each claimant State’s population by the difference between its modified per capita expenditure and that of the standard States. Previously no transfers of estimates of the subsidies were made in assessing needs in these areas. However, in order to avoid any misunderstanding in this regard, for purposes of assessing the claimant States’ needs in this area for 1973-74 the Commission has transferred estimates of expenditure items for unrecouped debt charges and subsidies for water supplies, etc., included in all States’ budgets. The transfers have been based on the estimates used to arrive at the budgetary costs shown in Table H-7 of this Report. Accordingly, there is now no conflict in the needs indicated by the figures in that table and those shown in Table 5-5 of this Report.

D e b t C h a r g e s

The General Approach

4.166 The general approach which the Commission has adopted in its treat­ ment of debt charges is to exclude any unrecouped debt charges attributable to a particular activity which it excludes from its assessment of needs. For other debt charges it intends that, where it judges that their impact on the budget of a claimant State differs from that of the standard States as a result of variations in policy, it will exclude the effect of that difference from its assessment of the claimant State’s financial need. In forming its judgment the Commission will compare the revenue-raising efforts and the levels of services in the claimant and the standard States and the various sources of capital funds available to them and their alternative uses. This means that, in general, that portion of debt charges attributed to below-standard revenue effort or above-standard expenditure by a claimant State will be excluded from the Commission’s assessment of need, except to the extent that it judges that these shortfalls of revenue or excesses of expenditure were financed by a reduction in other non-revenue-producing loan expenditures of the State, which would have imposed a cost to the budget. Where the reduction in loan expenditure is considered to relate to assets for which there would be a partial recovery of debt charges, the exclusion will be on a proportionate basis. However, the Commission will use broad judgment in deciding the extent to which the different policies and practices of the States have led to different levels of unrecouped debt charges. These matters were referred to in paragraph 4.173 of the 41st Report (1974).

4.167 South Australia, in its submission at the Adelaide Hearings in February 1975, stated that it had noted the Commission’s intended general approach to the

84

treatment of debt charges and added that in past submissions it had ‘maintained that an exercise of judgment is the only way in which the Commission will be able to do justice in this area’. The submission went on to state that at some time in the future the State may question the manner in which the Commission may be

exercising its judgment in particular areas. However, South Australia indicated that it was in substantial agreement with the approach set out in paragraph 4.173 of the 41st Report (1974).

4.168 The Australian Treasury, in its submission at the Canberra Hearings in April 1975, stated that it was unable to add to its previous submissions on this matter. The Commission has summarised and discussed these submissions in previous Reports.

4.169 In accordance with the general approach outlined in paragraph 4.166, for 1973-74 the Commission, in making modifications for particular items of revenue or expenditure, has taken into account the associated debt charges. How­ ever, there remains a large area of unrecouped debt charges expenditure for which

data are not available to enable the general approach indicated above to be adopted. For the time being the Commission intends to continue its past practice of assessing a claimant State’s need in this area as the difference between its modified per capita expenditure and the average of the modified per capita

expenditures of the standard States, multiplied by the claimant State’s population.

M is c e l l a n e o u s R e v e n u e a n d E x p e n d it u r e

4.170 As indicated in other sections of this Report, the Commission is seeking to extend the scope and accuracy of its detailed comparisons of State budgets. However, there remain large areas of revenue and expenditure for which it has not been possible to make precise statistical calculations. These areas include such

items as receipts for services rendered, general miscellaneous receipts, general costs of government administration, certain unrecouped debt charges and gross expenditure on various departments such as Agriculture, Mining and Lands and Surveys. In accordance with the procedure for modifying the budgetary accounts

of the States for purposes of comparability (see paragraph 3.22), the Commission modifies several of these items of revenue and expenditure. Some of the items are the subject of modification each year and the details are included in the working papers distributed annually to the interested parties. New modifications

and others which have been the subject of discussion during the year are com­ mented upon in later sections of this chapter (see paragraphs 4.178 to 4.196).

4.171 A summary of miscellaneous expenditure is shown in Table 4-1 on the following pages. Most of the figures in the table show gross expenditure. There is double counting where one department charges another for services provided. Differences between States in per capita expenditures may reflect different require­

ments arising from economic or other factors, but they may also reflect differences in State policies (resulting in differences in the range and quality of the services provided) or in the efficiency with which the services are operated. In any case the figures in Table 4-1 may not be directly comparable as between States because

State departments bearing similar titles may have different functions. In addition, differences in accounting practices between the States may cause difficulties in the ready identification of certain items of expenditure in the various departments.

4.172 The format of Table 4-1 for 1973-74 is similar to that for 1972-73, in accordance with the Commission’s aim of compiling these items on a similar basis

85

Tahle 4-1 - FIELD 0 F MISCELLANEOUS c o n s o l i d a t e d r e v e n u e f u n d e x p e n d i t u r e a n d u n r e c o u p f d d e b t CHARGES, ALL STATES, 1973-74

Legislation . . .

Taxation . . .

Overseas representation . Public Service Board . Superannuation Board . Stores and Tender. .

Registrar of Co-operatives, etc. Auditor-General . . Tourist Bureau . .

Public Works . .

Labour and Industry . Local Government and Town Planning Industrial Development . Fisheries and Game . Conservation Lands . .

Mining .

Agriculture . Immigration. State Emergency and Civil Defence Ombudsman, Price Control and Con

Affairs . . .

Administration, n.e.i.— Rent Control . .

Premier .

Chief Secretary . . Treasurer . . .

Licenses Reduction Board Royal Mint . .

Observatory . ,

Housing . . .

Fuel and Power. . Other . . .

Sub Total .

New South Wales Victoria Queensland

Amount

Per Per Per

capita Amount capita Amount capita

$’000 $ $’000 $ $’000 $

7,078 1.49 4,548 1.26 3,246 1.67 7,130 1.51 3,518 0.97 2,825 1 .45 1,436 0.30 159 0.04 357 0.18 4,302 0.91 1,726 0.48 2,545 1.31 1,348 0.28 591 0.16 238 0.12 6,939 1.47 358 0.10 387 0.20 546 0.12 342 0.09 41 0.02 1,585 0.33 1,073 0.30 1,144 0.59 2,458 0.52 984 0.27 2,100 1.08 30,224 6,04810,1556.3812,7513.5211,5115.92 1.28 2.14 3,741 1,453 1.03 0.40 4,419 8,719 2.27 4.48 3,831 0.81 5,465 1 .51 2,002 1.03 1,950 0.41 1,705 0.47 637 0.33 4,023 0.85 2,615 0.72 1,375 0.71 12,519 2.64 10,588 2.93 9,644 4.96 5,438 1.15 12,833 3.55 5,946 3.06 30,887 6.52 16,974 4.69 16,744 8.61 308 0.07 137 0.04 319 0.16 940 0.20 100 0.03 71 0.04283 0.06 151 0.04 275 0.14241 0.05 132 0.04 1,910 0.40 1,156 0.32 1,182 0.61 1,074 0 23 3,292 0.91 15,536242 3.28 0.05 2,238 0.62 5,874 3.02 — — 13 80 0.02 — 192 0.04 92 0.03 383 0.08 108 0.03 404 0.09 16 502 0.26159,490 33.68 88,859 24.55 82,103 42.22 South Australia

Amount

$"000

3,259 1,266 232 2,183

287 878

590 1,160 7,863 1,639

1,580 875 597 784 4,040

3,653 7,247 240 37

494

122

1,277 360 3,073

29

43,765

Per capita

$

2.69 1.05 0.19 1.80 0.24 0.73

0.49 0.96 6.49 1.35

1.30 0.72 0.49 0.65

3.34 3.02 5.99 0.20 0.03

0.41

0.10 1.05 0.30 2.54

0.02

36.15

Western Australia

Amount

Per capita Amount Per capita

$'000 $ $’000 $

2,987 2.75 1,798 4.51

2,936 2.71 1,679 4.21

323 0.30 150 0.38

1,633 1.51 725 1.82

178 0.16 218 0.55

919 0.85 740 1.86

303 0.28

631 0.58 652 1.63

1,232 1.14 1,976 4.95

4,330 3.99 2,926 7.34

1,843 1.70 898 2.25

3,238 2.99 140 0.35

2,791 2.57 201 0.50

1,424 1.31 374 0.94

1,635 1.51 1

5,271 4.86 3,144 7.88

6,831 6.30 1,229 3.08

12,291 11.33 5,831 14.62

545 0.50 27 0.07

72 0.07 68 0.17

123 0.11 74 0.19

968 0.89 680 1.71

717 0.66 35 0.09

6,100 5.62 1,269 3.18

174 0.16

173 0.16

210 0.19 1,014 2.54

178 0.16 —

— 460 1.15

60,056 55.36 26,309 65.97

Tasmania

Table 4-1 — FIELD OF MISCELLANEOUS CONSOLIDATED REVENUE FUND EXPENDITURE AND UNRECOUPED DEBT CHARGES, ALL STATES, J973-74 — continued

South Australia Western Australia Tasmania

Amount

Pet-capita Amount Per capita Amount

Per capita

$‘000 $ $’000 $ $’000 $

4,933 4.07 5,341 4.92 2,935 7.36

704 0.58 849 0.78 — —

2,152 1.78 4,833 4.45 — —

— — — — 2,512 6.30

73 0.06 — — — —

1,104 0.91 — — — —

129 0.11 — — 123 0.31

411 0.34 156 0.14 601 1.51

109 0.09 41 0.04 — —

8 0.01 — — - —

1,700 1.57

551 0.45 — — 43 0.11

13 0.01 — — — —

— — — — — —

— — — — — —

— — — — — —

— — 300 0.28 — —

300 0.28 _ _

— — — — 62 0.15

— — — — — —

53,952 44.56 73,576 67.82 32,585 81.71

51,379 42.43 45,636 42.07 20,135 50.49

for a number of years so that changes in expenditure within the States from year to year may be compared. The table also provides a basis for interstate com­ parisons of the rates of change in various items and in total expenditure. Table 4-1 is again divided into two sections. The upper section contains items that are com­

parable between the States either directly or indirectly, and the lower section. O ther expenditure’, is subdivided into a number of separate categories that are clearly not comparable between the States. For 1973-74 the Commission has grouped together all expenditure relating to consumer affairs under the heading

Ombudsman, Price Control and Consumer Affairs’. This item has been trans­ ferred to the upper section of the table. The assessed expenditure needs for 1 9 7 3 - 7 4 (after modification) for selected items in Table 4-1 are shown in Table

5-6, Chapter 5.

4.173 The difficulty in making valid comparisons of expenditure in the miscellaneous field arises from the Commission’s inability to analyse differences in per capita expenditures according to whether they are attributable to unavoid­ able differences in relative costs of providing services (and therefore indicative of a need for financial assistance) or to differences in operating efficiency or in State policies affecting the range or quality of services (and therefore not eligible measures of need).

4.174 On the revenue side, comparisons are difficult because of the many differences between States in accounting practices. Much of the miscellaneous revenue relates to fees, charges for services, and other miscellaneous receipts, which vary between States as to the range of items covered. While some States include many of the items in consolidated revenue others may record the transactions in special deposit accounts and other funds which do not form part of the State’s revenue budget. Moreover, the revenue items may represent the reimbursement for services the costs of which are reflected in miscellaneous expenditure; but it is impracticable to identify the data necessary to match the two items or to compare the adequacy of the offsetting revenue as between States. Valid comparisons of miscellaneous revenue are also difficult because the Commission is unable to

distinguish between per capita differences attributable to unavoidable differences in revenue-raising potential and those arising from differences in State policies.

4.175 Except where the Commission can identify and allow for differences in revenues and expenditures arising from differences in State policies or in efficiency, the measure of a claimant State’s need in relation to these items is assumed to be the product of the claimant State’s population and the difference between its modified per capita revenue or expenditure and the average of the standard States’ modified per capita revenue or expenditure as the case may be.

4.176 The Commission maintains regular reviews of the trends in items in the miscellaneous field in the various States, and at the annual State hearings examines departmental officers of the claimant States regarding departmental func­ tions and expenditure trends.

4.177 After completing its examination of the miscellaneous revenue and expenditure items in the standard and claimant States’ budgets for 1973-74, the Commission has decided to adopt additional modifications or to vary its present treatment of modifications as detailed in the following paragraphs.

88

Australian Government Grants Towards Expenditure of a Capital Nature Applied Towards the 1973-74 Budget, New South Wales

4.178 In 1973-74 New South Wales applied an amount of $16m from its share of the interest-free capital grant to the States by the Australian Government towards meeting that State’s budgetary deficit for the year. In 1970-71, $15,903,000 of the grant for that year was used for a similar purpose (see paragraph 4.90 of

the 39th Report (1972)). For 1970-71 the Commission decided that the receipt was of a type not usually found in the Consolidated Revenue of a State and the amount was excluded from the receipts used to assess the claimant States’ revenue needs. For 1973-74 the Commission has adopted a similar procedure in relation

to the receipt of the $16m.

Special Advance of $10m by the Australian Government to Victoria, 1969-70

4.179 In its 41st Report (1974), paragraphs 4.5 to 4.7, the Commission sum­ marised the discussions on this item and on the advances to New South Wales in 1971-72 and 1972-73. In that Report the Commission indicated that it would include the repayment of the advances in the expenditures of New South Wales

and Victoria as appropriate to assess the needs of a claimant State. At the Brisbane Hearings in December 1974, Queensland repeated its claim that the Commission should adopt the opposite procedure and exclude the repayments from its com­ parisons. Queensland submitted that the Commission’s proposed procedure would

reduce the State’s assessed expenditure needs for the year of the repayment without the State having had a corresponding increase in the year of receipt of the advance by Victoria (namely 1969-70), as Queensland was not then a claimant State.

4.180 In its submission at the Canberra Hearings in April 1975, the Australian Treasury opposed the Queensland proposal. It argued that: ‘In d eterm in in g th e special grants in re sp ect o f 1974-75 th e C om m ission will

need to assess th e financial needs o f th e claim an t States in th a t year relative to

th e sta n d ard S tates. O ne o f the sta n d a rd States w ill have to in c u r an ex p en d itu re

to w h ich th ere w ill not be an eq u iv alen t in the claim an t States. It seem s to us

th a t it is a p p ro p riate th a t th a t be reg ard ed as a financial advan tag e o n th e p a rt

o f th e claim an t State, to be tak en into acco u n t by red u cin g th e special grants

below w hat th ey w ould otherw ise be. W h a t m ay o r m ay n o t have h appened

h ad th e p resen t claim an t States been th a t in 1969-70, seem s to us to be

irre le v a n t.’

4.181 The Commission agrees with the argument advanced by the Australian Treasury. It intends to treat Victoria’s repayment of the advance in 1974-75 as part of the State’s expenditure for the purpose of assessing the claimant States’ needs for that year.

Contribution to the Julius Dam Construction Fund, Queensland

4.182 This fund was established to record the Queensland Government’s financial transactions relating to the construction of the Julius Dam on the Leich­ hardt River to improve water supplies to the City of Mount Isa and Mount Isa Mines Ltd. In 1973-74 an amount of $2m was advanced to the fund from Con­

solidated Revenue pending the receipt of Australian Government loan funds for the project. Following the receipt of the loan funds the advance of $2m was repaid to Consolidated Revenue in 1974-75. In accordance with its usual procedures, the

89

Commission has excluded the $2m from the State’s expenditure used to calculate its expenditure needs for 1973-74. For 1974-75 the receipt of $2m will be excluded from the revenue used to assess its revenue needs for that year. In this way the special grants recommended by the Commission will not be affected by these transactions.

State Stores Board, Queensland

4.183 During its examination of the Auditor-General’s Report for 1973-74 at the Brisbane Flearings in December 1974, the Commission was advised that the operations of the State Stores Board covered the servicing of semi-governmental bodies which the Commission treats as being outside the State’s budgetary accounts for purposes of assessing financial needs. Further inquiries have shown that about 20 per cent of the Board’s administrative costs, which are a charge to Consolidated Revenue, are incurred as a result of these extra-budgetary operations. The Board’s administrative costs for 1973-74 were $651,000. However, its operations for the year resulted in a surplus of $52,000, which will be paid to Consolidated Revenue in 1974-75 and will then be the subject of a modification. The Commission has, therefore, excluded $120,000 from the expenditure used to assess the State’s needs in this area for 1973-74. The amount excluded represents 20 per cent of the Board’s administrative costs after deducting the surplus for the year.

Newcastle Graving Dock Construction Account, New South Wales

4.184 In 1973-74, an amount of $390,000 was paid from the New South Wales Consolidated Revenue Fund to the above account. This payment was in addition to a State Government subsidy of $518,000 which was paid to the Newcastle Floating Dock, Crane and Slipways Account. In accordance with the general approach set out in paragraphs 4.150 to 4.152, the total amount of $908,000 has been excluded from the expenditure used to assess the claimant States’ needs in the

Public Works area.

Central Queensland Powerhouse—Coal Line

4.185 As explained in its 41st Report (1974), paragraph 4.27, the Com­ mission excluded an amount of $258,000 for interest charges from the budgetary accounts of Queensland in assessing the State’s needs for debt charges. This amount represented the interest charges on loan fund expenditure which had been designated as relating to railway construction associated with the Central Queensland Powerhouse. The Commission considered that this cost was incurred for the supply of electricity, and was therefore to be excluded from its assess­ ment of needs along with any other budgetary impact arising from the operations of electricity undertakings (see paragraph 4.151 of this Report).

4.186 In its submission at the Brisbane Hearings in December 1974, the Queensland Treasury explained that the expenditure related to the up-grading of the whole railway line and facilities from the coalfields to the power station. Although the up-grading was necessary in order that the coal could be safely and economically carried, the benefit of the work carried over to the general traffic using the line. The submission went on to point out that the expenditure related to general railway construction rather than the supply of electricity. It added that the freight charges for the carriage of coal to the powerhouse included an element to amortise the construction costs of the fixed assets over a period of 30

90

years, and for locomotives and other rolling stock and other items over 15 years. Accordingly for 1973-74 the Commission has included the interest charges in question with other railway debt charges in its comparisons of railway expenditure.

Subsidies to Racing Clubs, Queensland

4.187 In his speech introducing the State’s 1973-74 budget, the Queensland Treasurer announced a program of assistance to racing clubs in the State in respect of the provision of prize money for prestige events sufficient to attract top class entrants. The assistance was considered to be necessary so that racing clubs in Queensland could meet competition from clubs in other States and so stop any

erosion of their income sources. For 1973-74 $200,000 was appropriated for this purpose. In the standard States, assistance for particular purposes (such as up­ grading of racecourses), as distinct from the distribution of the surpluses of totalisator agency boards, is given to racing clubs. However, the special assistance

provided by the standard States is from the proceeds of racing taxation before the tax is paid to Consolidated Revenue. Thus, the revenue efforts of the standard States used to assess the taxation needs of the claimant States exclude the special assistance to racing clubs. Accordingly, the Commission has decided that the $200,000 distributed to racing clubs in Queensland from Consolidated Revenue

in 1973-74 should be excluded from the expenditure used to assess the State’s needs in that year.

Pay-roll Tax on Salaries and Wages of State Government Employees

4.188 Since the transfer of pay-roll tax from the Australian Government to the States from September 1971, the pay-roll tax levied by the States has, with certain exceptions,1 extended to the wages and salaries of State government employees. During 1973-74, the Queensland Treasury raised the matter of the

Commission’s treatment of this aspect of the tax. In the standard States, the procedure for payment of the tax in respect of State government employees is for the Treasury to assess the amount payable and to make certain appropriations in the budget to meet the liability; consequently the Commission has not been

able to allocate the total tax paid to individual departments or to the various functions of departments. It has therefore made a separate assessment of expen­ diture need for this item by taking, for each claimant State, the difference between its per capita payment and the average payment of the standard States, multiplied

by the claimant State’s population.

4.189 The Queensland Treasury expressed its concern that the Commission, in estimating the State’s extra difficulties in providing services in remote areas, should not exclude the pay-roll tax element from the comparisons of social services costs which formed the basis for the estimates. It submitted that, although the

total amount of pay-roll tax collections was not altered by the additional State government employment in the remote areas, the pay-roll tax cost in those areas could not be disregarded on the ground that it was a tax paid back to the State, because the number of government employees in those areas had the effect of

eroding the private sector pay-roll tax base. It concluded that, unless the pay-roll tax element was included in the Commission’s comparisons, Queensland’s needs for the provision of social services in remote areas would be under-estimated.

1 Tasmania excludes certain State Government employees from the provisions of the tax. South Australia excluded all State Government employees prior to 1 July 1974.

91

4.190 Queensland also submitted that the Commission’s approach resulted in under-estimation of the State’s expenditure needs for pay-roll tax because of its below-standard expenditure on social services. It pointed out that, under the Com­ mission’s procedure, below-standard expenditure by Queensland would be reflected

in the size of the Queensland Government pay-roll and in the budget appropriation to meet the tax liability thereon. This lower budget appropriation would mean a smaller per capita differential between the Queensland and the standard State Governments for this item, and thus a smaller assessment of expenditure need for pay-roll tax under the procedure outlined in paragraph 4.188. Queensland submitted that there would be no offset to this by way of the calculation of revenue need for pay-roll tax. It argued that lower employment in the State government sector would mean higher employment in the private sector of the Queensland economy, so the total pay-roll tax for both sectors together, which constituted the revenue base for the Commission’s assessment of revenue need for pay-roll tax, would not be affected. Queensland also submitted that there would be no offset to the lower expenditure need for pay-roll tax by way of the calculation of expenditure needs for social services, unless the element of pay-roll tax costs was included in the standard per unit or per capita costs by reference to which expenditure needs for social services were determined.

4.191 The Commission accepts the substance of Queensland’s argument con­ cerning pay-roll tax costs in remote areas, summarised in paragraph 4.189. How­ ever, not all employment in the Queensland Government sector which is subject to pay-roll tax can be regarded as a substitute for employment in other sectors also subject to pay-roll tax. For example, transfers may take place from the work force of local government or hospitals, which are not liable for pay-roll tax, or from interstate or unemployed members of the work force not already the subject of pay-roll tax assessment in Queensland. Nevertheless, for 1973-74 the Commis­ sion, in calculating an allowance for special difficulties in the provision of social services in remote areas by comparing Queensland’s own expenditures as between the remote and the ‘standard’ areas of the State, has followed the same procedure as in the previous year; this included pay-roll tax in the comparisons.

4.192 The Commission is inclined to agree that there is some validity in Queensland’s argument concerning its below-standard expenditure on social services, summarised in paragraph 4.190. However, at present it lacks information about the distribution of pay-roll tax liability among the various departments and functions in the standard States, which it would need in order to include the pay­ roll tax element in standard costs for the purpose of assessing expenditure needs. For 1973-74, it has continued to assess revenue and expenditure needs in accord­ ance with the approach outlined in paragraph 4.188. However, it invites further submissions from the interested parties.

Special Assistance to Flood Victims Appeal, Queensland

4.193 At the Brisbane Hearings in December 1974, the Queensland Treasury submitted that the State Government’s donation to the Queensland Flood Victims Appeal Committee in 1973-74 should be treated as a special item of expenditure, not related to the arrangement for natural disaster relief whereby each State’s expenditure above an agreed figure is met by the Australian Government. The Commission has normally based its assessment of need on a comparison of natural disaster relief expenditures required to be met from a State’s own resources under

such arrangements. The Queensland Committee had been set up by the Govern-92

ment to receive donations of cash and materials and to distribute these within the State to local appeals and to alleviate personal hardship and distress.

4.194 In its submission at the Canberra Hearings in April 1975, the Australian Treasury stated that ‘it is extremely difficult in unusual and infrequent cases of this kind to make useful comparisons with the standard States to establish “normality" The Australian Treasury added that it was ‘sympathetic to the State’s view that as

the flooding was so widespread and destructive a special need existed for the provision of funds for relief of personal hardship and distress, and that it was necessary to use the (non-government) Committee as a means of distribution to reach those affected as quickly as possible’. It also pointed out that the needs which the donations met were additional to those covered by the Australian and

Queensland Government aid programs under the normal relief arrangements. The Commission has decided that the donation was expenditure to meet a special need and has included it in the expenditures used to assess Queensland’s needs for 1973-74.

Interest and Repayments on Advance to Shepparton Preserving Co. Ltd., Victoria

4.195 The Victorian budget for 1973-74 included transactions relating to interest and repayments on an advance to the Shepparton Preserving Co. Ltd. under the Australian Government’s program for assistance to fruit canneries to offset the effects of currency re-alignments. The budget receipts included an item of $409,500 and the payments an item of $809,812. The excess of $400,312 of expenditure over receipts is related to differences in timing as to due dates of pay­

ment of interest and repayments by the State Government to the Australian Government and by the Company to the State Government. The Commission has, therefore, excluded $400,312 from Victoria’s expenditure in assessing the claimant States’ needs for 1973-74. This item will be taken into account in assessing needs

for 1974-75.

Licensing Fund, Victoria

4.196 In assessing the revenue needs of the claimant States for liquor taxation for 1973-74, the Commission has used the gross revenue from liquor licensing charges paid into the Victorian Licensing Fund in lieu of, as in previous years, the payment from that Fund to the Consolidated Fund after meeting the adminis­

tration costs of the Licensing Commission. For 1973-74, these costs amounted to $604,000. Accordingly, the expenditure used to assess the claimant States’ needs for general administration has been modified to include the administration costs met from the Victorian Licensing Fund.

Superannuation

4.197 In paragraphs 4.8 to 4.12 of its 41st Report (1974), the Commission summarised recent discussions on this matter. It stated that, for 1972-73, it had decided to use expenditure per head of population as the basis for its com­ parisons, thereby implying zero needs, except to the extent that it could identify

differences in coverage as between the schemes of the claimant and standard States. The Commission considered that each of the claimant States had below- standard coverage of its employees for superannuation purposes, and that this had resulted in a greater tendency in these States for some former State govern­

ment employees to be dependent on social services pensions from the Australian

93

Government. Accordingly, on the basis of broad judgment, it assessed an amount of negative need for each claimant State to take account of this factor. The Com­ mission invited further submissions on the matter from the interested parties.

4.198 In its submission at the Brisbane Hearings in December 1974, Queens­ land reaffirmed its support for comparisons of superannuation costs on the basis of ‘a general per capita approach whether it be per capita of population or per capita of the number of employees in fields covered by superannuation in the standard States’. It stated that such an approach ‘under the existing principles of the Commission would leave it open for percentage cost disabilities to be assessed also and taken into account’. The type of disability it had in mind was ‘that arising from the fact that the less populous States appear to have a substantially higher proportion of State employees in their populations’. Its conclusion was as follows:

‘I t seem s th a t it w o u ld be som e tim e befo re th e C om m ission w ould be in a

position to m ak e c o m p ariso n s on the basis o f em ployees in stip u lated fields.

O u r suggestion is th e re fo re th a t, fo r th e tim e being, the C om m ission co n tin u e

w ith p e r cap ita o f overall p o p u latio n co m p ariso n s b u t th a t it sh o u ld also m ake

som e allow ance f o r a n e x tra p e r c a p ita cost to cover the disabilities referred

to above. Such allo w an ce co u ld be d eterm in ed in th e light o f th e overall p e r­

centage w hich the ag g reg ate o f the c laim an t S tate’s assessed e x p e n d itu re needs (ex clu d in g d ebt servicing co sts) bears to the sta n d a rd b u d g et ex p en d itu re

(ex clu d in g d ebt serv ice co sts) o n the assu m p tio n th a t to tal salaries an d w ages

p ay m en ts will te n d to v a ry in p ro p o rtio n to to ta l b u d g et e x p e n d itu re .’

4.199 The Queensland submission also referred to the Commission’s decision to assess negative needs for the claimant States to take account of the effect on Australian Government social services pensions of the below-standard coverage of the claimant States’ superannuation schemes. Queensland stated that it was difficult to argue against the principle involved. However, it questioned whether the saving to a claimant State’s budget because of below-standard coverage was substantial when account was taken of such factors as the effect of taxation allow­ ances on contributions and the entitlement to commute large portions of a super­ annuation pension to avoid the restrictions of the means test. It pointed out that the Commission’s decision introduced a new principle, the application of which is not restricted to superannuation. It stated that ‘if the Commission proposes to take these effects into account, then it would seem that the same principle applied with respect to the free medical services available in Queensland public hospitals and the effect such free services have on the number of persons receiving Commonwealth benefits’. It went on to claim that the saving to the Australian Government’s National Health Scheme resulting from the free hospital services in Queensland amounted, in 1971-72, to above $7m.

4.200 The South Australian Treasury in its submission at the Adelaide Hear­ ings in February 1975, and the Australian Treasury in its submission at the Can­ berra Hearings in April 1975, supported the arguments of the Queensland Treasury summarised above. The Australian Treasury’s submission added that it ‘would support an approach in this area under which “needs” were related to the numbers of additional employees required by the claimant States to provide the same

standards of services as in the standard States’. It stated that it recognised that any such assessments would only be of an approximate kind.

4.201 The Commission has considered the arguments raised by the Queens­ land, South Australian and Australian Treasuries as summarised above. It recog­ nises that the changes recently made in the means test requirements for pensions

94

would have extensive effects on the entitlement of former State government employees to Australian Government pensions, particularly in the labour intensive areas of railways, education, police and hospitals. This will greatly affect the basis for assessing negative needs, because the number of former State government

employees not entitled to age pensions on retirement will be greatly reduced. The Commission also agrees that application of the principle could have wider coverage than for superannuation alone. Accordingly, for 1973-74 the Commission has not assessed negative needs for a claimant State’s below-standard coverage of its employees for superannuation purposes. The Commission accepts the view of the

Australian Treasury that needs should be related to the number of additional employees required to provide standard services in the claimant States. However, at present there is no satisfactory basis for assessing such needs. For 1973-74, after examining the relationship of State government employees in all States to total population, the Commission has, on the basis of broad judgment, assessed positive

needs of $972,000 for Queensland and $605,000 for South Australia in recognition of the higher proportion of State government employees to population required by a claimant State to provide standards of service equal to those in the standard States. These needs represent about 50 cents per head of the claimant States’ populations.

Agriculture

4.202 The Commission has continued to review expenditure by States on agriculture. This is one of the largest items of expenditure in the miscellaneous field and one in which there are considerable disparities among the States in the levels of per capita expenditure. In discussing this question in the 40th Report

(1973), the Commission noted that there was general agreement that a per capita comparison might not be an equitable basis for comparing differences in expen­ diture as between States, and said that it proposed to investigate the practicability of relating expenditures to the number of units served in major categories of

agricultural pursuits. Table 4-2 gives details of the numbers of productive rural holdings classified by type of activity, and gross expenditure by each State during 1970-71 (the latest year for which such figures are available). The table covers 77 per cent of the total of rural holdings in Australia in 1970-71; of the remain­

ing holdings, 17 per cent were sub-commercial (having gross incomes of less than $2,000 per annum) and 6 per cent were not used for production.

4.203 Further discussions on this subject took place during the 1974-75 Hear­ ings. At the Brisbane Hearings in December 1974, the Queensland Department of Primary Industries stressed the problems peculiar to that State in the field of tropical agriculture. It also claimed that the very large area of the State resulted

in greater costs to the Department in servicing farm units. At the Adelaide Hear­ ings in February 1975, South Australia stated that it had no further comments to add to its submission of the previous year, which agreed with the proposed comparison based on numbers of farm units.

4.204 At the Canberra Hearings in April 1975, the Commission distributed preliminary data pertaining to its investigations into expenditure on agriculture, and invited comments from the claimant States. Queensland submitted in a letter to the Commission that:

‘T o a large ex ten t p rim a ry p ro d u ctio n betw een the three States (Q ueensland,

N ew South W ales and V icto ria) is n o t co m parable due to the difference in

activities and th e difference in th e extent to w hich v arious activities are

c arried o u t.’

95

Table 4-2 — NUMBER OF RURAL HOLDINGS (a) CLASSIFIED BY STATE AND TYPE OF ACTIVITY— 1970-71

Fruit

State Sheep

Cattle Cattle Vine- (other

(meat) (milk) Pigs Poultry yards than Potatoes

vine)

New South Wales . 23,229 6,619 7,523 816 1,293 649 3,748 215 Per cent . . 41.7 11.9 13.5 1.5 2.3 1.2 6.7 0.4 V ictoria. . . 18,810 4,908 16,263 620 946 1,987 1,815 655 Per cent . . 36.2 9.5 31.3 1.2 1.8 3.8 3.5 1.3 Queensland . . 2,935 8,967 6,773 933 421 84 2,016 384 Per cent . . 8.0 24.6 18.5 2.6 1.2 0.2 5.5 1.0 South Australia . 8,716 726 2,341 396 316 1,447 1,720 131 Per cent . . 40.1 3.3 10.8 1.8 1.4 6.7 7.9 0.6 Western Australia . 8,434 1,560 1,129 164 290 197 846 76 Per cent . . 46.4 8.6 6.2 0.9 1.6 1.1 4.7 0.4 Tasmania . . 1,759 444 2,448 150 59 869 100 Per cent . . 27.2 6.9 37.9 2.3 0.9 13.4 1.6 N orthern Territory . 1 206 3 5 10 3

Per cent . . 0.4 79.5 1.2 1.9 3.9 1.2

Australian Capital Territory 108 10 6 6 1

0.7

1

0.7

Per cent . . 77.2 7.1 4.3 4.3

Australia . .

Per cent . .

63,992 33.5 23,440 12.3

36,486 19.1

3,084 1.6

3,341 1.8

4,364 2.3 11,018 5.8

1,562 0.8

of $2-” »·»â– » ™ re- -■■■» '

State govern­ ment gross expendi­

ture

$’000

18,640

10,383

8,908

4,540

7,219

3,933

n.a.

n.a.

It further suggested that the establishment of standards for each section of the industry be carried out on a progressive basis. South Australia advised that it was in general agreement with the information contained in the Commission’s paper. The Commission intends to discuss its proposed approach with officers of the State departments of agriculture with a view to further testing the com­ parability and suitability of the data used in the comparisons and facilitating

the adoption of the approach for 1974-75.

4.205 For 1973-74 the Commission has continued to assess the needs of a claimant State as the product of its population and the difference between its per capita modified expenditure and the average of the standard States’ per capita expenditures. The figure for expenditure on agriculture in New South Wales used in

the Commission’s assessment of need has been modified to eliminate an amount of $195,000. This represented the unexpended balance at 30 June 1974 of an appropriation of $200,000 to a special deposit account, used to record financial transactions relating to the control of insect infestation in gram and vegetable

oil seeds.

97

CHAPTER 5

Budgetary Comparisons and Recommendations 5.1 In order to assess the financial needs of Queensland and South Australia for the year of review 1973-74, the Commission examined the audited accounts for that year of those two States and of the two standard States (New South Wales

and Victoria). The budgetary accounts of the four States were modified to render them comparable for the Commission’s purposes. The modifications are discussed under the relevant items of revenue and expenditure in Chapter 4, insofar as new items and matters of principle or methodology have been raised during the year.

For the purpose of its comparisons, the Commission has examined the budgets of all the States, and noted changes occurring therein, over the three years 1971-72 to 1973-74. A summary of the published budgetary accounts for each State is presented in tabular form in Appendix F, together with brief comments on the principal changes over this period.

M o d if ic a t io n s

5.2 The principles on which the Commission bases its modifications to items in the published budgetary accounts of the States are outlined in Chapter 3 (para­ graphs 3.22 and 3.23). It must be emphasised that in making such modifications the Commission does not in any way criticise the policies or practices of any of the States. Modifications are made only to assist the Commission in its task of assessing

the revenue and expenditure needs of the claimant States by comparison with the standard States. In some cases the need for a modification arises from the lack of uniformity in accounting practices. In other cases the Commission adjusts the revenue or expenditure items of a claimant State so that a comparison can be made with the corresponding items in the standard States without the comparison being affected by differences in policies. Because modifications have an important bearing on the amounts of the completion grants recommended by the Commission, all parties discuss possible modifications at the State and Canberra Hearings each year. As noted above, new items and matters of principle raised during this year’s Hearings are discussed in Chapter 4.

A s s e s s e d N e e d s

The Commission s Methodology

5.3 The modified revenues and expenditures of the standard States, and in some cases those of the claimant States, form the basis of the Commission’s assess­ ment of the financial needs of each claimant State. The revenue needs of a claimant State are calculated by three principal methods, depending on the availability of information in each case:

(a) Where adequate information is available about the revenue base of both the claimant and the standard States, the revenue need for a particular item of revenue is assessed directly and is equal to the shortfall in the claimant State’s revenue-raising capacity. For this

98

purpose the Commission, taking each of the standard States in turn, calculates the difference between (i) the revenue which would have been obtained in the claimant State if its revenue base per head of population had been the same as that of the standard State and it had

made the same revenue-raising effort as the standard State, and (ii) the revenue which would have been obtained in the claimant State if it had applied to its own revenue base the revenue-raising effort of the standard State. The two differences so calculated (one for each standard

State) are then averaged to give the measure of the claimant State’s revenue need. Revenue needs have been assessed in this way for most items of taxation.

( b) Where information about the revenue-raising effort of the standard States or the respective revenue bases of the claimant and the standard States is lacking, the Commission estimates the relative revenue-raising capacities by indirect means, using such information as is available

and exercising broad judgment. In the case of taxes related to turnover, for example, it has sometimes been necessary to use turnover as an approximate measure of the tax base, subject to such adjustments as may be necessary to allow for differences in the revenue-raising efforts

of the claimant and the standard States.

(c) Where revenue-raising efforts are considered to be comparable as between the claimant and the standard States, the revenue need for a particular item may be assessed implicitly as the difference between the average per capita modified revenue raised by the standard States

and the per capita modified revenue of the claimant State, multiplied by the claimant State’s population. This procedure has been adopted for some items of miscellaneous revenue. Revenue need as assessed for an item under any of the three methods may be positive or negative.

5.4 Expenditure needs are likewise calculated by one of three methods: (a) Where appropriate cost and other information is available, the need of a claimant State for a particular item of expenditure is assessed directly by comparing the cost per head of population in the standard

States with the cost of providing a comparable service in the claimant State. For this purpose the Commission, taking each of the standard States in turn, calculates the difference between (i) the expenditure which would need to be incurred by the claimant State in providing a

service of similar range and quality to that of the standard State, and (ii) the expenditure which would have been incurred by the claimant State if it had spent the same amount per head of population as the standard State. The two differences so calculated (one for each

standard State) are then averaged to give the measure of the claimant State’s expenditure need for the service in question. This method is generally used in assessing expenditure needs for social services.

(b) Where it is inappropriate or impossible for the Commission to make such direct assessments of expenditure needs, it is sometimes necessary to assess expenditure needs indirectly by reference to differences in per capita expenditures as between the claimant and the standard States,

using broad judgment (or such detailed information as may be avail­ able) to adjust for differences in per capita expenditures which result

99

from differences in State policies or in the relative efficiency with which services are provided. This approach has been generally followed in assessing needs for expenditure on debt charges, railways and metro­ politan road transport undertakings.

(c) Where it is not possible to identify and measure the effects of differ­ ences in State policies or relative efficiency, the Commission implicitly assesses the needs of the claimant State for a particular form of expenditure by reference to the difference between the claimant State’s per capita expenditure and the average per capita expenditure of the standard States, multiplied by the claimant State’s population. This method is adopted for most forms of general administrative and miscellaneous expenditures. The Commission is aware that amounts assessed under this method may partly reflect, instead of needs, differ­ ences in the range, quality or efficiency of services. For this reason, it keeps amounts of expenditures and trends in such expenditures under review and, as additional information has become available, it has gradually extended the range of expenditure items compared under one or other of the other two methods.

As with revenue needs, assessed need for a particular item of expenditure may be positive or negative.

Taxation

5.5 The total and per capita revenues raised by each State from motor tax, probate and succession duties, stamp duties, land tax, entertainment tax, liquor tax, racing tax, poker machine licence tax, lottery revenue, statutory corporation payments, casino tax, tobacco tax, pay-roll tax and other taxes and licences, n.e.i. are shown in Tables E-5 to E-7 of Appendix E. Appendix G gives a summary of the main features of these taxes in each State at 30 June 1974 and of new taxes or

Table 5-1 — ASSESSED REVENUE NEEDS 1973-74 — TAXATION

Item

Standard Revenue Per Capita

Assessed N eed

Queensland South Australia

Total

Per

Capita

Total

Per Capita

$ $’000 $ $’000 $

Probate and succession duties 15.98 10,871 5.59 6,429 5.31

Stamp duties 40.00 — 6,727 — 3.46 11,607 9.59

Land tax 10.26 10,054 5.17 5,352 4.42

Entertainm ent tax 0.04 22 0.01 16 0.01

Liquor tax 4.28 — 411 — 0.21 1,202 0.99

Racing tax 8.86 1,357 0.70 2,369 1.96

Poker machine licence tax 5.26 1.497 0.77 1,622 1.34

Lottery revenue 4.48 797 0.41 1,102 0.91

Statutory corporation payments 1.64 472 0.24 286 0.24

Pay-roll tax 62.56 27,872 14.33 19,746 16.31

Other taxes and licences, n.e.i. 1.54 132 0.07 — 269 — 0.22

Total— taxation 154.90 45,936 23.62 : 49,462 40.86

100

changes in rates and conditions during 1973-74. The taxes listed do not include revenue from fines, which the Commission takes into account in assessing needs for social services (see paragraph 5.12 below).

5.6 The per capita standard and the assessed needs of the claimant States for taxation revenue (other than fines and motor or certain other taxes paid to special funds) are indicated in Table 5-1.

Territorial and Other Non-Tax Revenue

5.7 Table 5-2 records the per capita standard and the assessed needs of the claimant States in relation to land revenue, mining royalties and other non-tax revenue. Relative to 1972-73, needs for other non-tax revenue for 1973-74 were affected by revised classifications and regroupings of various items.

Table 5-2 — ASSESSED REVENUE NEEDS 1973-74 — TERRITORIAL AND OTHER NON-TAX REVENUE

Assessed N eed

Item

Standard Revenue Per

Queensland South Australia

Capita

Total

Per

Capita

Total

Per

Capita

Land revenue Mining royalties Other non-tax revenue

$

2.28 4.66 12.35

$’000 — 10,054 — 10,696 8,858

$

— 5.17 — 5.50 4.55

$’000 1,126 2,809 1,483

$

0.93 2.32 1.22

Total— territorial and other non-tax revenue 19.29 — 11,892 — 6.12 5,418 4.47

Expenditure on Social Services

5.8 Statistics of State expenditure on certain social services from consolidated revenue and special funds during 1973-74 have been prepared for the Commission by the Australian Bureau of Statistics, and are summarised in Table E-4, Appendix E of this Report. The Commission uses these statistics as the basis for its com­

parisons of social services expenditure, but it also takes into account a number of factors affecting comparisons of particular items. Some of these factors are referred to in the following paragraphs.

5.9 Concessional Fares — State Transport Undertakings. In all States, pen­ sioners and children travelling to and from school are carried by the State railways at fares below those ordinarily charged to adults and children. Concessional fares are also offered by other State government transport undertakings and by the

Brisbane City Council on its metropolitan transport services. For pensioners, the transport undertakings in all States except Queensland and Tasmania received some reimbursement from consolidated revenue in 1973-74 for the difference between the normal adult fares and those actually charged. For children travelling

to and from school, all States except Queensland reimbursed the undertakings for concessions in 1973-74. With the exception of the Brisbane City Council services,

101

the Commission takes the financial results of these undertakings into its assessment of needs. The cost of concessions is taken into account either by way of the financial results of the undertakings or through social services expenditure.

5.10 In assessing needs in relation to the tramways and omnibus undertakings, the Commission compares fares actually charged to pensioners and school children. Reimbursements to the undertakings from Consolidated Revenue are therefore excluded from the Commission’s comparisons of social services expenditure. The amounts so excluded for 1973-74, together with comparable data for Western Australia and Tasmania, are shown in Table 5-3.

Table 5-3 — PENSIONER AND SCHOOL CHILDREN REIMBURSEMENTS 1973-74

State

Pensioner

Reim bursem ents (a) School Children Reim bursem ents (b)

$’000 $’000

New South Wales 2,318 1,927

Victoria 1,031 1,044

Queensland N IL NIL

South Australia 821 122

Western A ustralia 2,022 730

Tasm ania N IL 275

(a) Included in T able E-4 of A ppendix E under ‘H ealth, H ospitals and W elfare’. (b) Included in Table E-4 of Appendix E under ‘E ducation’.

5.11 Lack of data prevents a similar comparison of fare levels for State railways. For the purpose of the Commission’s assessment of needs, all reimburse­ ments to the railways for the cost of concessional fares have been taken into account in social services expenditure.

5.12 Revenue from Fines. Prior to 1967-68 the figures of the Australian Bureau of Statistics for net expenditure on ‘Law, Order and Public Safety’ took account of revenue from fines, but from that year such revenue has been treated by the Bureau as a form of taxation and accordingly excluded from the figures shown in Table E-4 of Appendix E. However, the Commission has, for convenience, con­ tinued to take the revenue from fines into account in assessing needs for social services. Fines revenue for 1973-74 excluded by the Australian Bureau of Statistics from the data in Table E-4 of Appendix E is shown below for all States:

State Fines

$’000

New South W a l e s .............................................................. 17,290

Victoria 8,594

Q u e e n s l a n d ................................................................................. 4,164

South A u s t r a l i a ........................................................................ 2,320

Western A u s t r a l i a ........................................................................ 3,032

Tasmania ....................................................................... 261

5.13 Expenditure on Technical Education. The Commission considers that in Table E-4 of Appendix E the figures for university education in New South

102

Wales include some expenditure which in other States is included under the heading of expenditure on technical education. Therefore, in making its comparisons of expenditure levels it had deducted $1,420,697, representing 30 cents per capita, from university expenditure in New South Wales and added it to expenditure on

technical education in that State. This amount, which was formerly calculated as 60 cents per capita, has been reduced in recognition of the fact that the States ceased to be financially responsible for tertiary education as from 1 January 1974. The adjustment will be discontinued in future years.

5.14 State Expenditure on Universities. Since 1961, the Commission has given separate consideration to university finance in assessing needs for social services expenditure. In comparing the financial provisions for recurring expenditures of universities from the budgets of the claimant and the standard States, the Com­

mission has taken as its guide the qualifying conditions specified in the Australian Government’s legislation providing for grants to the States for universities. This legislation has specified the total sum which must be obtained by the universities

of each State from fees and State government grants as a condition of receiving the maximum Australian Government grant. The Commission has been concerned with the impact of university finance on the State budgets. It has therefore com­ pared the level of university fees in the claimant and the standard States in order to determine whether the claimant States have provided from their budgets amounts

in excess of ‘standard’. The ‘standard’ has been determined by reference to the average level of fees in the standard States and a total level of finance from fees and State grants not exceeding the minimum required to obtain the maximum matching grants from the Australian Government. Any excess or above-standard

provision from a claimant State’s budget has been excluded in assessing its expenditure need.

5.15 After examining the factors mentioned in the preceding paragraph the Commission has determined that there was no such excess provision in the claimant States’ budgets for the period 1 July 1973 to 31 December 1973. As from 1 January 1974 the Australian Government assumed full financial responsibility

for tertiary education and the States’ financial assistance grants were reduced by the amounts that the States were previously spending on tertiary education. In

Table 5-4 — ASSESSED EXPENDITURE NEEDS 1973-74 — SOCIAL SERVICES

Assessed Need

Item

Standard Net Expendi­ ture Per

Capita

Queensland South Australia

Total

Per

Capita

Total

Per

Capita

$ $’000 $ $’000 $

Education 118.67 12,732 6.55 21,604 17.84

Health, hospitals and welfare 65.43 1,096 0.56 — 49 — 0.04

Law, order and public safety 20.33 2,237 1.15 — 57 — 0.05

Aborigines, n.e.i. — 7,317 3.76 1,198 0.99

Total— social services 204.43 23,382 12.02 22,696 18.74

103

5.16 Table 5-4 lists the per capita standard and the assessed needs of the claimant States in relation to social services expenditure.

order to take this into account the Commission has decided that, from 1 January 1974, it will exclude from its comparisons all expenditure on and receipts from tertiary education for which the Australian Government is financially responsible.

Business Undertakings

5.17 The Commission has closely examined the operations of the various State business undertakings with particular reference to their comparative impact on State budgets for 1973-74. These matters are discussed in Appendix H, which deals with the following undertakings:

(a) railways (paragraphs H.2 to H.13); (b) metropolitan road transport undertakings (paragraphs H.14 to H.20); (c) metropolitan water supplies, sewerage and drainage (paragraphs H.21 to H.24);

(d ) country water supplies, sewerage, irrigation and drainage (paragraphs H.25 to H.31); (e) harbours (paragraphs H.32 to H.37); (/) electricity (paragraphs H.38 to H.43); (g) forestry (paragraphs H.44 to H.50); (h) housing (paragraphs H.51 to H.56).

5.18 As indicated in paragraphs 4.147 to 4.153 of this Report, the Commission has adopted modifications to the published budgetary accounts for the purpose of excluding from its assessment of needs all revenue and expenditure relating to metropolitan water, sewerage and drainage, harbours, housing, electricity and gas (except in relation to statutory corporation payments), road finance and slum clearance, and including therein the financial results of railways and metropolitan road transport undertakings (except for the transport undertaking of the Brisbane City Council). In addition, it has decided to exclude the effect of forestry operations

(except for certain interest charges) and to modify from State budgetary accounts the impact of a variety of subsidies, payments and contributions to and from

Table 5-5 — ASSESSED EXPENDITURE NEEDS 1973-74 — BUSINESS UNDERTAKINGS

Assessed N eed

Item

Standard Expendi­ ture Per Capita

N et

Queensland South Australia

Total

Per

Capita

Total

Per Capita

$ $’000 $ $’000 $

Railways 28.48 25,796 13.26 — 6,145 — 5.07

M etropolitan road transport Country water supplies, sewerage. 5.23 — 10,171 — 5.23 — 3,439 — 2.84

irrigation and drainage 7.43 — 4,298 — 2.21 2,882 2.38

Total— business undertakings 41.14 11,327 5.82 — 6,702 — 5.53

104

undertakings operating outside the budgets (see paragraph 4.152). Where needs are assessed by reference to the financial results of undertakings, action is taken to remove the effect on those results of differential fares, freight rates, depreciation charges and wage levels in the claimant States.

5.19 The assessed needs of the claimant States with respect to business under­ takings (railways, metropolitan road transport undertakings and country water supply undertakings) are summarised in Table 5-5. As indicated in paragraph 4.164, for 1973-74 the needs for country water supply have been assessed on the

basis of including in the expenditures of the claimant and standard States estimates of unrecouped debt charges and subsidies relating to the undertakings. This has had the effect of increasing the needs for country water supply, and reducing the needs for unrecouped debt charges and subsidies for 1973-74, relative to those

assessed for 1972-73.

Other Expenditure

5.20 The needs of the claimant States with respect to most other forms of expenditure are assessed by reference to the procedures described in sub-paragraphs (b) and (c) of paragraph 5.4 above. Table 5-6 records these items, which relate mainly to debt charges, administration and miscellaneous expenditures.

5.21 Expenditure, n.e.i. for Queensland includes substantial implied needs for expenditures on Industrial Development, Labour and Industry, Tourist Bureau, Valuer-General and Public Service Board. Some of these (as in the case of Lands and Mining shown separately in Table 5-6) are related to items on the revenue

side for which assessed needs are negative. The Commission has begun to examine

Table 5-6 — ASSESSED EXPENDITURE NEEDS 1973-74 — OTHER EXPENDITURE

Assessed N eed

Item

Standard N et Expendi­ ture Per

Capita

Queensland South Australia

Total

Per

Capita Total

Per Capita

$ $’000 $ $’000 $

Unrecouped debt charges, n.e.i. 21.50 6,262 3.22 1,235 1.02

Legislation 1.37 574 0.29 1,592 1.31

Lands 2.79 4,230 2.18 624 0.52

Mining 0.86 4,278 2.20 2,615 2.16

Forestry 0.26 1,886 0.97 _ —

Agriculture 5.58 5,883 3.02 — 103 — 0.08

Pay roll tax, n.e.i. 5.28 — 564 — 0.29 — 6,393 — 5.28

Superannuation, n.e.i. 6.65 1,517 0.78 1,792 1.48

Public works 4.59 2,567 1.32 2.204 1.82

Local government and town planning 1.23 4,346 2.24 — 200 — 0.17

Ombudsman, price control and consumer affairs 0.05 175 0.09 436 0.36

Expenditure, n.e.i. 13.00 2,720 1.40 2,480 2.05

Total— other expenditure 63.16 33,874 17.42 6.282 5.19

105

the reasons for Queensland’s high expenditures in those items in Table 5-6 where substantial needs are implied. South Australia’s needs in this area have also been reviewed. The Commission has reclassified and regrouped several items and assessed separately the needs for superannuation, n.e.i., local government and town planning, and ombudsman, price control and consumer affairs. The needs of both claimant States for ‘expenditure, n.e.i.’ in 1973-74 are therefore much lower than those assessed for 1972-73.

Australian Government Assistance

5.22 In assessing a claimant State’s revenue needs, general revenue grants received from the Australian Government are ignored. But an amount is deducted from the claimant State’s assessed needs in order to take account of the fact that the distribution of financial assistance and other general revenue grants partly reflects differences in financial need among the States. This amount is calculated as the product of (a) the claimant State’s population and ( b) the difference between the claimant State’s, and the average of the standard States’, per capita general revenue grants (other than special grants).

5.23 A similar procedure is adopted for two items of specific purpose grants received from the Australian Government. These items are interest payments under the Financial Agreement and debt charges assistance pending the takeover of certain State debts. They are treated in the same way as general revenue grants,

partly because their budgetary effects are similar and partly because they are related to an expenditure item (debt charges) for which an assessment of need is made. Other specific purpose grants, and the expenditures financed from these grants, have been excluded from the Commission’s assessment of needs. A detailed dis­ cussion on the general treatment of Australian Government specific purpose grants is given under the item Treatment of Australian Government Specific Purpose Payments to States for Recurrent Purposes (see paragraphs 4.67 to 4.93).

5.24 Table 5-7 indicates for 1973-74 the per capita standard and the portion of the claimant States’ assessed needs met from Australian Government grants (other than special grants).

Table 5-7 — EFFECT ON ASSESSED NEEDS 1973-74 OF AUSTRALIAN GOVERNMENT GRANTS (OTHER THAN SPECIAL GRANTS)

Assessed N eed

Item

Standard Revenue Per

Queensland South A ustralia

Capita

Total

Per

Capita

Total

Per

Capita

Financial assistance grants (a) S 123.92 $’000

— 81,473

$

—41.90

$'000

— 57,640

$

— 47.61

Interest payments under Financial Agreement 1.21 146 0.08 163 0.14

Debt charges assistance 3.14 — — — 2,179 — 1.80

Total 128.27 — 81,327 — 41.82 — 59,656 —49.27

(a) Includes special revenue assistance.

106

Assessed Needs — Summary

5.25 Table 5-8 provides a summary of the Commission’s assessment of needs for Queensland and South Australia for 1973-74. The assessed special grant for each State is calculated as the difference between its assessed needs and the amount already provided towards those needs by the Australian Government,

through other general revenue grants and the grants relating to debt charges referred to in paragraph 5.23.

Table 5-8 — SUMMARY OF ASSESSED NEEDS AND ASSESSED SPECIAL GRANTS 1973-74

Queensland South Australia

$’000 $’000

Revenue needs Taxation 45,936 49,462

Territorial and other non-tax revenue — 11,892 5,418

Expenditure needs Social services 23,382 22,696

Business undertakings 11,327 — 6,702

Other expenditure 33,874 6,282

Total assessed needs 102,627 77,156

Less: Assessed needs m et from other A ustralian Governm ent grants 81,327 59,656

Assessed special grants 21,300 17,500

R e c o m m e n d e d C o m p l e t io n G r a n t s

5.26 In 1973-74, the claimant States received advance grants on the Com­ mission’s recommendations, pending the Commission’s final assessment of need for that year on the basis of the audited accounts of the States. The amount of the advance grant received by Queensland was $10m, while South Australia’s advance grant was $15m. The completion grants now assessed and recommended for pay­

ment by the Commission represent the differences between the assessed special grants for 1973-74 (see Table 5-8) and the advance grants which have already been paid to the claimant States.

Assessed Completion Grants /or 1973-74 $’000

Queensland Assessed special grant 21,300

Less: Advance grant paid in 1973-74 10,000

Assessed completion grant 11,300

South Australia Assessed special grant 17,500

Less: Advance grant paid in 1973-74 15,000

Assessed completion grant 2,500

107

5.27 In accordance with the decision to remove all limitations on the amount of the recommended completion grant (see paragraph 3.31), the Commission recommends that the whole of each State’s assessed completion grant for 1973-74 be paid in 1975-76.

5.28 In determining the recommended completion grant, the Commission previously took into account any completion grants which had been assessed in the past but had not been used, as explained in paragraph 3.25 of Chapter 3 of this Report. Queensland has not had any unused assessed grants available for credit. As explained in paragraph 1.17 of the 41st Report (1974), unused assessed grants available for credit to South Australia at the end of the 1972-73 year of review amounted to $6,434,000. However, under the terms of the agreement between the Australian and the South Australian Governments governing the transfer of the non-metropolitan South Australian railway system to the Australian Government

(see paragraph 2.55), this amount was paid to South Australia during 1974-75. Therefore it has not been taken into account in determining the recommended completion grant for 1973-74.

R e c o m m e n d e d A d v a n c e G r a n t

5.29 In determining the advance grant recommended for payment to Queens­ land in 1975-76, the Commission has again endeavoured to forecast directly the State’s revenue and expenditure needs arising from taxation, expenditure on social services, business undertakings and other revenue and expenditure. For this purpose it has examined preliminary figures of the claimant State’s budget prospects for the year and any available information about the standard States’ budget prospects. It has also reviewed recent trends in assessed needs in relation to particular items of revenue and expenditure, and has allowed for Australian Government grants as estimated by the Australian Treasury. After taking these and other factors into consideration it recommends an advance grant of $25m for Queensland for

1975-76.

5.30 The rapid changes in economic conditions in recent years have increased the difficulty of forecasting the financial needs of the claimant States. The Com­ mission’s ability to make accurate forecasts is also severely limited by the difficulty of obtaining information about the budget prospects of the standard States. In the current year the Commission proposes to discuss these problems with the interested parties and with the Governments of New South Wales and Victoria.

5.31 When audited accounts and other necessary information for 1975-76 are available, the Commission will be able to complete its assessment of the special grant for each claimant State for that year, which will have become the year of review. The amount of grant so assessed may either exceed or be less than the amount of advance grant now recommended. Under the Commission’s procedure any difference will become either a positive or a negative completion grant to be recommended in 1977-78, when the year 1975-76 comes under review.

108

S u m m a r y o f R e c o m m e n d a t io n s

5.32 The Commission recommends that the following amounts the claimant States in 1975-76: $’000 Queensland

Advance grant for 1975-76 25,000

Positive completion grant for 1973-74 11,300

South Australia Positive completion grant for 1973-74

Total special grants recommended for payment in 1975-76

paid to

$’000

36,300

2,500

38,800

109

CHAPTER 6

Acknowledgments

6.1 During the past year Premiers, Ministers and State officials of Queensland and South Australia helped in every possible way to make the Commission’s official Hearings and tours of inspection informative and comprehensive, and to meet other requests for information.

6.2 The Commission acknowledges the valuable assistance received from the Australian Treasury and from other Australian Government Departments (par­ ticularly the Australian Bureau of Statistics). The Commission also records its appreciation of the important assistance given by State Treasuries and other departments of non-claimant States in response to its requests for information.

6.3 As mentioned earlier in this Report, Sir Leslie Melville, K.B.E., retired as Chairman of the Commission at the end of September 1974. Sir Leslie was appointed Chairman (then on a part-time basis) in 1966, following a short period as a member. He became the first full-time Chairman of the Commission when it began its inquiries into financial assistance for local government in 1973. He has had a long and distinguished career in public service spanning some forty years. The Commission records its deep appreciation of Sir Leslie’s outstanding contribu­ tion and leadership to the work of the Commission over a long period of years.

6.4 Mr A. A. Glasson, who had been acting in the position of Secretary to the Commission since 1 March 1974, was appointed Secretary on 20 February 1975 following the appointment of Mr D. V. Moye as a full-time Member of the Commission as from 1 January 1975. The Commission records its appreciation of his assistance as well as that of all members of the staff of the State Finances and Research Branch of the Commission during the course of the year.

110

APPENDIX A

Australian Production and Economic Data

111

Number o f sheep Φ)

Number o f cattle (6)

Farm income (c)

N et

value o f primary pro­ duction

id)

mil mil $m $m

117.6 14.9 944 1,667

123.1 15.2 1,172 1,989

126.9 15.6 1,025 1,980

130.8 15.8 899 1,865

139.1 16.5 930 1,960

149.8 17.3 1,111 2 189

149.3 16.9 713 1,836

152.7 16.3 963 2,031

155.2 16.5 (e)986 2,167

152.7 17.3 1,012 2,187

157.7 18.0 934 2,154

158.6 18.5 1,089 2,386

165.0 19.1 1,396 2,774

170.6 18.8 1,327 2,745

157.6 17.9 1,023 2,600

164.2 18.3 1,401 2,999

166.9 19.2 822 2,555

174.6 20.6 1,270 3,036

180. 1 22.2 1,075 2 908

177.8 24.4 884 2,808

162.9 27.4 1,144 3,152

140.0 29. 1 1.723 4,034

145.3 30.9 2,838 n. a.

Excludes mining and quarrying.

Table Λ-2 — A U S T R A L IA — IN D U S T R IA L P R O D U C T IO N

Year

Elect­ ricity gener­ ated

Gas avail­ able for issue

Cement, Port­ land

Clay bricks

Crude oil

Nickel refined

Ingot steel

Zinc refined

Lead refined

mil mil Ό00 "000 "000 Ό00 Ό00 "000

kWh MJ tonne mil m3 tonne tonne tonne tonne

1951-52 . 11,297 21,772 1,262 720 1,551 86 192

1952-53 . 12,045 21,921 1,468 667 1,837 88 196

1953-54 . 13,707 22,631 1,734 802 2,159 101 241

1954-55 . 15,202 23,362 1,958 839 2,253 103 240

1955-56 . 16,675 23,998 2,076 840 2,366 106 225

1956-57 . 18,289 24,995 2,216 805 2,829 109 245

1957-58 . 19,796 25,482 2,337 878 3,099 117 261

1958-59 . 21,199 25,938 2,531 940 3,268 117 244

1959-60 . 23,199 27,210 2,685 1,030 3,590 120 242

1960-61 . 24,814 27,942 2,917 1,061 3,823 128 (6)179

1961-62 . 26,275 27,995 2,839 992 4,158 157 177

1962-63 . 29,279 28,906 3,001 1,059 4,345 179 213

1963-64 . 32,519 29,956 3,386 1,238 4,859 190 221

1964-65 . 35,671 30,973 3,821 1,344 315 5,223 193 203

1965-66 . 38,049 31,175 3,740 1,360 504 5,672 200 192

1966-67 . 41,522 31,694 3,712 1,358 645 6,186 201 196

1967-68 . 44,531 33,072 3,881 1,440 1,902 2.0 6,424 192 191

1968-69 . 48,898 37,982 4,139 1,627 2,236 6.2 6,705 232 178

1969-70 . 53,887 43,363 4,499 1,694 4,872 18.2 6,874 262 188

1970-71 . 57,974 84,774 4,685 1,669 14,937 35.1 6,800 254 155

1971-72 . 59,510 109,770 4,884 1,744 19,041 35.9 6,585 274 191

1972-73 . 64,802 147,651 5,037 1,874 20,669 36.7 7.235 299 174

1973-74 . 69,743 170,040 5,330 2,066 23,096 42.7 7,707 282 201

Copper refined

Pig- iron

Super­ phos­ phate

Motor bodies (a)

Cotton yarn

Woollen and worsted yarn

Ό00 tonne

"000 tonne

"000 tonne "000

mil kg

mil kg

18 1,459 1,629 69 15.7 16.6

19 1,726 1,613 71 12.5 16.2

21 1,864 1,806 91 17.3 20.8

31 1,906 2,000 99 18.8 19.4

25 1,949 2,169 107 18.4 19.6

33 2,140 2,015 96 19.4 21.7

37 2,330 2,264 126 20.2 20.7

46 2,340 2,166 146 19.3 18.4

66 2,708 2,428 178 21.1 23.0

70 3,062 2,582 188 19.5 22.0

65 3,448 2,643 176 19.7 21.4

87 3,468 2,919 245 21.2 23.5

91 3,847 3,414 248 25.2 23.7

54 4,015 3,777 (c)305 26.8 24.6

93 4,468 4,350 328 26.8 23.7

76 4,991 4,688 330 27.8 23.1

73 5,313 4,382 361 27.6 24.2

96 5,749 (6)4,017 392 27.7 24.5

105 5,956 3,592 447 29.2 26.5

115 6,240 3,127 428 28.8 28.0

131 6,006 3,743 446 26.6 27.8

136 7,182 4,735 433 27.5 27.3

149 7,515 5,313 458 30.7 24.6

(а) Includes the production of m otor bodies of cars, stationwagons and utilities, m ainly A ustralian made. (б) New series. (c) Series discontinued. Subsequent figures recorded are A ustralian production of cars, stationwagons and utilities (both finished and partly finished vehicles). Source: A ustralian Bureau of Statistics.

Table A -3 — WEEKLY BASIC WAGE AND MINIMUM WAGE RATES FOR ADULT MALES—METROPOLITAN AREAS

South Australia

Federal State

28.30 28.30 30.30 30.30

30.30 32.30

33.30 (a)34.65 34.65 37.85

39.85 43.15 46.50 48.20

36.05 36.05 37.05 38.40

41.90 45.90 50.60 59.60

67.60 79.60

Western Australia Tasmania

Federal State Federal State

S $ $ $

28.80 29.88 29.40 29.40

28.80 30.02 29.40 29.40

30.80 30.42 31.40 31.40

30.80 31.47 31 .40 31.40

30.80 32.65 31.40 31.40

32.80 33.50 33.40 33.40

33.50 34.40

35.45 35.75

36.45 36.80

38.45 39.00

40.45 41 .00

44.00 43.50

48.50 46.00

1 .. 48.50 47.70

36.55 37.15

36.55 36.55 37.15

37.55 37.55 38.15 38.15

38.90 38.90 39.50 40.45

42.40 42.40 43.00 43.00

46.40 46.40 47.00 47.00

51 .10 53.50 51.70 51 .70

60.10 57.00 60.70 60.70

6 8 . 1 0 69.00 68.70 68.70

80.10 82.50 80.70 80.70

' The variations in the rates do not necessarily operate from the dates shown. Note: From July 1967, basic wages and margins were deleted from aw ards determined by the A ustralian Conciliation and A rbitration Commission and from Wages Board determ inations in Victoria. (a) From 22 December 1969 an economic loading of 3 per cent of the sum of the living wage plus margin was added to all award rates of pay.

Source: A ustralian Bureau of Statistics.

APPENDIX B

States’ Production and Economic Data

Table B -l — PR O D U C T IO N A N D EC O N O M IC D ATA — N E W SO U TH W A LES

Commodity Production

Sawmill output

Year Whole Aus- Black

Wool Meat milk Wheat tralian coal

grown timber

mil ’0 0 0 mil mil Ό00 mil

kg tonne 1 tonne m3 tonne

1951-52. 199 312 1,097 1 .1 898 15.1 1952-53. 253 378 1,444 1.5 820 14 6 1953-54. 247 383 1,284 1.7 874 15.3 1954-55. 246 378 1,436 1 . 0 880 15 0 1955-56. 270 380 1,519 1 . 6 856 14.91956-57. 300 394 1,394 0 . 8 862 15 5 1957-58. 253 397 1,313 0.3 849 16.1 1958-59. 311 467 1,491 1 .8 896 16 1 1959-60. 325 437 1,585 2 .1 941 16 8 196U-61. 302 402 1,453 2.3 922 18.61961-62. 318 472 1,568 2 . 1 871 19 5 1962-63. 315 502 1,475 3.0 892 19 1 1963-64. 332 527 1,467 3.3 965 20 8 1964-65. 321 541 1,328 4.1 1,022 22 3 1965-66. 263 473 1,368 1.1 1,010 25.11966-67. 283 430 1,470 5.5 984 26 8 1967-68. 295 474 1,411 2.4 1,017 28 7 1968-69. 306 497 1,269 5.9 972 32 5 1969-70. 340 565 1,415 4.4 1,003 35 5 1970-71. 314 595 1,238 3.0 966 35.71971-72. 282 645 1,174 2.4 991 36 8 1972-73. 226 690 1,179 2 . 0 1,035 38 0 1973-740) 213 560 1,088 4 .0 1,151 36.6(a) Year ended December prior to 1968-69. (c) Includes Aborigines since 1961-62. (e) Subject to revision.Source: A ustralian Bureau of Statistics.

Motor vehicles on register

Railway freight volume

Dwellings com­ pleted

Elec­ tricity gener­ ated

Mean popu­ lation (c)

Ό00

mil tonne No.

mil kWh Ό0 0

591 2 0 . 2 24,576 4,628 3,312

614 19.5 26,554 4,868 3,366

655 20.5 27,524 5,450 3,405

709 19.8 29,583 5,951 3 460

760 19.2 27,145 6,505 3,525

808 19.2 23,128 7,008 3,589

865 18.9 26,445 7,595 3,661

919 2 0 .1 30,030 8,275 3,729

978 22.5 33,408 9,200 3,796

1,031 24.7 36,397 9,999 3,876

1,088 24.7 32,349 10,683 3,952

1,153 24.2 31,344 12,188 4,021

1,218 26.4 33,730 13,859 4,079

1,292 28.6 39,890 15,174 4,143

1,340 27.7 40,766 15,545 4,210

1,400 30.0 36,867 16,722 4,266

1,482 31.5 41,378 18,043 4,326

1,556 32.6 45,156 18,699 4,403

1,648 34.3 48,453 20,874 4,490

1,740 34.0 49,397 23,341 4,572

1 850 32.5 48,020 24,199 4,647

1,948 31.2 47,913 26,081 4,696

2,049 29.9 50,251 27,357 4,736

Income of unincorporated enterprises.

Table B-2 — P R O D U C T IO N A N D E C O N O M IC D A TA — V IC T O R IA

Year

1951- 52

1952- 53

1953- 54

1954- 55

1955- 56

1956- 57

1957- 58

1958- 59

1959- 60

1960- 61

1961- 62

1962- 63

1963- 64 1964- 65 1965- 66

1966- 67 1967- 68 1968- 69 1969- 70

1970- 71

1971- 72 1972- 73 1973- 74(e·)

Commodity Production

Whole Pota-

Sawmill output Aus- Brown Crude Natural

Woo1 Meat milk Wheat toes tralian

grown timber

coal (a)

oil gas

mil Ό00 mil mil Ό00 Ό00 mil Ό00 mil

kg tonne 1 tonne tonne m3 tonne m3 m3

102 272 2,033 1.3 182 822 8 . 0

115 301 1,986 1.4 136 760 8.3

101 298 2,159 1.5 218 800 8.4

115 327 2,442 1.3 211 855 9.9

124 313 2,628 1 .1 166 829 1 0 . 6

136 318 2,672 1 .0 232 808 1 1 . 0

135 382 2,573 0.9 256 817 11.1

136 414 2,652 1 .2 264 812 1 2 .6

147 414 2,681 1. 1 247 827 14.3

146 369 2,715 1 .8 184 759 16.0

150 442 2,871 1 .5 2 0 0 705 17.1

144 486 3,038 1 .8 260 753 18.1

152 495 3,162 2 .1 204 756 19.1

164 515 3,394 2 .1 187 776 2 0 . 0

167 523 3,417 1 . 6 246 767 2 2 . 0

172 512 3,625 1.9 230 760 23.0

151 528 3,341 0 . 8 220 755 23.5

165 507 3,712 2.5 306 741 23.5 20

194 577 4,028 2.3 285 757 24.4 2,142 274

201 666 4,062 1 .0 278 837 23.2 12,124 865

198 768 3,973 1 .8 307 732 23.7 16,355 1,096

172 741 4.061 1 .2 259 775 24.1 18,179 1,472

155 583 4,014 1 . 6 254 774 26.4 20,712 1,998

Number o f sheep

Number o f cattle

Farm income (b)

Motor vehicles on register

Railway freight volume

Dwellings com­ pleted

Elec­ tricity gener­ ated

$ m Ό00

mil tonne No.

mil kWh

21.5 21.4 21.4 22.3 23.3

2.2 2.3 2.4 2.5 2.6

290 311 283 286

287

533 540 559 629 647

9 .4 24,504 2,964

9.4 21,976 3,193

9.4 22,282 3,693

10 3 24,620 4,151

9.8 23,925 4,647

25.8 27.1 26.9 26.6 26.6

2.8 2.8 2.7 2.6

2.9

304 243 286

(rf)301 339

675 712 750 803 845

9.6 9.1 9.5 9.9 11.2

21,082 22,471 25,763 26,219

26,277

4,991 5,321 5,704 6,198

6,556

27.5 27.5 28.4 30.4

31.0

3.2 3.2 3.3 3.3 3.4

271 303 378 394 336

877 931 989 1,048

1,090

10.6 11.1 12.4 12.8 12.4

23,039 24,100 27,069

31,495 30,435

6,803 7,182 7,888 8,635 9,741

31.2 27.9 30.2 33.2

33.8

3.5 3.5 3.9

4.5 5.1

375 231 325 347

305

1,132 1,189 1,249 1,315

1,379

12.3 11.3 11.5 12.1

12.7

32,264 34,278 36,506 38,694 37,266

10,713 11,419 12,716 n.a.

n.a.

29.5 5.5

24.2 5.5

25.9 5.9

371 428 566

1,442 1,517 1,609

11.8 11.5 11.4

35,718 38,183 37,689

n.a. n.a. n.a.

Mean popu­ lation (e )

Ό00

2,310 2,372 2,423 2,485 2,556

2,626 2,687 2,750 2,820 2,893

2,957 3,012 3,073 3,136 3,194

3,249 3,300 3,357 3,421

3,481

3,536 3,579 3,620

(a) Y ear ended December prior to 1954-55. (d) New series. Source: A ustralian Bureau of Statistics.

(b) Incom e of unincorporated enterprises. (c) Includes Aborigines since 1961-62. (e) Subject to revision. n.a. N ot available.

Table B-3 — PR O D U C T IO N A N D E C O N O M IC D A T A — Q U E E N SL A N D

Commodity Production

Year

Wool Meat Whole milk Wheat Sugar

Sawmill output Aus­ tralian grown

timber

Black coal

Lead («)

Copper concen­ trate («)

mil ΌΟΟ mil mil Ό00 Ό00 mil •000 Ό00

kg tonne 1 tonne tonne m3 tonne tonne tonne

1951-52 . 63 215 824 0 . 2 718 688 2.7 33.7 51.2 1952-53 . 74 298 1,299 0.5 954 673 2.7 40.2 63.7 1953-54 . 79 305 1,136 0.3 1,244 681 2.7 36.9 147.5 1954-55 . 80 320 1,254 0.4 1,327 682 2 . 8 41.5 161.1 1955-56 . 88 343 1,284 0.4 1,159 671 2.7 41.5 148.91956-57 . 103 368 1,148 0 . 2 1,195 644 2 . 8 44.8 154.1 1957-58 . 93 324 959 0 . 2 1,281 633 2.7 51.8 r/201 4 1958-59 . 99 391 1,175 0.4 1,381 618 2.7 61.2 269 1 1959-60 . 107 336 1,149 0.4 1,241 648 2.7 54.2 349 7 1960-61 . 107 329 968 0.3 1,346 618 2.7 57.2 278.41961-62 . 105 355 1,091 0.3 1,342 497 3.0 42.1 315 1 1962-63 . 106 386 1,115 0.5 1,805 536 2.9 61 3 350 3 1963-64 . 116 406 1,091 0 . 6 1,681 580 3.8 67.6 339 4 1964-65 . 114 414 1,048 0 . 6 1,892 580 4 .0 59.5 296 6 1965-66 . 88 399 1,006 0.5 1,921 550 4.6 47.9 359.81966-67 . 92 374 1,083 1 . 0 2,247 512 4.8 55.7 268 0 1967-68 . 103 399 988 0.7 2,258 510 5.6 85.9 331 2 1968-69 . 112 437 781 1 .1 2,656 566 7.6 106 0 361 7 1969-70 . 89 404 871 0.4 2,123 524 9.6 138.1 395 3 1970-71 . 77 390 771 0 .1 2,385 525 1 1 .1 152.4 503.11971-72 . 83 445 768 0.7 2,670 552 14.1 128.1 485 6 1972-/3 . 71 474 737 0.4 2,714 581 18.8 115.1 612 5 19/3— 74(e) 64 418 654 0.5 2,405 554 19.9 126.0 702.0(a) Year ended December. (b) Income of unincorporated enterprises (e) Subject to revision, FSource: A ustralian Bureau of Statistics.(d) New series.

Table B-4 — PR O D U C T IO N A N D E C O N O M IC D A T A — SO U T H A U S T R A L IA

Year

Wool Meat Whole milk Wheat

mil Ό00 mil mil

kg tonne 1 tonne

1951-52 . 62 70 394 0.7

1952-53 . 72 91 383 0 .9

1953-54 . 66 88 387 0 . 8

1954-55 . 71 94 413 0 .9

1955-56 . 79 92 411 0 . 8

1956-57 . 86 92 409 0.9

1957-58 . 84 106 367 0 .4

1958-59 . 85 109 374 0 .9

1959-60 . 90 107 357 0.3

1960-61 . 81 90 396 1.3

1961-62 . 94 99 435 0 .9

1962-63 . 94 109 434 1 .0

1963-64 . 96 106 444 1.5

1964-65 . 98 107 465 1 .4

1965-66 . 105 115 448 1 .1

1966-67 . 109 120 449 1.5

1967-68 . 99 120 404 0 .7

1968-69 . 108 111 468 2.3

1969-70 . 125 140 483 1 .6

1970-71 . 118 158 470 0 . 8

1971-72 . 118 165 458 1 .4

1972-73 . 101 168 424 0 . 8

1973-74(

Commodity Production

Barley Wine

Sawmill output Aus­ tralian grown timber

Iron ore Copper N at­ ural

gas

Number o f sheep

Number o f cattle

mil mil Ό00 Ό00 mil

tonne 1 m3 tonne tonne m3 mil mil

0.4 116 158 2,449 11.5 0.4

0 . 6 103 162 2,738 1 2 . 0 0.5

0 . 6 107 161 2,924 1 1 .8 0.5

0.4 87 189 3,105 1 2 . 8 0.5

0 . 6 84 245 3,659 13.6 0 . 6

0 . 8 109 2 2 0 3,457 15.0 0 . 6

0.4 120 196 3,420 15.2 0 . 6

0.9 114 285 3,482 15.6 0 . 6

0.3 98 299 3,496 14.0 0.5

1 . 0 114 2 1 0 4,062 15.0 0 . 6

0.5 140 257 3,508 16.4 0.7

0.4 90 333 4,266 15.7 0 .7

0 . 6 124 335 4,397 16.4 0.7

0 . 6 128 328 4,470 17.3 0.7

0.4 109 330 4,883 18.0 0.7

0.5 135 316 4,652 17.9 0.7

0.3 137 302 5,794 16.4 0.7

0.7 164 262 6,455 18.4 0.9

0.7 199 266 7,454 831 254 19.7 1 . 0

0.7 169 287 7,401 4,578 861 19.2 1 . 2

1 .0 182 294 6,326 8,626 995 18.0 1.5

0.5 180 300 6,874 9,661 1,122 15.7 1 . 6

0 . 8 164 259 6,065 n. a. 1,255 16.4 1.7

Farm income (a)

M otor vehi­ cles on register

Rail­ way freight vol­

ume

Dwell­ ings com­ pleted

Elec­ tricity gener­ ated

Mean popu­ lation (b)

$m Ό00

mil tonne No.

mil kWh •ooo

112 192 4 .0 7,711 788 743

141 206 4.2 8,998 822 667

105 218 4.5 7,621 955 786

93 230 4.6 7,428 1,119 808

96 248 4.5 7,807 1,204 835

132 262 4 .6 7,423 1,315 861

67 275 4 .2 7,978 1,581 8 8 6

106 291 4.3 8,783 1,583 908

(c)6 6 310 4.1 9,579 1,864 934

109 318 4.6 10,263 1,898 957

87 329 4.7 9,729 2,173 979

92 344 4 .6 10,332 2,335 999

145 365 5.3 11,477 2,547 1,023

140 387 5.2 12,870 2,863 1,052

110 403 4.9 12,209 3,227 1,082

151 417 5.0 10,836 3,402 1,103

61 432 4.5 8,817 3,890 1,115

141 457 5.1 8,695 4,156 1,131

119 478 6 . 0 10,161 c/4,615 1,149

93 497 6 .1 12,308 4,931 1,168

156 516 6 .1 13,245 5,051 1,184

205 547 5.8 13,194 5,499 1,196

398 578 6.7 13,008 6,119 1,211

(a) Includes N orthern Territory. Incom e of unincorporated enterprises. (6) Includes Aborigines since 1961-62. (c) N ew series.

id) Includes N orthern T erritory from July 1969. (e) Subject to revision. n.a. N o t available.

Source: A ustralian Bureau of Statistics.

Table B-5 — PR O D U C T IO N A N D E C O N O M IC D A T A — W E S T E R N A U S T R A L IA

Year

1951- 52 .

1952- 53 .

1953- 54 .

1954- 55 .

1955- 56 .

1956- 57 .

1957- 58 . 1958- 59 .

1959- 60 .

1960- 61 .

1961- 62 .

1962- 63 .

1963- 64 .

1964- 65 .

1965- 66 .

1966- 67 .

1967- 68 . 1968- 69 .

1969- 70 .

1970- 71 .

1971- 72 .

1972- 73 . 1973- 74(c)

Commodity Production

Whole

Sawmill output Aus- Black Iron Nickel

Number o f

Wool Meat milk Wheat Apples tralian grown timber

Gold coal ore concen­

trate

sheep

mil Ό00 mil mil Ό00 Ό00 mil Ό00 Ό00 Ό00

kg tonne 1 tonne tonne m3 gram tonne tonne tonne mil

55 65 223 1.1 22 468 18.8 898 37 1 2 . 2 58 73 227 1 . 0 31 527 2 2 . 2 785 228 12.5 61 71 228 1 .1 22 571 24.0 976 665 13.1 59 76 247 0 .9 32 592 24.0 998 540 13.4 71 80 253 1.5 29 611 23.2 894 344 14.171 81 259 0.9 32 491 23.7 858 424 14 9 72 85 243 0.9 26 476 24.1 872 584 15 7 76 98 238 1 . 6 30 500 24.7 924 742 16 2 77 101 262 1 . 6 22 470 24.7 926 947 16 4 87 101 266 1.7 39 441 24.5 760 1,387 17.287 105 265 1 . 8 22 459 24.6 949 1,432 18 3 84 111 255 2 . 0 38 439 24.1 952 1,360 18 7 98 115 260 1.4 25 467 21.3 941 1,385 70 7 94 105 282 1.7 45 488 19.8 985 2,359 77 4 112 115 282 2 . 8 30 503 18.3 1,063 6,901 24.4124 115 253 2 . 8 46 481 16.8 1,105 12,252 27 4 136 130 252 2.9 39 500 15.6 1,079 11,045 38 30 2 171 152 265 3.1 55 444 13.5 1,125 23,8P 52 32 9 153 168 254 1 .8 50 450 11.1 1,182 34,813 161 33 6 159 160 256 3.0 60 449 10.7 1,194 46,239 304 34.7178 202 255 2 . 2 52 407 1 0 . 8 1,188 53,243 299 34 4 147 213 242 2 . 0 56 405 9.3 1,154 61,808 268 30 9 152 190 241 4 .2 53 408 7.2 1,197 82,774 323 32.5 Number

o f

cattle

mil

0.9 0. 8 0.8 0.9 0.9

1.0 1.0 1.0 1.0

1.1

1.2 1.3 1.3 1.3 1.3

1.4 1.4 1.5 1.7

1.8

2.0 2.2 2.3

Farm income (a)

Motor vehi­ cles on register

Rail­ way freight vol­

ume

Dwell­ ings com­ pleted

Elec­ tricity gener­ ated

Mean popu­ lation (6)

$m Ό00

mil tonne No.

mil kWh Ό0 0

73 133 3.1 6,792 530 590

69 142 2.7 8,065 569 611

66 154 3.3 7,839 627 631

39 169 3.5 9,108 702 648 61 175 3.9 8,344 753 667 49 181 4.3 5,395 782 681 21 188 3.7 6,367 829 694 45 198 4.0 6,058 876 706 (d) 55 212 4.6 6,260 938 717 58 225 4.9 6,413 1,036 73065 242 5.4 6,347 1,110 756 64 257 4.9 7,235 1,220 111 76 274 5.3 8,571 1,318 799 66 285 5.3 9,286 1,504 817 123 304 6.5 8,889 1,639 837115 326 8 . 0 10,014 1,903 863 104 352 9.1 12,250 2,216 896 129 379 9.1 16,331 2,665 936 45 412 10.9 19,529 n.a. 975 103 446 13.5 16,934 n.a. 1,014106 466 13.9 14,882 n.a. 1,047 166 491 13.7 14,700 n.a. 1,064 525 527 14.8 16,259 n.a. 1,085Source: A ustralian Bureau of Statistics. (c) Subject to revision. (d) New series. n.a. N ot available.

Table B-6 — P R O D U C T IO N A N D E C O N O M IC D A T A — T A S M A N IA

Year

1951- 52 .

1952- 53 .

1953- 54 .

1954- 55 .

1955- 56 .

1956- 57 .

1957- 58 .

1958- 59 .

1959- 60 .

1960- 61 .

1961- 62 .

1962- 63 .

1963- 64 .

1964- 65 .

1965- 66 .

1966- 67 .

1967- 68 .

1968- 69 .

1969- 70 .

1970- 71 .

1971- 72 .

1972- 73 .

1973- 74(e)

Commodity Production

Whole Pot a-

Sawmill output Aus- Iron

concen- Lead Copper Zinc and Tung­

sten

Wool Meat milk toes Apples tralian

grown timber

Irate (a)

to) to) concen­

trates to)

concen­ trate

mil Ό00 mil Ό0 0 Ό00 Ό00 Ό00 Ό00 Ό00 •000

kg tonne 1 tonne tonne m3 tonne tonne tonne tonne tonne

9 27 192 154 93 299 8 .1 7.9 20.9 1,427

9 28 187 117 72 259 8 . 6 10.1 2 2 . 8 1,480

9 25 217 147 101 279 9.6 9.3 24.2 1,937

11 30 237 103 95 331 1 1 . 0 9.7 26.6 2,050

11 31 279 80 112 355 1 0 . 8 8.3 24.5 2,178

13 35 293 92 65 320 1 1 . 6 8.5 28.7 2,035

13 38 294 104 126 308 1 1 . 8 10.7 26.6 1,251

15 43 301 88 95 345 13.2 1 1 .1 29.6 909

15 50 319 100 105 400 13.5 11.3 28.5 1,557

14 42 291 40 107 388 12.4 11.5 27.7 2,177

16 46 333 73 149 325 10.5 1 1 . 8 32.4 1,506

16 49 357 85 120 378 1 1 . 8 14.2 39.0 1,379

15 53 378 67 162 404 1 2.1 15.9 39.4 1,424

18 52 397 58 118 420 1 2 . 0 15.5 40.9 1,670

19 52 400 78 160 420 11.3 14.9 38.9 1,840

20 54 416 75 120 411 12.4 15.5 41.7 1,668

17 53 413 81 150 413 886 1 2 .1 16.6 41 .0 1,988

21 59 465 73 135 414 1,475 1 2 . 0 16.2 40.9 2,125

22 64 470 68 145 414 2,086 11.9 17.6 41.9 2,194

22 64 450 73 141 406 1,956 1 0 . 8 23.5 38.5 2,192

21 70 451 70 112 413 2 ,2 0 2 12.5 25.3 42.0 2,624

18 77 424 78 134 416 2,361 20.4 27.9 67.1 2,430

18 67 435 63 113 414 2,305 16.9 n. a. 72.0 1,810

Number o f sheep

Farm income (6)

Motor vehi­ cles on register

Rail­ way freight vol­

ume

Dwell­ ings com­ pleted

Elec­ tricity gener­ ated

Mean popu­ lation (c)

mil mil

mil $m Ό00 tonne No. kWh Ό00

2.3 28 55 0.9 4,020 1,145 293

2 .4 31 61 0.9 3,328 1,264 302

2.5 22 65 1 . 0 2,643 1,471 309

2 . 6 29 72 1 .1 2,528 1,589 313

2.7 40 75 1 .1 2,770 1,794 318

2.9 32 79 1.1 2,864 2 ,2 1 0 325

3.3 30 84 1 .1 2,607 2,338 332

3.5 25 88 1 . 2 2,708 2,456 339

3.5 (d) 28 93 1 .2 2,672 2,532 344

3.4 25 97 1 . 2 2,662 2,632 350

3.5 28 103 1 .1 2,551 2,733 353

3.6 29 107 1 .2 2,601 3,213 358

3.6 33 114 1 .2 2,675 3.414 363

3.8 39 122 1.1 2,732 3,784 366

4.1 31 128 1 .1 2,481 3,947 370

4.3 36 134 1 .1 2,950 4,116 373

4 .4 21 141 1 . 2 3,623 3,773 377

4 .4 32 149 1.3 3,070 4,738 383

4 .6 3! 154 1.3 3,363 5,140 387

4.5 27 161 1 . 2 2,930 5,451 390

4 .2 32 168 1.3 3,028 5,778 392

3.8 52 175 1 .6 3,165 5,902 395

4 .0 58 184 1 . 8 3,542 6 ,0 1 0 399

(a) Y ear ended December, (b) Incom e of unincorporated enterprises, (c) Includes Aborigines since 1961-62. (d) New series. (e) Subject to revision. n.a. N ot available.

Source: A ustralian Bureau of Statistics.

APPENDIX C

Differences among the Economies of the States C.l The statistical comparisons in this appendix, which are derived from published sources, throw light on some of the factors underlying interstate differ­ ences in fiscal capacity. The main features revealed by this survey are summarised in Chapter 2 with particular reference to Queensland and South Australia.

Population

C .l Table C -l illustrates the uneven distribution of population among the States, with almost two-thirds of the total in New South Wales and Victoria. This proportion has gradually declined in recent years, while that of Western Australia has steadily risen. Queensland’s proportion remained fairly constant until 1971;

since then increases have been recorded. The proportion of South Australia has been relatively constant in recent years, while Tasmania, the least populous State, shows a continuing slow decline.

Table C -l — POPULATION OF STATES AND PROPORTIONAL DISTRIBUTION {a)

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Ό0 0 ’0 0 0 Ό00 ’0 0 0 Ό00 ’0 0 0 "000

Population as at 30 June 1974. 4,738.4 3,635.9 1,968.9 1,218.1 1,095.2 399.9 13,056.4 Population as at 30 June 1973 . 4,702.5 3,586.6 1,914.9 1,199.1 1,068.5 396.0 12,867.6 Mean Population 1973-74 . 4,735.7 3,620.2 1,944.7 1,2 1 0 . 8 1,084.8 398.8 12,995.0

D ISTRIBU TIO N OF PO PU LA TIO N (a)

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

30 June 1974 . . . 36.29 27.85 15.08 9.33 8.39 3.06 1 0 0 . 0 0

30 June 1973 . . . 36.55 27.87 14.88 9.32 8.30 3.08 1 0 0 . 0 0

30 June 1972 . . . 36.68 27.90 14.71 9.34 8.29 3.08 1 0 0 . 0 0

30 June 1971 . . . 36.73 27.96 14.59 9.37 8.23 3.12 1 0 0 . 0 0

30 June 1970 . . . 36.78 28.01 14.58 9.42 8.06 3.15 1 0 0 . 0 0

30 June 1969 . . . 36.80 28.05 14.61 9.44 7.91 3.19 1 0 0 . 0 0

30 June 1968 . . . 36.85 28.10 14.62 9.48 7.74 3.21 1 0 0 . 0 0

30 June 1967 . . . 36.92 28.15 14.61 9.54 7.56 3.22 1 0 0 . 0 0

30 June 1966 . . . 37.02 28.13 14.63 9.57 7.41 3.24 1 0 0 .0 0

30 June 1961 . . . 37.52 28.06 14.62 9.30 7.15 3.35 1 0 0 . 0 0

30 June 1954 . . . 38.29 27.43 14.75 8.92 7.16 3.45 1 0 0 . 0 0

(a) Includes full-blood Aborigines, except for 30 June 1954.

122

C.3 Table C-2 shows considerable variation between States in rate of popula­ tion growth. The differences between States arise to a large extent from differences in rate of growth from net migration. In all States except New South Wales, the overall rate increased in 1973-74. Queensland and Western Australia recorded

the highest growth rates in 1973-74, substantially greater than those in the other States, while New South Wales and Tasmania had the lowest growth rates. The highest growth rates from net migration in 1973-74 occurred in Queensland and Western Australia. New South Wales again recorded a small loss from net migration.

Table C-2 — POPULATION OF STATES: COMPARATIVE RATES OF GROWTH

New South Wales

Victoria Queens­ land South Western Australia Australia

Tasmania Australia (a)

Increase 1973-74 . . . 35,900 49 300 54,000 19,000 26,700 3,900 206,700

Proportional increase, per cent 0.76 1.37 2.82 1.58 2.50 0.98 1.57

N atural increase 1973-74 . 44,900 35,700 20,700 10,200 12,400 3,800 133,500

Proportional increase, per cent 0.95 1 . 0 0 1.08 0.85 1.16 0.96 1 . 0 2

Net migration 1973-74 . . (6)9,000 13,600 33,300 8,800 14,300 100 73,200

Proportional increase, per cent (c) 0.19 0.37 1.74 0.73 1.34 0 . 0 2 0.55

Proportional increase 1972-73, per cent . . . . 0 . 8 8 1 .11 2.44 1.06 1.45 0.97 1.33

Proportional increase 1971-72, per cent . . . . 1.31 1.28 2.31 1.09 2 . 2 0 0.46 1.60

Average annual rate of increase 1966-71, per cent. . . 1 . 6 6 1.69 1.76 1.40 3.97 1 . 0 0 1.92

Average annual rate of increase 1961-66, per cent. . . 1.57 1.90 1.84 2.41 2.58 1.18 1.91

Average annual rate of increase 1954-61, per cent. . . 1.94 2.58 2.04 2.83 2.03 1.82 2.26

(a) Includes A ustralian Capital Territory and N orthern Territory. (b) M igration loss. (c) Decrease.

C.4 Table C-3 shows the population density in each State (number of persons per square kilometre), and percentage of the population residing in urban and rural areas. ‘Urban’ is defined as population clusters of 1,000 or more persons (see Bureau of Census and Statistics—Census of Population and Housing, refer­

ence number 2.72 of 18 April 1972). New South Wales, Victoria and South Australia are the most highly urbanised States. Tasmania has the highest propor­ tions of any State in the areas classified as ‘rural’ and ‘other urban’; and only one-third of its population is in the major urban area. Queensland has less than

half of its population in the major urban area, but slightly more than one-third in other urban areas.

C.5 Table C-4 reveals some significant differences in age distribution. Tas­ mania, despite its low population growth, has the youngest population in terms of the combined pre-school and school-age sections of the community; it has the lowest proportion in the working-age group 19 to 64 and, with Western Australia,

a significantly lower proportion of elderly people (65 and over) than the other

123

States. New South Wales and Victoria have the lowest proportions of population in the school-age group, and the highest proportions in the working-age group.

Table C-3 — POPULATION OF STATES: DENSITY AND URBANISATION

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania S ix States

Density (number of persons per square kilometre as at 30

June 1974) . . . 5.91 16.23 1.14 1.24 0.43 5.90 2.06

Urbanisation (n) as at 30 June 1971 (percentage of popula­ tion residing in urban and rural areas)—

Urban—major . . . 69.1 71.6 44.8 69.0 62.3 33.3 64.6

other . . . 19.5 16.1 34.5 15.6 19.2 40.9 2 1 . 0

Rural . . . . 11.3 1 2 . 2 20.5 15.3 18.2 25.7 14.3

Migratory . . . 0 . 1 0 . 1 0 . 2 0.1 0.3 0 . 1 0 . 1

100.0 1 1 0 0 .0 1 0 0 .0 1 0 0 .0 100.0 1 0 0 .0 1 0 0 .0

(a) Figures from 1971 Census. ‘U rban’ previously consisted of ‘m etropolitan’ and ‘other’. M etropolitan referred to capital cities and other to population clusters of 1,000 or more persons having a minim um density of 500 persons per square mile. U rban is now

defined as (i) m ajor urban— population clusters of 1 0 0 ,0 0 0 or more persons and (ii) other urban— population clusters of 1,000 to 99,999 persons.

Table C-4 — POPULATION OF STATES: PROPORTIONAL AGE DISTRIBUTION 30 JUNE 1973

Age Last Birthday New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six

States

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

0-4 . . . . 9.38 9.83 9.99 9.12 1 0 .2 2 9.98 9.66

5-18 . . . 24.70 25.82 26.63 26.55 27.10 28.09 25.78

19-64 . . . 57.35 55.91 54.26 55.75 55.12 53.80 56.04

65 and over . . 8.57 8.44 9.12 8.58 7.56 8.13 8.52

1 0 0 . 0 0 1 0 0 . 0 0 1 0 0 . 0 0 1 0 0 . 0 0 1 0 0 . 0 0 1 0 0 . 0 0 1 0 0 . 0 0

Labour Force and Industry

C.6 Tables C-5 to C-7 show labour force data for each State at the census date 30 June 1971.

C.7 Table C-5 shows that persons in the labour force as a percentage of State population follow the same order as the percentage in the working-age group shown in Table C-A except for South Australia and Western Australia, where the positions are reversed. The percentages for males show that they follow the same order as for the total labour force except for the reversed positions of Victoria and Western Australia; for females the order changes considerably due to the

124

higher percentage of Victoria over New South Wales and South Australia over Western Australia.

Table C-5 — LABOUR FORCE AS PERCENTAGE OF STATE POPULATION 30 JUNE 1971

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

Persons . . . . 42.60 42.06 39.62 41.40 41.77 39.27 41.73

Males . . . . 57.75 56.52 55.26 56.35 56.62 54.99 56.73

Females . . . . 27.36 27.62 23.70 26.49 26.09 23.35 26.59

C.8 The figures in Table C-6, which express the number of State government employees as a percentage of labour force, show a tendency towards inverse relationship to the size of State populations given in Table C -l. In general, States with larger populations have smaller proportions of their populations in State government employment.

Table C-6 — STATE GOVERNMENT EMPLOYEES AS PERCENTAGE OF LABOUR FORCE

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

30 June 1971 . . . 11.96 11.41 13.25 15.46 15.45 16.57 12.73

C.9 Differences in the industrial structures of the States are shown in Table C-7. Victoria is the most industrialised State in terms of the percentage of its labour force in ‘manufacturing’, followed in order by New South Wales, South Australia, Tasmania, Queensland and Western Australia. The least industrialised

States have the highest proportions of labour force in the ‘primary’, ‘mining and quarrying’, and ‘building and construction’ industries; they also have the highest proportion of rural population as shown in Table C-3.

C.10 Table C-8 shows farm income as a percentage of total personal income. The average figures for the five-year period 1965-66 to 1969-70, which were lower in every State than in the earlier periods, show marked differences between the States with Queensland, South Australia and Western Australia having much higher

percentages than the other States. Percentages for single years are greatly affected by seasonal fluctuations in output and prices. However, the percentage figures for all States show considerable increases in the last two years over the levels of 1971-72 and 1970-71. For 1973-74 the comparative index figures for Queensland,

South Australia and Western Australia remained much higher than those of other States. The percentage in Western Australia more than doubled over the corres­ ponding percentage in 1972-73. In 1973-74 the percentages in New South Wales

125

Table C-7 — LABOUR FORCE: PROPORTIONAL DISTRIBUTION BY INDUSTRY 30 JUNE 1971

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Per cent Per cent Per cent Per cent Per cent Percent Per cent

Primary . . . . 5. 8 6. 5 1 1 .1 8 . 4 9 . 1 9 . 0 7 . 3

Mining and quarrying . . 1.4 0.4 1 .8 0 . 8 4 .0 3.0 1 .4

Manufacturing . . . 24.4 27.3 16.2 24.0 14.7 2 0 . 6 23.1

Electricity, gas, water, etc. . 1.9 1 . 8 1.4 1 .8 1.1 2.4 1.7

Building and construction . 7.3 6.7 9.2 7.3 1 0 . 2 8.4 7.7

Transport, storage and com­ munication . . . 7.3 6.5 7.4 6 . 6 7.9 7.0 7.1

Commerce, finance, property, etc............................................. 25.9 25.2 25.9 25.2 25.7 2 2 . 8 25.5

O t h e r ......................................... 24.4 24.0 25.2 24.2 25.3 24.8 24.5

Unemployed . . . 1 . 6 1 . 6 1 . 8 1.7 2 . 0 2 . 0 1.7

1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0

Table C-8 — FARM INCOME AS PERCENTAGE OF TOTAL PERSONAL INCOME

New South Wales la)

Victoria Queens­ land South

Australia lb)

Western Australia Tas­ mania Australia

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

1973-74 . . . . 5.20 4.90 8.36 1 0 . 1 2 15.50 5.33 6.85

1972-73 . . . . 3.73 4.48 8.47 6.70 6.57 5.81 5.13

1971-72 . 1 . 6 6 4.42 7.46 5.85 4.68 4.11 3.89

1970-71 . . . 1.65 4.05 6.19 4.03 5.10 3.90 3.46

1969-70 . . . 3.03 5.10 7.73 5.63 2.60 4.92 4.49

Average 1965-66 to 1969-70 . 3.63 5.67 9.34 6.62 7.26 5.61 5.56

Average 1960-61 to 1964-65 . 6.58 8.53 12.08 9.42 7.93 8 . 1 2 8.24

Average 1955-56 to 1959-60 . 7.85 10.15 14.14 10.38 7.46 10.83 9.67

Comparative Index (Australia = 100)

New South Wales (a)

Victoria Queens­ land South

Australia lb)

Western Australia Tas­ mania Australia

1973-74 . . . . 75.9 71.5 1 2 2 . 0 147.7 226.3 77.8 1 0 0 . 0

1972-73 . . . . 72.7 87.3 165.1 130.6 128.1 113.3 1 0 0 . 0

1971-72 . . . . 42.7 113.6 191.8 150.4 120.3 105.7 1 0 0 . 0

1970-71 . . . . 47.7 117.1 178.9 116.5 147.4 112.7 1 0 0 . 0

1969-70 . . . . 67.5 113.6 172.2 125.4 57.9 109.6 1 0 0 . 0

Average 1965-66 to 1969-70 . 65.3 1 0 2 . 0 168.0 119.1 130.6 100.9 1 0 0 . 0

Average 1960-61 to 1964-65 . 79.9 103.5 146.6 114.3 96.2 98.5 1 0 0 .0

Average 1955-56 to 1959-60 . 81.2 105.0 146.2 107.3 77.1 1 1 2 . 0 1 0 0 . 0

(a) Includes Australian Capital Territory, (b) Includes Northern Territory.

126

and Victoria remained well below the Australian average, while in Tasmania the percentage fell substantially below the Australian average for the first time in recent years.

C .ll Table C-9 shows the average for the three years ended 1973-74 of the ‘local value of production’ in primary industries per head of population. The figures are averaged in order to reduce the influence of irregular seasonal fluctua­ tions. The table also gives the average for the years 1971-72 and 1972-73 of the

‘value added’ in manufacturing establishments per head of population. The different bases are determined by the form in which the Australian Bureau of Statistics publishes these figures. Results of the census of manufacturing conducted in 1973-74 are not yet available.

Table C-9 — PRODUCTION PER HEAD OF POPULATION BY PRIMARY INDUSTRIES (EXCLUDING MINING) AND MANUFACTURING ESTABLISHMENTS

New South Wales

Victoria Queens- South Australia Western Australia

Tasmania Australia (a)

$ $ $ $ $ $ S

Primary Indus i I ding Mining)

‘Local value of production’ in primary industries per head o f population (average for three years ended 1973-74)— 95.5! 85.73 223.52 192.06 271.17 83.47 132.42

Pastoral . . . . . . 145.21 136.21 177.63 190.08 259.38 150.29 159.99

Dairying . . . . . . 32.22 70.44 39.89 40.11 29.81 73.71 44.98

Forestry . . . . . . 10.50 11.09 7.55 9.66 12.58 63.77 11.80

Other primary . . . . . 24.70 17.22 22.61 25.76 43.85 31.51 24.21

Total primary . . . . 308.14 320.69 471.20 457.67 616.79 402.75 373.40

Manufacturing Estah lishments

‘Value added’ in manufacturing establish­ ments per head of population (average for years 1971-72 and 1972-73)*— Food, beverages and tobacco . . 120.08 171.67 166.30 119.82 92.24 147.41 139.30

Textiles, clothing and footwear . . 65.87 138.05 16.84 30.07 11.27 52.95 69.29

Paper and paper products, printing . 75.06 80.56 36.51 53.20 39.31 121.10 67.02

Chemical, petroleum and coal products 95.62 77.12 26.98 29.79 43.12 42.07 65.49

Basic metal products . . . . 122.59 30.05 48.36 73.50 32.83 126.84 73.03

Transport equi pment . . . . 66.97 130.05 46.63 123.95 27.04 22.25 80.96

Other machinery and equipm ent. . 130.94 139.11 31.92 106.14 41.45 16.60 103.33

Fabricated metal products . . . 70.95 79.63 40.98 65.99 55.38 20.70 64.83

Other . . . . . . 134.14 143.69 93.13 110.93 103.65 122.78 123.78

Total manufacturing . . . 882.22 989.93 507.65 713.39 446.29 672.70 787.03

* Results of the census of manufacturing conducted in 1973-74 are not yet available. (a) Includes A ustralian Capital Territory and N orthern Territory.

C.12 Table C-9 presents an incomplete picture of the industrial structure of each State as the table covers the productivity activity of only one-third of the total labour force. By comparison with Table C-7, figures for local value of primary production in Table C-9 show changes in the order of the States, due to

the reversed positions of Queensland and Western Australia and of South Australia and Tasmania.

C.13 The figures in Table C-9 indicate the differences between States in the relative importance of various types of primary industries. In Queensland, South Australia and Western Australia more than 80 per cent of the total local value of

127

primary production per head of population is contributed by crops and pastoral activities. In Queensland, crops contribute relatively more to total local value of primary production than in any other State. Dairying makes a larger per capita contribution in Victoria and Tasmania than in the other States, both absolutely

and relatively to total primary production. For forestry the per capita figure for Tasmania is much higher than that of any other State.

C.14 The figures for value added per capita in manufacturing establishments given in the second section of Table C-9 show the States in the same order as the percentages of labour force employed in manufacturing shown in Table C-7. How­ ever, there are considerable differences between States in the relative importance of the various manufacturing industries. South Australia exceeds the other States

in the percentage of value added in manufacturing which is contributed by trans­ port equipment and other machinery and equipment. In Tasmania the proportion of value added in these fields and in fabricated metal products is far below that in the other States. Paper and paper products and basic metal products form a larger proportion in Tasmania than in the other States. New South Wales has the highest proportion in chemical, petroleum and coal products; Victoria the highest propor­ tion in the textiles, clothing and footwear group and the smallest proportion in basic metal products; Queensland the highest proportion in the food, beverages and tobacco group; and Western Australia the highest in fabricated metal products.

C.15 The figures in Table C-10, the latest figures available, indicate some considerable differences between States in the size structure of rural holdings. Victoria and Tasmania, which are the two smallest States in area, have very small proportions of holdings in the larger sizes. More than half of the number of hold­ ings in Western Australia exceed 500 hectares, and Queensland has by far the

largest proportion of holdings in the largest size range (over 5,000 hectares). Queensland and Western Australia have relatively small proportions in the smallest size group (under 50 hectares).

Table C-10 — RURAL HOLDINGS: PROPORTIONAL DISTRIBUTION BY SIZE OF HOLDING AT 31 MARCH 1973

Number o f holdings

Size o f holding (hectares) New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Under 50 . . .

Per cent 28.9 Per cent 36.1

Per cent 2 2 . 6 Per cent 42.5

Percent 20.4 Percent 40.9

Per cent 31.1

51 to 200 . . . 2 1 . 0 34.0 33.7 14.1 13.8 37.7 26.0

201 to 500 . . . 2 0 . 8 18.9 16.3 16.9 13.7 12.4 18.1

501 to 1,000 . . . 14.4 7.7 7.0 13.0 17.0 4.2 10.9

1,001 to 2 ,0 0 0 . . . 8 .1 2.5 4.9 7.8 21.9 2.7 7.0

2,001 to 5,000 . . . 4 .0 0 . 6 5.5 3.8 9.6 1.4 3.7

Over 5,000 . . . . 2 . 8 0 . 2 1 0 . 0 1 . 9 3 . 6 0 . 7 3 . 2

Total . . . 1 0 0 . 0 1 0 0 .0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 .0

128

Table C - l l — FACTORIES: PROPORTIONAL DISTRIBUTION BY SIZE OF FACTORY— 1968-69

Number o f factories

Size o f factory tpersons employed) New

South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

Less than 5 . . . . 34.0 32.0 38.7 40.0 41.0 35.1 34.9

5 to 9 . . . . 21.5 21.3 2 2 . 6 2 0 . 1 2 1 . 2 25.3 21.5

10 to 19 . . . . 18.0 18.0 16.4 15.0 15.9 17.4 17.4

20 to 49 . . . . 14.1 14.6 11.7 12.9 12.7 1 2 . 2 13.7

50 to 99 . . . . 5.7 6.5 4.8 5.5 4.9 4.7 5.8

100 or more . . . . 6. 7 7. 6 5. 8 6. 5 4. 3 5. 3 6. 7

Total . . . 1 0 0 . 0 1 0 0 .0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0

Table C-12 — PERSONAL INCOME PER HEAD OF POPULATION

New South Wales (a)

Victoria Queens­ land South

Australia (b)

Western Australia Tas­ mania Australia

$ $ $ $ $ $ $

1973-74 . . . . 3,241 3,193 2,855 3,004 3,123 2,728 3,123

1972-73 . . . . 2,682 2,668 2,403 2,372 2,374 2,266 2,569

1971-72 . . . . 2,373 2,374 2,1 00 2,093 2,161 1,987 2,278

1970-71 . . . . 2,161 2,161 1,828 1,846 1,995 1,774 2,057

1969-70 . . . . 1,947 1,988 1,657 1,727 1,774 1,628 1,871

Average 1965-66 to 1969-70 . 1,676 1,728 1,468 1,483 1,567 1,423 1,625

Average 1960-61 to 1964-65 . 1,254 1,302 1,111 1,137 1,057 1,057 1,227

Average 1955-56 to 1959-60 . 983 1,030 881 928 831 863 961

Comparative Index (Australia — 100)

New South Wales (a)

Victoria Queens­ land South

Australia (6)

Western Australia Tas­ mania Australia

1973-74 . . . . 103.8 1 0 2 .2 91.4 96.2 1 0 0 . 0 87.4 1 0 0 .0

1972-73 . . . . 104.4 103.9 93.5 92.3 92.4 8 8 . 2 1 0 0 .0

1971-72 . . . . 104.2 104.2 92.2 91.9 94.9 87.2 1 0 0 .0

1970-71 . . . . 105.1 105.1 88.9 89.7 97.0 8 6 . 2 1 0 0 .0

1969-70 . . . . 104.1 106.3 8 8 . 6 92.3 94.8 87.0 1 0 0 .0

Average 1965-66 to 1969-70 . 103.1 106.3 90.3 91.3 96.4 87.6 1 0 0 .0

Average 1960-61 to 1964-65 . 1 0 2 .2 106.1 90.5 92.7 8 6 .1 8 6 .1 1 0 0 .0

Average 1955-56 to 1959-60 . 102.3 107.2 91.7 96.6 86.5 89.8 1 0 0 .0

(a) Includes Australian Capital Territory, (b) Includes N orthern Territory.

129

C.16 Table C— 11 shows for each State for the year 1968-69 the distribution of factories by size based on the number of persons employed. This information is not yet available for later years, nor is a comparable distribution for ‘manufacturing establishments’ as currently defined by the Australian Bureau of Statistics (see paragraph C .ll above). The information in Table C - ll is therefore not commen­

surate with the manufacturing establishments data in Table C-9. Table C - ll shows Queensland, Western Australia and Tasmania as having comparatively small proportions of factories in the larger size categories (50 or more employees), and in these categories the figure for Victoria is larger than that for New South Wales. Queensland, South Australia and Western Australia are notable for the comparatively large proportion of factories in the smallest size group (under 5 employees).

Income

C.17 Table C-12 compares personal income per head of population for all States. The table shows figures for each of the five years 1969-70 to 1973-74 and five-year averages over the period 1955-56 to 1969-70 (the averaging serves to reduce the effect of seasonal and other fluctuations in relativities between States in particular years). The figures for New South Wales and Victoria are well above those of other States, with Tasmania the lowest since the period 1960-61 to 1964-65. For 1973-74, the comparative index figures for South Australia and Western

Table C-13 — AVERAGE WEEKLY EARNINGS PER EMPLOYED MALE UNIT

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Australia (a)

$ $ $ $ $ $ $

1973-74 . . . . 120.80 118.40 112.60 110.80 115.40 110.30 118.00

1972-73 . . . . 104.30 102.50 97.00 93.00 99.00 94.40 101.50

1971-72 . . . . 95.90 93.60 87.00 85.30 93.70 86.80 93.00

1970-71 . . . . 87.30 86.40 78.00 77.20 84.90 78.50 84.80

1969-70 . . . . 78.50 78.40 69.40 70.30 75.70 70.90 76.30

Average 1965-66 to 1969-70 . 67.88 68.38 60.80 61.36 64.46 62.18 65.89

Average 1960-61 to 1964-65 . 51.32 50.92 45.26 46.74 45.06 46.78 49.42

Average 1955-56 to 1959-60 . 41.20 40.69 36.11 37.86 36.06 38.21 39.62

Com parative Index (Australia — 100)

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Australia (a)

1973-74 . . . . 102.4 100.3 95.4 93.9 97.8 93.5 1 0 0 . 0

1972-73 . . . . 1 0 2 .8 1 0 1 . 0 95.6 91.6 97.5 93.0 1 0 0 . 0

1971-72 . . . . 103.1 1 0 0 . 6 93.5 91.7 1 0 0 .8 93.3 1 0 0 . 0

1970-71 . . . . 102.9 101.9 92.0 91.0 1 0 0 .1 92.8 1 0 0 . 0

1969-70 . . . . 102.9 1 0 2 .8 91.0 92.1 99.2 92.9 1 0 0 .0

Average 1965-66 to 1969-70 . 103.0 103.8 92.3 93.1 97.8 94.4 1 0 0 . 0

Average 1960-61 to 1964-65 . 103.8 103.0 91.6 94.6 91.2 94.7 1 0 0 . 0

Average 1955-56 to 1959-60 . 104.0 102.7 91.1 95.6 91.0 96.8 1 0 0 .0

(a) Includes Australian Capital Territory and Northern Territory.

130

Australia showed notable increases, with personal income per head of population in Western Australia rising to equality with the Australian average.

C.18 The figures of average weekly earnings shown in Table C-13 supplement those for personal income per head of population in Table C-12. Variations between States are not so large as in Table C-12. New South Wales and Victoria are above the Australian average throughout, but Victoria’s comparative position

has declined in recent years. During the period of the table the comparative position of Queensland has improved; that of South Australia, after declining from its position of the 1950’s and 1960’s, shows a relative increase in 1973-74. The com­

parative index for Western Australia, after rising above the Australian average in 1970-71 and 1971-72, fell below it in 1972-73 and 1973-74. Tasmania occupied the lowest position in 1973-74, slightly below South Australia.

C.19 Additional information on comparative levels of personal income is given in Table C-14, which shows personal income tax payable per head of population up to 1972-73, the latest year for which this information is available (one year earlier than data in Tables C-12 and C-13). In Table C-14 differences

between the States are considerably greater than in Tables C-12 and C-13, because of factors such as the size and distribution of incomes and allowable deductions, which affect the amount of income tax assessed per head in each State. Levels

Table C-14 — PERSONAL INCOME TAX PAYABLE PER HEAD OF POPULATION

New South Wales (a)

Victoria Queens­ land South

Australia (b)

Western Australia Tas­ mania Australia

$ $ $ $ $ $ $

1972-73 . . . . 332.99 329.13 277.87 270.69 293.18 253.23 312.16

1971-72 . . . . 322.45 307.14 250.68 252.18 289.51 239.55 295.82

1970-71 . . . . 271.15 260.53 198.09 205.42 240.75 202.72 246.73

1969-70 . . . . 250.40 248.49 178.09 196.70 231.77 183.60 230.65

1968-69 . . . . 215.52 213.00 157.95 169.75 210.47 159.39 199.85

Average 1965-66 to 1969-70 . 196.36 200.44 144.76 155.82 184.06 148.33 183.61

Average 1960-61 to 1964-65 . 118.26 121.59 90.09 97.53 92.17 84.16 110.13

Average 1955-56 to 1959-60 . 84.34 88.78 67.40 73.31 64.06 60.89 79.83

Comparative Index (Australia = 100)

New South Wales (e)

Victoria Queens­ land South

Australia ib)

Western Australia Tas­ mania Australia

1972-73 . . . . 106.7 105.4 89.0 86.7 93.9 81.1 1 0 0 . 0

1971-72 . . . . 109.0 103.8 84.7 85.2 97.9 81.0 1 0 0 . 0

1970-71 . . . . 109.9 105.6 80.3 83.3 97.8 82.2 1 0 0 .0

1969-70 . . . . 108.6 107.7 77.2 85.3 100.5 79.6 1 0 0 .0

1968-69 . . . . 107.8 106.6 79.0 84.9 105.3 79.8 1 0 0 .0

Average 1965-66 to 1969-70 . 106.9 109.2 78.8 84.9 1 0 0 .2 80.8 1 0 0 . 0

Average 1960-61 to 1964-65 . 107.4 110.4 81.8 8 8 . 6 83.7 76.4 1 0 0 . 0

Average 1955-56 to 1959-60 . 105.6 1 1 1 . 2 84.4 91.8 80.2 76.3 1 0 0 .0

(a) Includes Australian Capital Territory, (b) Includes Northern Territory.

131

of income tax payable per head have been substantially lower in Queensland, South Australia and Tasmania than in the other States. The comparative index figures for recent years show Queensland rising and Western Australia falling relatively to the Australian average. New South Wales and Victoria have remained substantially above the Australian average throughout the period of the table.

C.20 Table C-15 shows a further aspect of personal income which has a bearing on the comparative fiscal capacities of the States. A comparison between Tables C-12 and C-15 shows a degree of inverse relationship between levels of personal income and the proportion thereof received by way of cash benefits from public authorities. For cash benefits Tasmania shows a much higher figure than any other State for the last three years. In 1973-74 the comparative index for Queensland remained constant, while that of Western Australia declined sharply. Since 1970-71 the comparative index for South Australia has shown a steady decline.

Table C-15 — CASH BENEFITS FROM PUBLIC AUTHORITIES AS PERCENTAGE OF TOTAL PERSONAL INCOME

New South Wales (a)

Victoria Queens­ land South

Australia (b)

Western Australia Tas­ mania Australia

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

1973-74 . . . . 8.07 7.39 8.84 8 .0 1 7.79 9.56 7.99

1972-73 . . . . 7.87 7.38 8.87 8.37 8.59 9.72 8 . 0 2

1971-72 . . . . 7.23 6.71 8.46 7.88 7.51 9.11 7.37

1970-71 . . . . 6.95 6.34 8.57 7.80 7.17 8.53 7.11

1969-70 . . . . 7.08 6.41 8.64 7.47 7.23 8.57 7.17

Average 1965-66 to 1969-70 . 7.09 6.39 8.44 7.46 7.32 8.43 7.14

Average 1960-61 to 1964-65 . 7.26 6.45 8.65 7.53 8.90 8.59 7.37

Average 1955-56 to 1959-60 . 6.92 5.96 7.57 6.87 8.32 7.90 6.83

Comparative Index (Australia = 100)

New South Wales (a)

Victoria Queens­ land South

Australia (b)

Western Australia Tas­ mania Australia

1973-74 . . . . 1 0 1 . 0 92.5 1 1 0 . 6 100.3 97.5 119.6 1 0 0 . 0

1972-73 . . . . 98.1 92.0 1 1 0 . 6 104.4 107.1 1 2 1 . 2 1 0 0 . 0

1971-72 . . . . 98.5 90.1 116.4 106.2 100.7 123.0 1 0 0 . 0

1970-71 . . . . 97.7 88.7 1 2 1 . 6 109.2 1 0 1 .1 120.3 1 0 0 . 0

1969-70 . . . . 98.9 88.7 121.3 105.0 101.3 119.6 1 0 0 . 0

Average 1965-66 to 1969-70 . 99.7 88.5 118.7 104.6 102.7 117.5 1 0 0 . 0

Average 1960-61 to 1964-65 . 97.3 91.1 114.8 1 0 1 . 2 119.2 116.9 1 0 0 . 0

Average 1955-56 to 1959-60 . 101.3 87.3 1 1 0 . 8 1 0 0 . 6 1 2 1 . 8 115.7 1 0 0 . 0

(a) Includes Australian Capital Territory. (b) Includes Northern Territory.

Expenditure

C.21 Interstate comparisons of personal consumption expenditure per head of population since 1955-56 are shown in Table C-16. Throughout the period, New South Wales and Victorian figures are above those for the other States.

132

In recent years there has been comparatively little difference between the figures for Queensland, South Australia and Tasmania, which have remained sub­ stantially below the Australian average. The comparative index for Western Australia has gradually declined since 1969-70, in contrast to Queensland where

it has steadily increased since that year.

Table C-16 — PERSONAL CONSUMPTION EXPENDITURE PER HEAD OF POPULATION

New South Wales (a)

Victoria Queens­ land

South Australia Cb)

Western Australia Tasmania Australia

$ $ $ $ $ $ $

1973-74 . . 2,322.32 2,247.94 2,021.39 1,958.00 2,094.40 1,955.87 2,192.32

1972-73 . . . 2,029.43 1,924.79 1,726.25 1,706.35 1,832.36 1,671.31 1,898.17

1971-72 . . . 1,834.04 1,753.21 1,562.40 1,537.43 1,695.01 1,534.15 1,723.21

1970-71 . . . 1,683.83 1,612.28 1,410.36 1,401.97 1,570.79 1,395.95 1,579.22

1969-70 . . .

Average 1965-66 to 1,556.12 1,498.27 1,300.56 1,302.64 1,458.31 1,290.41 1,462.49 1969-70 . .

Average 1960-61 to 1,353.05 1,324.01 1,159.07 1,145.70 1,260.78 1,147.68 1,283.12 1964-65 . .

Average 1955-56 to 1,016.09 1,013.99 886.55 892.28 909.40 882.01 972.78

1959-60 . . 821.66 820.01 710.11 746.18 744.40 706.80 788.46

Comparative Index (Australia — 100)

New South Wales (a)

Victoria Queens­ land

South Australia (6)

Western Australia Tasmania Australia

1973-74 . . . 105.9 102.5 92.2 89.3 95.5 89.2 1 0 0 . 0

1972-73 . . . 106.9 11.4 90.9 89.9 96.5 8 8 . 0 1 0 0 . 0

1971-72 . . . 106.4 101.7 90.7 89.2 98.4 89.0 1 0 0 . 0

1970-71 . . . 106.6 1 0 2 .1 89.3 8 8 . 8 99.5 88.4 1 0 0 . 0

1969-70 . . .

Average 1965-66 to 106.4 1002.4 88.9 89.1 99.7 8 8 . 2 1 0 0 . 0

1969-70 . .

Average 1960-61 to 105.4 103.2 90.3 89.3 98.3 89.4 1 0 0 . 0

1964-65 . .

Average 1955-56 to 104.5 104.2 91.1 91.7 93.5 90.7 1 0 0 .0

1959-60 . . 104.2 104.0 90.1 94.6 94.4 89.6 1 0 0 .0

(a) Includes Australian Capital Territory. (6) Includes Northern Territory.

C.22 The figures of motor vehicles on register per 1,000 of population shown in Table C-17 cover a similar period to those of personal consumption expenditure. However, they present a very different picture of interstate relativities and trends therein, reflecting the particular factors influencing the use of motor vehicles. The comparative index figures for motor vehicle registrations show New South Wales

below the Australian average for the entire period and Victoria below after 1970. Queensland has been close to the Australian average, but has moved perceptibly

133

above it in recent years. South Australia, which held the highest position before 1970, has since occupied second position behind Western Australia.

Table C-17 — MOTOR VEHICLES ON REGISTER PER 1,000 OF POPULATION

As at 30 June

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Australia (a)

1974 ......................................... 432 443 461 475 481 460 449

1973 ......................................... 414 423 438 456 460 442 429

1972 ......................................... 397 406 417 435 442 428 411

1 9 7 1 ......................................... 378 394 398 423 433 412 395

1970 ......................................... 364 382 383 413 416 397 382

Average 1966 to 1970 . . 339 359 359 389 388 371 357

Average 1961 to 1965 . . 285 306 299 345 332 302 302

Average 1956 to 1960 . . 234 261 256 309 270 250 255

C om parative Index (Australia = 100)

As at 30 June

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Australia (a)

1974 ......................................... 96.2 98.7 102.7 105.8 107.1 102.4 1 0 0 . 0

1973 ......................................... 96.5 98.6 1 0 2 .1 106.3 107.2 103.0 1 0 0 .0

1972 ......................................... 96.6 98.8 101.5 105.8 107.5 104.1 1 0 0 .0

1 9 7 1 ......................................... 95.7 99.7 1 0 0 . 8 107.1 109.6 104.3 1 0 0 .0

1970 ......................................... 95.3 1 0 0 . 0 100.3 108.1 108.9 103.9 1 0 0 . 0

Average 1966 to 1970 . . 95.0 1 0 0 . 6 1 0 0 . 6 109.0 108.7 103.9 1 0 0 . 0

Average 1961 to 1965 . . 94.4 101.3 99.0 114.2 109.9 1 0 0 . 0 1 0 0 . 0

Average 1956 to 1960 . . 91.8 102.3 100.4 1 2 1 . 2 105.9 98.0 1 0 0 .0

(a) Includes A ustralian C apital T erritory and N orthern Territory.

C.23 Figures relating to instalment credit for retail sales, showing the end of June balances outstanding per head of population, are presented in Table C-18 for the period since June 1961 (information for the preceding five-year period is unavailable). On 1 July 1973, a new series, which excluded the component relating to the financing of sales of plant, machinery and vehicles for commercial purposes, was introduced. The introduction of the new series has had the effect of reducing balances outstanding per head of population, and has reversed the relative posi­ tions of New South Wales and Queensland. However, the comparative index figures show New South Wales, Queensland and Western Australia above the Australian average during the last five years. For the period of the table, Victoria has occupied the lowest position and Western Australia the highest position. Since

1961, the largest increases have been recorded in Queensland and Western Australia. For 1974, Western Australia remains well above the other States, followed by New South Wales and Queensland. In recent years there have been considerable changes in the index numbers.

C.24 Table C-19 shows expenditure on alcoholic drinks per head of popula­ tion for the same period as for personal consumption expenditure in Table C-16. The comparative index shows New South Wales and Western Australia above the Australian average throughout, with Western Australia in the highest position

134

from the 1965-66 to 1969-70 period until 1972-73 when there was a marked decrease in consumption. Victoria, Queensland, South Australia and Tasmania have been below the Australian average throughout. Queensland’s comparative

index has steadily increased since 1969-70, and in 1973-74 is slightly under the Australian average.

Table C-18 — INSTALMENT CREDIT FOR RETAIL SALES: BALANCES OUTSTANDING PER HEAD OF POPULATION

As at 30 June

New South Wales U)

Victoria Queens­ land South Australia

Cb)

Western Australia Tasmania Australia

$ $ $ $ $ $ $

1974(c) . . . . 154.71 122.09 154.45 141.19 161.43 144.25 144.67

1973 ......................................... 177.16 142.94 191.87 151.85 211.80 170.68 170.06

1972 ......................................... 174.37 143.60 172.90 147.39 201.67 157.06 164.77

1 9 7 1 ......................................... 170.08 146.41 166.38 151.10 198.35 147.80 162.79

1970 ......................................... 157.61 137.89 158.36 140.61 188.93 139.03 152.51

Average 1966 to 1970 . . 139.20 117.06 146.32 123.19 163.00 128.82 139.62

Average 1961 to 1965 . . 126.81 107.71 114.05 119.31 128.43 109.34 117.16

Comparative Index (Australia = 100 )

New

As at 30 June South Victoria Queens- South Western Tasmania Australia

Wales land Australia Australia

(«) (b)

1974(c) . . . . 106.9 84.4 106.8 97.6 1 1 1 . 6 99.7 1 0 0 .0

1973 ......................................... 104.2 84.1 1 1 2 . 8 89.3 124.5 100.4 1 0 0 .0

1972 ......................................... 105.8 87.2 104.9 89.5 122.4 95.3 1 0 0 . 0

1 9 7 1 ......................................... 104.5 89.9 1 0 2 . 2 92.8 1 2 1 . 8 90.8 1 0 0 . 0

1970 ......................................... 103.3 90.4 103.8 92.2 123.9 91.2 1 0 0 . 0

Average 1966 to 1970 . . 99.7 83.8 104.8 8 8 . 2 116.7 92.3 1 0 0 . 0

Average 1961 to 1965 . . 108.2 91.9 97.3 1 0 1 . 8 109.6 93.3 1 0 0 . 0

(a) Includes A ustralian C apital Territory. (b) Includes N orthern Territory. (c) New series. Excludes com ponent relating to the financing of sales of plant, machinery and vehicles norm ally used for comm ercial purposes.

Railways

C.25 Table C-20 gives comparative statistics of the operations of State govern­ ment railways. Three periods are shown in the table in order to give some indica­ tion of the trends over the past 15 years. Three-year average figures have been calculated for each period in order to reduce the influence of abnormal factors

which may have a distorting effect in a particular year.

C.26 The figures of route kilometres per 1,000 of population reflect the differences between States in the average density of population as shown in Table C-3. Growth of population has contributed to the reduction in route kilometres per 1,000 of population in all States except Tasmania since the middle period of the

table. Construction of new lines for mineral traffic in Queensland has tended to offset the effect of population growth on the figures for that State.

135

Table C-19 — EXPENDITURE ON ALCOHOLIC DRINKS PER HEAD OF POPULATION

New South Wales (a)

Victoria Queens­ land South

Australia (b)

Western Australia Tas­ mania Australia

$ $ $ $ $ $ $

1973-74 . . . . 154.36 120.99 134.21 113.02 138.27 125.38 136.04

1972-73 . . . . 138.51 105.33 116.00 102.37 1 2 1 . 2 2 111.42 120.38

1971-72 . . . . 119.02 100.40 103.19 100.56 124.21 104.49 109.80

1970-71 . . . . 113.18 94.50 93.80 91.92 119.39 97.51 104.76

1969-70 . . . . 104.19 89.75 84.83 84.07 109.73 87.92 95.37

Average 1965-66 to 1969-70 . 91.73 78.73 76.57 71.74 92.96 76.60 83.59

Average 1960-61 to 1964-65 . 69.07 57.47 55.98 53.63 64.89 55.80 61.73

Average 1955-56 to 1959-60 . 62.36 51.88 49.63 48.56 57.68 50.04 55.57

C om parative Index (Australia = 100)

New South Wales (a)

Victoria Queens­ land South

Australia (b)

Western Australia Tas­ mania Australia

1973-74 . . . . 113.5 88.9 98.7 83.1 1 0 1 . 6 92.2 1 0 0 . 0

1972-73 . . . . 115.1 87.5 96.4 85.0 100.7 92.6 1 0 0 . 0

1971-72 . . . . 108.4 91.4 94.0 91.6 113.1 95.2 1 0 0 . 0

1970-71 . . . . 108.0 90.2 89.5 87.7 114.0 93.1 1 0 0 . 0

1969-70 . . . . 109.2 94.1 88.9 8 8 . 2 115.1 92.2 1 0 0 . 0

Average 1965-66 to 1969-70 . 109.7 94.2 91.6 85.8 1 1 1 . 2 91.6 1 0 0 .0

Average 1960-61 to 1964-65 . 111.9 93 A 90.7 86.9 105.1 90.4 1 0 0 . 0

Average 1955-56 to 1959-60 . 1 1 2 . 2 93.4 89.3 87.4 103.8 90.0 1 0 0 . 0

(a) Includes Australian Capital Territory, (b) Includes N orthern Territory.

C.27 The density of traffic is reflected in the figures for traffic train kilometres per route kilometre, passenger journeys per route kilometre, goods and livestock per route kilometre and gross earnings per route kilometre. For all items other than goods and livestock, the indicators of traffic density are much higher in New South Wales and Victoria than in the other States. In the case of goods and livestock, the figure for New South Wales is much higher than those for the other States, but Victoria has been overtaken by Queensland, Western Australia and Tasmania in the latest period. For traffic train kilometres per route kilometre Victoria is the only State to show substantial increases in both the middle and latest periods of the table; the figure for Queensland is constant throughout.

Passenger journeys per route kilometre show a continuing decline in all States except Queensland and Western Australia, both of these States having increased in the latest period. The greatest proportionate reduction has occurred in Tas­ mania. Density of goods and livestock traffic as measured by tonnes carried per

route kilometre has shown substantial increases over the first period in all States. Also, the latest period figures are substantially higher than those for the second period in all States except New South Wales and Victoria, with very large increases in Queensland and Western Australia. Gross earnings per route kilo-

136

Table C-20 — STATE GOVERNMENT RAILWAYS OPERATIONS Average 1971-72 to 1973-74

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania

Route kilometres per 1,000 of mean population . . . . . 2 .1 1 . 9 5 . 0 3 . 2 5 . 8 2 . 1

Traffic train kilometres per route km Γ0 0 0 ) 6 .1 5.0 3.0 2 . 6 2 . 0 2.4

Passenger journeys per route km (Ό00) . 23.3 19.1 3.5 3.5 1.9 0.9

Goods and livestock—Tonnes carried per route km . . . . . 3,288 1,730 2,321 1,521 2,295 1,903

Net tonne kilometres per route km (Ό00) 868 A ll 746 424 611 267

Gross earnings per route km ($’000) . 26.8 16.9 14.2 9.5 11.3 8.4

Percentage distribution of gross earnings— 29.0 Coaching . . . . . 35.0 7.9 14.2 9.3 6 . 6

Goods and livestock . . . . 64.5 56.0 89.6 75.5 84.8 89.2

Miscellaneous . . . . . 6. 5 9. 0 2. 5 10.3 5.9 4.2

Operating results per capita ($) fa) . - 8 .7 9 - 1 3 .2 5 + 0 . 0 1 - 1 1 .2 9 - 2 .3 6 - 1 3 .9 6

Average employment per 10,000 of mean population . . . . . 90 72 118 70 94 52

Average 1967-68 to 1969-70

Route kilometres per 1,000 of mean population . . . . . 2 . 2 2 . 0 5 . 3 3 . 56 . 6 2 . 1

Traffic train kilometres per route km (Ό00) 6.4 4.8 3.0 2.5 2 .1 2.4

Passenger journey per route km (Ό00) . 25.7 21.5 3.0 3.7 1.7 1 . 2

Goods and livestock—Tonnes carried per route km . . . . . 3,358 1,729 1,324 1,315 1,513 1,546

Net tonne kilometres per route km (Ό00) 850 464 458 325 441 241

Gross earnings per route km ($’000) . 23.9 15.1 10.7 7.8 8.7 8.5

Percentage distribution of gross earnings— 23.8 15.1 6 . 0 Coaching . . . . . 34.5 9.3 9.9

Goods and livestock . . . . 70.6 58.3 87.7 76.8 8 6 . 0 90.4

Miscellaneous . . . . . 5. 6 7. 2 3. 0 8 .1 4 . 1 3 . 6

Operating results per capita ($) (a) . + 6.31 - 2 .8 9 + 5.88 - 3 .7 4 + 2 . 8 6 - 5 .0 6

Average employment per 10,000 of mean population . . . . . 101 8 0 1 3 5 8 1 121 6 0

Average 1957-58 to 1959-60

Route kilometres per 1,000 of mean population . . . . . 2 . 6 2 . 5 7 . 1 4 . 5 9 . 4 2 . 7

Traffic train kilometres per route km (Ό00) 5.9 4.2 3.0 2 . 8 1 .9 2.9

Passenger journeys per route km (Ό00) . 26.0 23.3 3.2 4.2 2 .1 2 . 6

Goods and livestock—Tonnes carried per route km . . . . . 2,087 1,354 773 1,038 617 1,301

Net tonne kilometres per route km (Ό00) n.a. 312 231 244 158 200

Gross earnings per route km ($"000) . 15.8 1 0 .8 6 . 8 6.4 4.2 6 . 0

Percentage distribution of gross earnings—

13.4 7.1 Coaching . . . . . 28.4 34.7 15.4 12.5

Goods and livestock . . . . 66.7 58.1 83.5 77.8 82.0 89.6

Miscellaneous . . . . . 4. 9 7. 2 3. 1 6 . 8 5 . 5 3 . 3

Operating results per capita ($) (a) . + 2.76 - 0 . 6 6 - 2 .7 9 - 4 .2 0 - 6 .7 8 - 3 .0 5

Average employment per 10,000 of mean population . . . . . 139 109 204 117 188 78

(a) As defined by the Commission. N ot necessarily the same as in the published railway accounts.

metre also show considerable increases in all States, with the exception of a small decline in Tasmania in the latest period.

C.28 The percentage distribution of gross earnings shows that New South Wales and Victoria derive a much higher proportion from coaching than the other

137

Table C-21—SCHOOL ENROLMENTS

Year

New South Victoria Queens- South Western Tasmania Six

Wales land Australia Australia States

(i) A ll school enrolments as percentage o f State population aged 5-18 years 1974 ......................................... 85.6 8 6 . 0 80.6 84.8 78.4 84.2 84.2

1973 ......................................... 85.8 86.3 80.2 84.7 78.7 84.6 84.3

1972 ......................................... 8 6 . 0 86.4 79.9 85.1 78.8 84.9 84.5

1 9 7 1 ......................................... 85.5 85.9 79.8 84.6 78.6 85.0 84.1

1966 ......................................... 81.2 83.1 78.7 83.3 78.0 81.0 81.3

1 9 6 1 ......................................... 80.8 81.4 77.7 80.6 77.7 81.6 80.2

1954 ......................................... 79.9 76.5 74.2 80.6 72.7 79.2 77.6

Comparative Index (Six States = 100)

1974 ......................................... 101.7 1 0 2 .1 95.7 100.7 93.1 1 0 0 . 0 1 0 0 . 0

1973 ......................................... 1 0 1 . 8 102.4 95.1 100.5 93.4 100.4 1 0 0 . 0

1972 ......................................... 101.9 102.3 94.6 100.7 93.3 100.5 1 0 0 . 0

1 9 7 1 ......................................... 1 0 1 . 8 1 0 2 . 2 95.0 1 0 0 . 6 93.5 1 0 1 .1 1 0 0 . 0

1966 ......................................... 99.9 1 0 2 . 2 96.8 102.5 95.9 99.6 1 0 0 . 0

1 9 6 1 ......................................... 100.7 101.5 96.9 100.5 96.9 101.7 1 0 0 . 0

1954 ......................................... 103.0 98.6 95.6 103.9 93.7 1 0 2 .1 1 0 0 . 0

(ii) Enrolments at government schools as percentage o f State population aged 5-18 years 1974 ......................................... 6 6 . 8 65.0 62.9 72.6 63.8 71.3 6 6 . 1

1973 ......................................... 66.9 65.4 62.4 72.8 64.0 71.8 66.3

1972 ......................................... 67.0 65.5 61.7 73.2 64.0 72.2 66.3

1 9 7 1 ......................................... 66.4 65.0 61.4 72.7 63.7 72.1 65.8

1966 ......................................... 61.7 61.9 59.1 69.3 60.6 67.4 62.3

1 9 6 1 ......................................... 60.9 59.1 59.6 64.2 61.0 67.9 60.8

1954 ......................................... 60.4 55.7 57.1 66.3 56.8 66.4 59.1

Comparative Index (Six States = 100)

1974 . . . . . 1 0 1 .1 98.3 95.2 109.8 96.5 107.9 1 0 0 . 0

1973 ......................................... 1 0 1 .1 98.6 94.1 109.8 96.5 108.3 1 0 0 . 0

1972 ......................................... 1 0 1 .1 98.8 93.1 110.4 96.6 108.8 1 0 0 . 0

1 9 7 1 ......................................... 100.9 98.7 93.3 110.4 96.7 109.5 1 0 0 . 0

1966 ......................................... 99.0 99.4 94.9 1 1 1 . 2 97.3 108.2 1 0 0 . 0

1 9 6 1 ......................................... 1 0 0 . 2 97.2 98.0 105.6 100.3 111.7 1 0 0 . 0

1954 ......................................... 1 0 2 . 2 94.2 96.6 1 1 2 . 2 96.1 112.4 1 0 0 . 0

(iii) Enrolments at non-government schools as percentage o f State population aged 5-18 years 1974 ......................................... 18.8 2 1 . 0 17.7 1 2 . 2 14.6 12.9 18.1

1973 ......................................... 18.9 20.9 17.8 11.9 14.7 1 2 . 8 18.0

1972 ......................................... 19.0 20.9 18.2 11.9 14.8 12.7 18.2

1 9 7 1 ......................................... 19.1 20.9 18.4 11.9 14.9 12.9 18.3

1966 ......................................... 19.7 2 1 . 6 18.4 1 2 . 0 15.7 13.7 18.7

1 9 6 1 ......................................... 19.9 22.3 18.0 13.3 16.8 13.7 19.2

1954 ......................................... 19.5 2 0 . 8 17.1 14.3 15.9 1 2 . 8 18.5

Comparative Index (Six States — 100)

1974 ......................................... 103.9 116.0 97.8 67.4 80.7 71.3 1 0 0 . 0

1973 ......................................... 105.0 116.1 98.9 6 6 .1 81.7 71.1 1 0 0 . 0

1972 ......................................... 104.4 114.8 1 0 0 . 0 65.4 81.3 69.8 1 0 0 . 0

1 9 7 1 ......................................... 104.4 114.2 100.5 65.0 81.4 70.5 1 0 0 . 0

1966 ......................................... 105.3 115.5 98.4 64.2 84.0 73.3 1 0 0 . 0

1 9 6 1 ......................................... 103.6 116.1 93.8 69.3 87.5 71.4 1 0 0 . 0

1954 ......................................... 105.4 112.4 92.4 77.3 85.9 69.2 1 0 0 .0

138

Table C-21— Continued

Year

New South Victoria Queens- South Western Tasmania Six Wales land Australia Australia States

(iv) Enrolments at government schools as percentage o f total school enrolments 1974 .......................................... 78.0 75.6 78.1 85.7 81.4 84.7 78.6

1973 .......................................... 77.9 75.8 77.8 85.9 81.3 84.9 78.6

1972 ......................................... 77.9 75.8 77.2 8 6 .1 81.3 85.0 78.5

1 9 7 1 ......................................... 77.6 75.6 76.9 85.9 81.0 82.7 78.2

1966 .......................................... 75.8 74.1 76.3 85.3 79.4 83.1 76.9

1 9 6 1 .......................................... 75.3 72.6 77.0 82.8 78.4 83.2 76.0

1954 .......................................... 75.6 72.8 77.0 82.3 75.8 83.8 76.0

Comparative Index (S ix States = 100)

1974 ......................................... 99.2 96.2 99.4 109.0 103.6 107.8 1 0 0 . 0

1973 ......................................... 99.1 96.4 99.0 109.3 103.4 108.0 1 0 0 . 0

1972 ......................................... 99,2 96.6 98.3 109.7 103.6 108.3 1 0 0 . 0

1 9 7 1 ......................................... 99.2 96.7 98.3 109.8 103.6 105.8 1 0 0 . 0

1966 ......................................... 98.6 96.4 99.2 110.9 103.3 108.1 1 0 0 . 0

1 9 6 1 ......................................... 99.1 95.5 101.3 108.9 103.2 109.5 1 1 0 . 0

1954 ......................................... 99.5 95.8 101.3 108.3 99.7 110.3 1 0 0 . 0

(v) A ll enrolments as percentage o f State population 1974 ......................................... 2 1 . 0 2 2 . 1 21.3 22.3 2 1 . 2 23.6 2 1 . 6

1973 ......................................... 2 1 . 2 22.3 21.4 22.5 21.3 23.8 21.7

1972 ......................................... 21.5 22.4 21.4 2 2 . 8 21.4 24.0 21.9

1971 . . . . . 2 1 . 6 22.4 21.5 22.9 21.5 24.2 2 2 . 0

1966 ......................................... 20.9 21.9 2 1 . 2 22.5 2 1 . 8 23.5 2 1 . 6

1 9 6 1 ......................................... 20.4 20.7 20.9 2 1 . 6 2 1 . 6 22.9 2 0 . 8

1954 ......................................... 18.3 17.0 18.1 18.3 18.4 2 0 . 1 18.0

Comparative Index (S ix States = 100)

1974 ......................................... 97.2 102.3 98.6 103.2 98.2 109.3 1 0 0 . 0

1973 ......................................... 97.7 1 0 2 .8 98.6 103.7 98.2 109.7 1 0 0 . 0

1972 ......................................... 98.2 102.3 97.7 104.1 97.7 109.6 1 0 0 . 0

1 9 7 1 ......................................... 98.2 1 0 1 .8 97.7 104.1 97.7 1 1 0 . 0 1 0 0 .0

1966 ......................................... 96.8 101.4 98.1 104.2 100.9 108.8 1 0 0 .0

1 9 6 1 ......................................... 98.1 99.5 100.5 103.8 103.8 1 1 0 .1 1 0 0 . 0

1954 ......................................... 101.7 94.4 1 0 0 . 6 101.7 1 0 2 . 2 111.7 1 0 0 . 0

(vi) Enrolments at government schools as percentage o f State population 1974 ......................................... 16.4 16.7 16.6 19.1 17.3 2 0 . 0 17.0

1973 ......................................... 16.5 16.8 16.6 19.3 17.3 2 0 . 2 17.1

1972 ......................................... 16.7 17.0 16.5 19.6 17.4 20.4 17.2

1 9 7 1 ......................................... 16.8 17.0 16.5 19.7 17.5 2 0 . 6 17.2

1966 ......................................... 15.9 16.3 16.2 19.2 17.3 19.6 16.6

1 9 6 1 ......................................... 15.4 15.0 16.1 17.9 16.9 19.1 15.8

1954 ......................................... 13.9 12.4 13.9 15.1 13.9 16.9 13.7

Comparative Index (S ix States = 100)

1974 ......................................... 96.5 98.2 97.7 112.4 1 0 1 .8 117.7 1 0 0 . 0

1973 ......................................... 96.5 98.2 97.1 1 1 2 .8 1 0 1 .1 118.1 1 0 0 .0

1972 ......................................... 97.2 98.8 95.9 114.0 101.3 118.7 1 0 0 .0

1 9 7 1 ......................................... 97.3 98.4 95.9 114.4 101.3 119.2 1 0 0 .0

1966 ......................................... 95.8 98.2 97.6 115.7 104.2 118.1 1 0 0 .0

1 9 6 1 ......................................... 97.5 94.9 1 0 1 .0 113.3 107.0 120.9 1 0 0 . 0

1954 ......................................... 101.5 90.5 101.5 1 1 0 . 2 101.5 123.4 1 0 0 . 0

Source: Australian Bureau of Statistics, Schools, 1974.

139

States, Tasmania having the lowest. In all States except New South Wales and Victoria, the percentage in the latest period is lower than in the first period, but since the middle period there has been an increase in the percentages for New South Wales, Victoria and Tasmania.

C.29 The per capita figures for railway operating results are subject to the qualifications discussed in Appendix H. On average for the years 1971-72 to 1973-74 only Queensland had an operating surplus. If the latest period is com­ pared with the middle period, all States show a substantially worse result, in the

sense of a smaller per capita operating surplus (Queensland), a change from surplus to deficit (New South Wales and Western Australia), or a larger deficit (Victoria, South Australia and Tasmania).

C.30 The figures of railway employment relative to population may not be strictly comparable as they could be affected by employment on new construction or major reconstruction work. However, in all three periods the Queensland figure was the highest, followed in order by Western Australia and New South Wales, with Tasmania well below all other States. Railway employment relative to population shows a substantial decline in all States in both the middle and the latest periods.

Social Services

C.31 Table C-21 gives information about the relationship between school enrolments and population in the different States for selected years since 1954. Table C-4 of this appendix indicates that the ratio of school-age population (5-18 years) to total population is considerably lower in New South Wales and Victoria than in the other States. In contrast, section (i) of Table C-21 shows that New South Wales and Victoria have higher ratios of total school enrolments to school- age population than the other States. Queensland and Western Australia have had the lowest ratios throughout the period of the table.

C.32 Section (ii) of Table C-21, which gives the ratio of enrolments at govern­ ment schools to school-age population, shows that South Australia and Tasmania have been considerably above the other States since 1954. Section (iii) shows that these States have by far the lowest ratios of enrolments at non-government schools to school-age population, while New South Wales and Victoria have had the highest ratios of all States since 1954.

C.33 The higher ratios for government schools in South Australia and Tas­ mania are a reflection partly of their higher percentage of population in the school-age group (see Table C-4 of this appendix) and partly of their higher proportion of government to total school enrolments as shown in section (iv). Since 1954 there has been a noticeable increase in the ratio of government school enrolments to total school enrolments in every State, although the 1974 figures showed slight reductions for Victoria, South Australia and Tasmania. Since the average cost per pupil to the State budget is greater in all States for pupils attend­ ing government schools than for those in non-government schools, the figures in

sections (v) and (vi) have a direct bearing on relative costs per head of popula­ tion in the different States. Enrolments in government schools as a percentage of State population are much higher in South Australia and Tasmania than in the other States.

C.34 Table C-22 shows the numbers of approved beds per 1,000 of population available at 30 June in each of the years 1970 to 1974 in public and private hospitals and participating nursing homes. The first section of the table, giving

140

T a b le C -2 2 — HOSPITALS AND NURSING HOMES: NUMBER OF APPROVED BEDS PER 1,000 OF POPULATION

As at 30 June

New South Victoria Queens- South Western Tasmania Six Wales land Australia

(a)

Australia States

(i) Public hospitals and State nursing homes (b)

1974 ......................................... 6.14 5.02 7.21 5.17 6.98 7.26 6 . 0 0

1973 ......................................... 5.82 4.93 7.16 4.85 6.98 7.20 5.82

1972 ......................................... 5.84 5.20 7.74 4.73 7.01 7.23 5.98

1 9 7 1 ......................................... 5.96 5.16 7.90 4.74 6.62 7.13 6 . 0 0

1970 ......................................... 5.95 5.10 7.97 4.54 6.81 7.14 5.98

Comparative Index (Six States = 100)

1974 ......................................... 102.3 83.7 1 2 0 . 2 8 6 . 2 116.3 1 2 1 . 0 1 0 0 . 0

1973 ......................................... 1 0 0 . 0 84.7 123.0 83.3 119.9 123.7 1 0 0 .0

1972 ......................................... 97.7 86.9 129.4 79.1 117.2 120.9 1 0 0 . 0

1 9 7 1 ......................................... 99.3 8 6 . 0 131.7 79.0 110.3 118.8 1 0 0 . 0

1970 ......................................... 99.5 85.3 133.3 75.9 113.9 119.4 1 0 0 . 0

(ii) Private hospitals and participating nursing homes (c) 1974 ......................................... 5.44 2.97 4.36 4.79 5.19 4.02 4.47

1973 ......................................... 5.49 2.90 4.37 4.97 5.00 3.96 4.46

1972 ......................................... 5.33 2.45 3.83 4.65 4.44 3.79 4.12

1971 . . . . . 4.83 2.34 3.52 4.52 3.81 3.70 3.80

1970 ......................................... 4.35 2.26 3.32 4.38 3.68 3.34 3.53

Comparative Index (S ix States = 100)

1974 ......................................... 121.7 66.4 97.5 107.2 116.1 89.9 1 0 0 . 0

1973 ......................................... 123.1 65.0 97.9 111.4 1 1 2 .1 88.8 1 0 0 .0

1972 ......................................... 129.4 59.5 92.9 112.9 107.8 92.0 1 0 0 . 0

1 9 7 1 ......................................... 127.1 61.6 92.6 118.9 100.3 97.4 1 0 0 . 0

1970 ......................................... 123.2 64.0 94.1 124.1 104.3 94.6 1 0 0 . 0

(iii) Total private and public hospitals and State and participating nursing homes 1974 ......................................... 11.58 7.99 11.57 9.96 12.17 11.28 10.47

1973 ......................................... 11.31 7.83 11.53 9.82 11.98 11.16 10.28

1972 ......................................... 11.17 7.65 11.57 9.38 11.45 1 1 .0 2 1 0 . 1 0

1 9 7 1 ......................................... 10.79 7.50 11.42 9.26 10.43 10.83 9.80

1970 ......................................... 10.30 7.36 11.29 8.92 10.49 10.48 9.51

Comparative Index (Six States = 100)

1974 ......................................... 1 1 0 .6 76.3 110.5 95.1 116.2 107.7 1 0 0 . 0

1973 ......................................... 1 1 0 .0 76.2 1 1 2 .2 95.5 116.5 108.6 1 0 0 .0

1972 ......................................... 1 1 0 .6 75.7 114.6 92.9 113.4 109.1 1 0 0 . 0

1 9 7 1 ......................................... 110.1 76.5 116.5 94.5 106.4 110.5 1 0 0 .0

1970 ......................................... 108.3 77.4 118.7 93.8 110.3 110.2 1 0 0 .0

(а) Includes nursing homes in the Northern Territory. (б) A State nursing home is owned or controlled by the State. (c) A participating nursing home accepts government control over the admission of patients and the level of fees charged.

figures for public hospitals and State nursing homes, shows Queensland, Western Australia and Tasmania well above the six-State average, and Victoria and South Australia substantially below the average, for the period of the table. Approved beds per 1,000 of population for Queensland show a substantial reduction to 1973,

141

and have declined relatively to the six-State average throughout the period of the table. In contrast, the comparative index for South Australia has risen throughout the period. The comparative index figure for New South Wales shows an increase in 1973 and 1974, and has moved slightly above the six-State average at 30 June

1974. Victoria has declined relatively since 1972 to 16 per cent below the six-State average at 30 June 1974. The index numbers in section (ii) of the table show that, in recent years, New South Wales has had more approved beds per 1,000 of popu­ lation in private hospitals and participating nursing homes than the other States. Victoria, on the other hand, is well below any other State, though its comparative position has risen in 1973 and 1974. The comparative index numbers show con­ trasting trends in the different States, with increases in Victoria, Queensland and Western Australia and reductions in the other three States. The total figures in section (iii) show Victoria well below any other State throughout. South Australia also is below the six-State average, reflecting its relatively low figures for public hospitals and State nursing homes. The other four States have been above the six-State average throughout the period of the table, with Queensland showing a clear downward trend and Western Australia a clear upward trend. In all the States the 1974 figures per 1,000 population exceeded those of earlier years (with

the exception of the 1972 figure for Queensland).

C.35 Table C-23 shows for selected years the number of pensioners in each State as a percentage of the State’s population. Although the figures relate to the numbers receiving age, invalid, widow and service pensions from the Australian Government, they could be expected to have some relevance to the need for certain kinds of State government social service expenditure, such as the maintenance of institutions for the aged. The relative numbers of pensioners in the different States tend also to be related to the proportion of elderly people, which is shown as at

30 June 1974 in Table C-4. From 1961 to 1973 Queensland had the highest relative pensioner population, but in 1974 was in third position behind South Australia and Tasmania. During the past five years Western Australia has occupied the lowest position. In all States there has been a considerable increase since 1954 in

the proportion of pensioners to population.

Table C-23 — PENSIONERS (a) AS PERCENTAGE OF STATE POPULATION

As at 30 June

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Six States

Per cent Per cent Per cent Per cent Per cent Per cent Per cent

1974 ......................................... 1 0 . 8 8 10.27 11.19 11.40 9.68 11.41 10.72

1973 ......................................... 1 0 .0 1 9.46 10.62 10.44 8.96 10.54 9.92

1972 ......................................... 9.06 8.44 9.82 9.29 7.94 9.35 8.94

1 9 7 1 ......................................... 8.99 8.24 9.80 9.03 7.82 9.10 8.81

1970 ......................................... 8.93 8.07 9.69 8.76 7.85 8.75 8.69

1969 ......................................... 8.33 7.31 8.89 8 . 0 2 7.51 7.83 8 . 0 2

1966 ......................................... 7.95 6.89 8.46 7.43 7.70 7.43 7.64

1 9 6 1 ......................................... 7.63 6.43 7.84 7.11 7.37 6 . 8 6 7.23

1954 ......................................... 6.50 5.24 6.06 5.66 5.72 5.70 5.96

(a) Numbers in receipt o f age, invalid, widow and service pensions.

142

Indexes of State Development

C.36 Table C-24 shows various indexes reflecting aspects of development in all States by comparing the three-year period 1971-72 to 1973-74 with the three-year period 1961-62 to 1963-64. The average figures for each item for the later period are expressed as a percentage of the corresponding average for the earlier period

in order to minimise fluctuations which may occur in a particular year. The table does not present a complete picture of the elements in the growth of the economies of the States, as statistics have been selected primarily on the basis of their availability. However, it illustrates the complexity and variety of the factors involved in State development. An interesting feature of the table is the rapid growth in Western Australia compared with the other States, especially in popula­ tion, employment, wheat and wool production, power generated, number of dwell­

ings completed, motor vehicle registrations and railway freight traffic. Queens­ land has also shown a high rate of growth in a number of areas, particularly in areas under pastures and crops, power generation, the number of dwellings completed, motor vehicles and railway freight traffic. In Tasmania, there has been

a substantial reduction in areas under crops, caused mainly by a decline in apple production in recent years.

Table C-24 — INDEXES OF STATE DEVELOPMENT

Period 1971-72 to 1973-74 as percentage of period 1961-62 to 1963-64.

New South Wales

Victoria Queens­ land South

Australia Western Australia Tasmania Six

States

Per cent Per cent Per cent Per cent Per cent Per cent Percent

Mean population . . . 117 119 121 120 137 110 119

Wool produced . . . 75 117 67 113 177 121 99

Wheat produced . . . 99 85 115 117 162 64 113

Cropped area . . . 124 80 138 102 135 48 115

Pasture area . . . 139 138 233 166 191 148 160

Wage and salary earners in civilian employment . . 134 136 149 142 166 131 139

Wage and salary earners in manufacturing industry . 117 124 130 133 140 119 123

Power generated (a) . . 203 194 253 216 296 188 209

Timber produced . . . 117 103 104 92 89 112 105

Number of dwellings completed 150 150 246 125 207 124 162

M otor vehicles on register . 169 163 182 158 192 163 170

Registration of new motor vehicles . . . . 173 149 164 148 174 144 161

Freight traffic on government railways . . . . 124 102 255 127 271 133 154

Total postal articles handled (b) 124 122 138 131 131 114 126

Telephone instruments in

service (b) . . . 193 179 172 178 227 160 186

School pupils enrolled, all schools . . . . 120 124 123 121 131 112 122

University students enrolled . 191 221 169 155 221 200 192

(a) Excludes electricity generated by m anufacturers producing electricity prim arily for their own use. (fc) New South Wales includes A ustralian Capital Territory. South Australia includes N orthern Territory.

143

APPENDIX D

Recent Changes in Economic Conditions in the States

Table D-l — UNEMPLOYMENT AND VACANCIES: 1974-75 AND ANNUAL VARIATION

(Based on Average Monthly Figures)

New

Queens- South Western

Australia

Wales Victoria land Australia Australia Tasmania

(a) (b)

Recipients of unem­ ployment benefits: 1974-75 . . 42,121 34,230 19,735 11,042

9,588 3,757 120,473

Annual variation— From 1973-74 to 1974-75 . . +29,941 + 25,087 + 15,338 + 7,741

+ 6,844 + 1,749 + 86,700

From 1972-73 to 1973-74 . . - 1 3 5 -1 ,5 9 9 -5 3 3 -1 ,1 0 8

-2 ,1 7 0 - 5 0 -5 ,5 9 5

From 1971-72 to 1972-73 . . + 2,694 + 1,957 + 83 +517

+ 1,824 +777 + 7,852

From 1970-71 to 1971-72 . . + 5,132 + 5,316 + 1,064 + 1,823

+ 2,199 +759 + 16,293

Persons registered for employment: 1974-75 . .

Annual variation— 44,562 34,113 22,454 14,070 12,463 3,284 130,946

From 1973-74 to 1974-75 . . + 5,421 +9,554 + 3,960 +636 + 2,320

+ 48 + 21,939

From 1972-73 to 1973-74 . . -3 ,9 6 2 -3 ,0 1 2 +980 - 1,121 -7 8 3

-4 5 8 -8 ,3 5 6

From 1971-72 to 1972-73 . . + 10,072 + 54 + 3,161 + 3,371 + 1,389

+919 + 18,966

From 1970-71 to 1971-72 . . + 11,688 + 11,281 + 3,546 + 3,956 +4,176

+ 527 + 35,174

Vacancies registered: 1974-75 . ·

Annual variation— 21,096 15,586 9,916 7,471 7,107 2,167 63,343

From 1973-74 to 1974-75 . . -10,296 -10,433 + 1,841 +928 +2,251

+702 -15 ,0 0 7

From 1972-73 to 1973-74 . . + 14,731 + 11,735 + 3,410 + 2,741 +2,034

+ 365 + 35,016

From 1971-72 to 1972-73 . . + 2,334 + 3,073 + 1,345 +913 + 758

+ 198 + 8,621

From 1970-71 to 1971-72 . . -6 ,1 2 5 -3 ,5 0 3 - 1 6 5 - 2 2 9 -1 ,5 1 6

- 1 8 2 -11 ,7 2 0

(a) Includes Australian Capital Territory. (b) Includes N orthern Territory. ( + ) Increase. ( - ) Decrease.

144

Table D-2 — AVERAGE EARNINGS: ANNUAL INCREASE (Average Weekly Earnings per Employed Male Unit: Based on Average for First Three Quarters of Each Financial Year)

Percentage increase over previous year

1971-72 1972-73 1973-74 1974-75

New South Wales 10.43 7.97 14.79 26.99

Victoria 9.03 9.10 14.53 26.43

Queensland 11.77 10.83 14.88 27.42

South A ustralia 10.92 7.83 17.78 28.40

Western A ustralia 12.30 3.85 15.29 27.45

Tasmania 11.52 8.16 15.40 27.06

Australia (a) 10.42 8.33 15.20 26.87

(a) Includes A ustralian Capital Territory and N orthern Territory.

Table D-3 — CONSUMER PRICE INDEX: ANNUAL INCREASE (Based on All Groups Index Numbers for State Capital Cities—Average of Quarterly Figures)

Percentage increase over previous year

1971-72 1972-73 1973-74 1974-75

Sydney 8.09 6.06 12.93 16.34

M elbourne 5.88 6.25 13.19 16.62

Brisbane 6.52 5.76 13.57 15.47

Adelaide 5.98 6.08 13.76 17.97

Perth 5.76 5.54 10.38 18.18

Hobart 6.51 5.65 12.51 16.94

Weighted Average of Six State Capital Cities 6.81 6 .0 2 12.99 16.71

Table D-4 — RETAIL SALES ( a ) : ANNUAL INCREASE (Value of Retail Sales of Goods per Head of Population)

Percentage increase over previous year

1971-72 1972-73 1973-74 1974-75 (b)

New South Wales 11.92 8.72 18.31 11.75

Victoria 6.45 9.97 19.74 14.06

Queensland 13.23 7.78 19.55 13.52

South Australia 10.77 9.02 19.45 15.96

Western Australia 5.01 7.85 18.27 14.90

Tasmania 5.99 9.32 17.63 18.64

Six States 9.66 8.85 18.95 13.46

(a) M otor vehicles, parts, petrol, etc., are excluded. (b) Based on first three quarters.

145

Table D-5 —BUILDING ACTIVITY: 1974-75 AND ANNUAL VARIATION (Based on Number of Dwellings commenced per 100,000 of Mean Population)

Percentage variation from previous year C om m ence­ m ents

1971-72 1972-73 1973-74 1974-75 1974-75

New South Wales — 0.19 + 5.11 + 2.79 — 26.16 841

Victoria + 6.45 + 18.64 — 5.50 — 23.75 915

Queensland + 20.76 + 22.61 — 1.34 — 43.09 877

South A ustralia + 0.54 + 7.48 — 2.07 — 17.77 972

Western A ustralia — 2.35 + 21.73 — 6.79 — 25.80 1,113

Tasm ania — 6.75 + 14.34 + 9.99 — 18.90 79 8

Six States + 4.31 + 13.84 — 1.50 — 24.56 940

(+ ) Increase. (— ) Decrease.

Table D-6 — REGISTRATION OF NEW MOTOR VEHICLES: 1974-75 AND ANNUAL VARIATION (Based on Number of Registrations per 100,000 of Mean Population)

Percentage variation from previous year N um ber of

1971-72 1972-73 1973-74 1974-75 1974-75

New South Wales — 2.29 + 4.86 + 6.05 + 5.77 4,766

Victoria — 2.46 + 2.75 + 8.35 + 8.16 4,336

Queensland + 6.39 + 9.75 + 1.61 — 0.96 4,135

South Australia — 1.45 + 6.80 + 7.02 + 18.01 5,038

Western A ustralia — 6.23 + 0.91 + 7.38 + 1.39 4.944

Tasmania + 0.08 + 8.53 + 4.00 + 19.24 4,957

Six States — 1.42 + 4.90 + 6 .1 2 + 6.53 4,598

(+ ) Increase. (— ) Decrease.

Table D-7 — SAVINGS BANK DEPOSITS: ANNUAL INCREASE (Based on Value of Depositors’ Balances per Head of Mean Population — Average of Monthly Figures for Each Financial Year)

Percentage increase over previous year

1971-72 1972-73 1973-74 1974-75 (a)

New South Wales 5.26 12.77 13.38 2.62

Victoria 7.76 17.25 16.35 8.95

Queensland 7.06 16.60 15.01 4.39

South A ustralia 7.76 15.88 14.59 8.91

Western A ustralia 6 .2 2 12.27 i 6 . i 8 ; 6.36

Tasmania 11.01 14.18 16.45 9.37

Six States 6.77 15.09 14.99 1.81

(a) Based on first three quarters.

146

Table D-8 — BANK DEBITS: ANNUAL INCREASE (All Cheque-paying Banks, Debits to Customers’ Accounts per Head of Population: Based on Average Weekly Figures for Each Financial Year)

Percentage increase over previous year

1971-72 1972-73 1973-74 1974-75

New South Wales 8 .2 0 28.71 9.95 11.81

Victoria 8 .1 1 26.49 13.28 7.47

Queensland 10.99 27.80 23.14 5.87

South A ustralia 7.28 14.34 21.64 6.63

Western A ustralia 4.41 1 0 .2 1 21.80 13.62

Tasm ania 8.29 21.65 19.89 15.31

Six States 8.09 25.77 13.51 9.45

Table D-9 — INSTALMENT CREDIT ( a) : ANNUAL VARIATION (Based on Amount Financed per Head of Mean Population by Finance Companies and Other Businesses)

Percentage variation from previous year

1971-72 1972-73 1973-74 1974-75 (b)

New South W ales (c) + 3.00 + 3.36 + 3.41 + 1.71

Victoria + 6 .1 0 + 3.82 + 4.92 + 0 .1 2

Queensland + 4.81 + 12.93 — 6.45 — 5.94

South A ustralia {d) — 3.89 + 5.14 + 5.66 + 2.87

Western A ustralia — 1 .01 + 7.47 — 7.24 — 18.80

Tasmania + 5.46 + 10.95 + 4.04 + 18.61

Australia (e) — 1.21 + 5.75 + 1.32 — 1 .2 0

(а) F rom July 1973 excludes figures for commercial m otor vehicles and plant and

machinery. (б ) Based on first three quarters. (c) Includes A ustralian Capital Territory until June 1974. (d) Includes N orthern T erritory until June 1974. (e) Includes A ustralian Capital Territory and N orthern Territory until June 1974.

(+ ) Increase. (— ) Decrease.

147

APPENDIX E

Statistics o f State Finances

148

Table E - l — PUBLISHED SURPLUSES AND DEFICITS OF THE STATES, 1955-56 TO 1973-74

1955- 56

1956- 57

1957- 58

1958- 59 1959- 60

1960- 61

1961- 62 1962- 63 1963- 64

1964- 65

1965- 66

1966- 67

1967- 68 1968- 69

1969- 70

1970- 71 1971- 72

1972- 73 1973- 74

Year

New South Wales Victoria Queensland South Australia

Surplus Deficit Surplus Deficit (a) Surplus Deficit Surplus Deficit

$ '0 0 0 $ ’0 0 0 $ '0 0 0 $ '0 0 0 $ ’0 0 0 $ '0 0 0 $’000 $ ’0 0 0

13.668 6,490 3,446 2,860

258 8,622 30 98

94 6,426 3,028 798

86 5,096 2,382 2,054

140 628 330 622

676 340 1,236 2,376

6,266 22 2 2 0 1,014

372 2 54 580

544

5,070

506 442

4,076

3,250

2,622

4,687 8,135 3,520 6,834

3,146 258 106

459 2,794 970 2,860

3,587 2,461 911 460

4,402 (6)15,382 3,544 2,920

(c)7,385 13,805 521 21

(c)5,485 6,711 2,712 1 ,0 6 6

(c)3,197 15,797 1,206 3,911

(c) 16,544 2,583 1,509 3,401

Surplus

$'000

830

istralia Tasmania

Year

Deficit Surplus Deficit

$ ’0 0 0 $ ’0 0 0 $ ’0 0 0

3,662 230 1955-56

3,824 1,626 1956-57

2,246 1,624 1957-58

3,370 1,816 1958-59

2,812 2,064 1959-60

2,410 394 1960-61

1,928 716 1961-62

1,506 982 1962-63

2,792 1,186 1963-64

4,698 1,618 1964-65

10 2 ,0 2 1 1965-66

27 572 1966-67

1,851 1967-68

1,056 3,695 1968-69

712 2,815 1969-70

4,368 2 2 1970-71

891 2,455 1971-72

3,490 4,132 1972-73

5,731 3,150 1973-74

Source: State Public Accounts. Note: For 1971-72 to 1973-74 in the case of Queensland, from 1955-56 to 1958-59 and from 1970-71 to 1973-74 fo r South A ustralia, from 1955-56 to 1966-67 for W estern A ustralia and from 1955-56 to 1971-72 for Tasm ania, the published budget results do not take into account the com pletion parts of special grants determ ined two years later. T able E-2 shows the budget results of these States each year after taking

these com pletion parts into account. (a) From 1970-71 determined by reference to the revenue transactions in the Consolidated Fund. (b) Reflects the receipt of a special advance of $10m from the A ustralian G overnm ent (see paragraph 4.94 of the 40th R eport (1973)). (c) Reflects the inclusion of $ 15.9m of interest-free capital grant from the A ustralian G overnm ent in 1970-71, special advances of $17.5m in

1971-72 and $15m in 1972-73, and $16m of interest-free capital grant in 1973-74.

Table E-2 - PAYMENTS OF SPECIAL GRANTS RECOMMENDED BY THE GRANTS COMMISSION AND BUDGET RESULTS OF THE CLAIMANT STATES SINCE 1955-56

V) o

Year

Queensland South Australia W

Special grant paid (a)

Published budget result (b)

Final budget result (c)

Special grant paid (a)

Published budget result (b)

Final budget result 09

Special grant paid 0 0

$ ’0 0 0 $ ’0 0 0 $ ’0 00 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

1955-56. . -3 ,4 4 6 -3 ,4 4 6 10,800 -2 ,8 6 0 (d) 17,800

1956-57. . + 30 4- 30 11,600 - 98 nil 18,400

1957-58. . -3 ,0 2 8 -3 ,0 2 8 11,400 - 798 nil 20,300

1958-59. . -2 ,3 8 2 -2 ,3 8 2 10,500 -2 ,0 5 4 nil 2 2 ,2 0 0

1959-60. . - 330 - 330 092,852 - 622 - 622 ( / ) 7,000

1960-61. . -1 ,2 3 6 -1,236 + 2,376 +2,376 8,618 1961-62. . + 2 2 0 4- 220 + 1,014 + 1,014 12,312 1962-63. . + 54 4- 54 + 580 + 580 12,420 1963-64. . + 442 4- 442 + 3,250 + 3,250 12,144 1964-65. . -4 ,0 7 6 -4 ,0 7 6 -2 ,6 2 2 -2 ,6 2 2 17,1201965-66. . -3 ,5 2 0 -3 ,5 2 0 -6 ,8 3 4 -6 ,8 3 4 24,038 1966-67. . + 258 + 258 + 106 + 106 19,406 1967-68. . + 970 + 970 -2 ,8 6 0 -2 ,8 6 0 15^518 1968-69. . - 911 - 911 + 460 + 460 (g)582 1969-70. . -3 ,5 4 4 -3 ,5 4 4 +2,920 +2,9201970-71. . 521 - 521 (A)5,000 + 21 + 7,521 1971-72. . (h)9 000 +2,712 +2,712 (/?)7,000 -1 ,0 6 6 + 3,834 1972-73. . (h) 10,000 4-1,206 + 10,956 2 1 ,0 0 0 -3,911 +4,589 1973-74. . 10,000 -1 ,5 0 9 + 9,791 19,900 -3,401 — 901 1974-75. . 24,750 —8,353 23,500 + 8,384 OG+8,384

Western Australia

Published budget result (6)

$’000

-3,662 -3,824 -2,246 -3,370

-2,812

-2,410 -1,928 -1,506

-2,792 -4,698

- 10

- 27

+ 830

-1,056 - 712

-4,368 - 891

-3,490 -5,731 —9,133

(—) Deficit.

Tasmania

Final Special Published Final

budget grant budget budget

result paid result result

09 (a) (b) 09

$ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

-3 ,0 1 8 8,400 + 230 -1 ,4 0 2

-1 ,1 4 0 7,000 -1 ,6 2 6 -1 ,6 5 4

-1 ,5 4 4 7,300 -1 ,6 2 4 - 18

-2 ,1 5 2 8,800 -1 ,8 1 6 + 2

- 900 ( / ) 6,800 -2 ,0 6 4 - 114

-1 ,7 9 0 8,618 - 394 - 112

-1 ,5 8 4 10,150 - 716 - 160

- 186 10,082 - 982

+ 246 10,756 -1 ,1 8 6 + 146

+ 8 14,600 -1 ,6 1 8 - 452

+ 8 17,732 - 2,021 -1 ,1 3 2

+ 555 2 0 ,6 6 6 - 572 -1 ,7 6 2

+ 830 19,889 -1,851 -1,951

-1 ,0 5 6 16,810 -3 ,6 9 5 -2 ,0 1 5

- 712 21,900 +2,815 - 385

-4 ,3 6 8 0)13,680 + 2 2 -2 ,3 7 8

- 891 7,800 -2 ,4 5 5 -3 ,8 0 5

-3 ,4 9 0 7,600 -4 ,1 3 2 O')-4 ,1 3 2

-5,731 8,650 - 3 150 O')-3 ,1 5 0

—9,133 — 13,543 *

1 Not yet determined.

Includes^advance^grant'when paid* ^ Sh°Wn pluS comPletion 8rant for year of review (see paragraph 3.15). ( a )

(b) . . ...

(c) Published budget result plus completion grant for the year shown 0 0 X T~‘ " ■ ------

(e) (/)

Not available, see 37th Report (1970) page 118. Covers published deficits for 1957-58 and 1958-59 in total. From 1959-60 grants55"60 ' nCreaSeS Were n,ade in the financial ass'stance grants for W estern^Js^raH a M ^ T a sm a n ia T o “re L c e 0' ^ " ^ dependence

$ Completion grant for 1966-67 (see paragraph 2.43 (c) of 39th Report (1972) and Table E-3) (h) Advance grant only. ’’

Z &ssss sss. t srgs ssr- - T “- (/) No completion grant determined. Tasmania withdrew from claimancy from 1 July 1974 (see paragraphs 2 53 and 2 59) ' 5011111 Australia withdrew from rhimnnm 4mmig 197L-7i_(.S£t; paragraph 2.55). ' on special

Finally adjusted grant

$’000

18,394 20,888 20,358 20,734

8,210

8,020 10,744 13,120 14,838 20,506

21,018 15,282 15,500

Tasmania

Advance grant

Final

completion grant

Finally adjusted grant

$ ’0 0 0 $ ’0 0 0 $ ’0 0 0

8,768 -1 ,6 3 2 7,136

7,314 - 28 7,286

8,932 1.606 10,538

8,828 1,818 10,646

(c)5,194 1,950 7,144

6,800 282 7,082

8 ,2 0 0 556 8,756

9,800 982 10,782

1 0 ,2 0 0 1,332 11,532

13,618 1,166 14.784

16,400 889 17,289

19,500 -1 ,1 9 0 18,310

19,000 - 100 18,900

18,000 1,680 19,680

2 2 ,0 0 0 -3 ,2 0 0 18,800

(e)2 2 ,0 0 0 -2 ,4 0 0 (e) 19,600

11,0 0 0 -1 ,3 5 0 9,650

10,0 0 0 to 1 0 ,0 0 0

1 0 ,0 0 0 t o 1 0 ,0 0 0

( / ) ( / )

( 0 ( / ) ( / )

Table E-4 — STATE EXPENDITURE ON CERTAIN SOCIAL SERVICES FROM CONSOLIDATED REVENUE AND SPECIAL FUNDS: NET EXPENDITURE 1973-74

Table E-4 — STATE EXPENDITURE ON CERTAIN SOCIAL SERVICES FROM CONSOLIDATED REVENUE AND SPECIAL FUNDS: NET EXPENDITURE 1973-74 — continued

Western Australia Tasmania S ix States

Per Capita Amount Per Capita Amount

Per Capita Amount Per

$ $’000 $ $’000 $ $’000 $

1 .66 1,786 1.64 1,524 3.82 27,431 2.11

16.27 18,656 17.20 7,744 19.41 202,646 15.59

3.20 7,015 6.47 1,786 4.48 41,843 3.22

1.07 1.23 1,082 1.00 1,044 2.61 13,934

22.36 28,539 26.31 12,098 30.32 285,854 21.99

228.10 270,020 248.92 97,569 244.54 2,711,018 208.61

222.53 273,220 251.81 97,085 243.32 2,644,240 203.47

5.57 -3 ,2 0 0 - 2 . 9 4 484 1.22 66,778 5.14

185.58 221,095 207.73 82,140 207.99 2,271,155 177.06

158.44 194,498 185.84 69,193 176.33 1,922,718 151.92

128.87 155,343 153.27 59,342 152.28 1,604,169 128.98

106.35 128,527 131.81 49,412 127.78 1,344,280 110.17

97.20 94.82 105,204 112.40 43,997 114.96 1,162,237 87.10 92,627 103.29 38,079 100.84 1,029,888 87.74

79.43 79.22 76,389 88.46 36,305 97.25 916,887

77.01 69,829 83.40 32,273 87.23 827,269 72.87

70.31 62,526 76.52 30,100 82.16 762,997 68.48

65.11 55,488 69.46 26,866 74.06 683,172 62.49

58.82 50,322 64.73 24,330 67.93 624,102 58.16

55.68 47,004 62.19 23,034 65.22 580,756 55.12

49.74 43,746 59.96 20,932 59.79 533,038 51.69

45.85 38,596 53.81 19,390 56.35 480,324 47.61

41.87 34,802 49.30 17,280 51.13 429,682 43.48

37.85 33,146 47.79 16,278 49.02 396,714 40.98

35.78 30,128 44.24 15,892 48.95 364,398 38.46

Note: This table is prepared for the Commission each year by the A ustralian Bureau o f Statistics. Because o f difficulties in obtaining uniform classification o f expenditure, precise com parison among the States to r specific items cannot be made. A num ber o f particular factors affecting comparisons o f particular items are referred to in paragraphs 5.8 to 5.16. Figures may n o t be fully comparable from year to year (e.g. see paragraph 5.12). Any discrepancies between totals and sums o f com ponents in the table are due to rounding, n.a. N o t available. * Excludes expenditure on the transportation o f pupils which is included in 1 (a) (ii) above. In Tasm ania expenditure on non-governm ent schools is included in A dm inistrative and general.

Primary and Secondary above, t Including adult education, t Including colleges o f advanced education.

T a b le E - 5 STATE TAXATION AND NET LOTTERY REVENUE, 1973-74

(Excludes Revenue from Fines)

Tax

M otor— Registration fees and tax · ■

Drivers’, etc., licences · · ·

Stamp duty on registrations · ·

Third party insurance taxation ·

Road maintenance charges · ·

Other ■ · · ■ . .

Total m otor · ■ · ·

Probate, succession and gift duties · Stamp duties, n.e.i. · · · .

L a n d ...................................................

Entertainments · · · .

L i q u o r ...................................................

Racing (includes stamp duty on betting tickets, etc ) (a) Poker machines (6) · · · · ' v ’

Lotteries (net revenue and stamp duties) (c) Statutory corporation payments · · C a s i n o ...................................................

Tobacco · ■ · · . .

P a y - r o l l ...................................................

Licences, n.e.i. and all other · ·

Total State taxation and net lottery revenue

Paid to consolidated revenue * . . .

Paid to special funds · · · . .

Total revenue used for comparison of taxable capacities {d)

Footnotes and source: see next table

New South Wales Victoria

$ ’0 0 0 $ ’0 0 0

101,795 62,064 14,612 7,876

7,152 17,309

— 5,692

19,695 10,359

3,573 3,606

146,827 106,906 77,077 59,499

156,217 144,664 54,092 32,958

— 325

21,742 14,373

40,825 32,939

49,836 22,726 15,062

Ξ 11,900

303,322 221,080 5,039 9,216

877,703 648,922

675,477 558,144 202,226 90,778

732,989 555,801

Queensland

$ ’000

31,512 1,964 5,631

5,420 8,254

52,781 21,787 55,936 6,420

8,806 13,415

5,538

93,787 14,487

272,957

220,857 52,100

211,320

South Australia

$ ’000

20,488 1,878 6,037 1,096

3,859 61

33,419 13,782 35,860 10,396

4,160 5,428

2,578 3,755

54,276 1,355

165,009

153,817 11,192

137,368

Western Australia

$’000

17,339 2,044 2,994 2,592

3,682 1,260

29,911 10,101 27,686 10,186

5,933 7,531

2,648

58,579 3,070

155,645

129,484 26,161

128,250

Tasmania

$ ’000

7,237 958 609 358

461

9,623 3,398 6,952 3,055

153

1,590 1,278

228 1,362 1,605 1,247 17,681

76

48,248

48,160 88

39,516

Total

$ ’000

240,435 29,332 39,732 9,738 43,015

17,215

379,467 185,644 427,315 117,107

478

56,604 101,416 49,836 48,780

17,017 1,605 1,247 748,725

33,243

2,168,484

1,785,939 382,545

1,805,244

T a b le E - 6 — STATE TAXATION AND NET LOTTERY REVENUE PER CAPITA, 1973-74

(Excludes Revenue from Fines)

M otor · · · ■ · ■ ■ ■ · · ·

Probate, succession and gift duties . . . . . .

Stamp duties, n.e.i. . · . · · ■ · ■ ·

Land . . . . . · · ■ · ■ ·

Entertainments . . . . . . . . .

L i q u o r .......................................................................................................

Racing (includes stamp duty on betting tickets, etc.) (a) ■ ■ ■ Poker machines (b) ■ · ■ ■ ■ ■ ■ ■ ■

Lotteries (net revenue and stamp duties) (c) . . . .

Statutory corporation payments · · ■ · · · ·

Casino . . . . ■ · · · · · ·

Tobacco · · · · · · · · · · ·

Pay-roll · · . · · · · · · · ·

Licences, n.e.i. and all other . . . . . . .

Total State taxation and net lottery revenue ■ ■ ·

Paid to consolidated revenue . . . . . . .

Paid to special funds . . . . . . . .

Total revenue used for comparison of taxable capacities (d) ■

31- 00

16-28 32- 99

11-42

4-59 8-62 10-52 4-80

64-05 1-06

185-33

29-53 16-44 39-96 9-10

0-09 3- 97 9-10

4 - 16

3-28

61-07 2-55

179-25

2 7 - 14

11-20 28- 76

3 - 30

4 - 53

6-90

2-85

48-23 7-45

140-36

27-60 11-38 29-62 8.59

3- 43

4 - 48

2 - 13

3 - 10

44-83 1-12

136-28

27-57 9-31 25-52 9-39

5- 47

6 - 94

2-44

54-00 2-83

143-47

24-13 8-52 17-43 7-66

0-38 3-99 3-20

0-57 3- 42

4 - 02

3-13 44-34 0-19

120-98

29-20 14-29 32-88 9-01

0 - 04

4-36 7-80 3-84 3-75

1- 31 0-12 0-10 57-61

2 - 56

166-87

142-63 42-70

154-17 25-08

113-57 26-79

127-04 9-24

119-36 24-11

120-76 0-22

137-43 29-44

154-78 153-53 108-66 113-45 118-22 99-09 138-92

(«) Excludes amounts paid to clubs. (6 ) Amount paid to Hospital Fund only. (c) Part of this revenue is excluded from comparisons of taxable capacities as the am ounts excluded are used for capital purposes. (d) Excludes (i) m otor taxes other than stamp duty on registrations, and third party insurance taxation; and

(ii) licences, n.e.i. and all other.

Source: Australian Bureau of Statistics, State Public Accounts and R eports of A uditors-General.

T a b l e E - 7 — STATE TAXATION AND NET LOTTERY REVENUE, 1955-56 TO 1973-74 (Includes Amounts Paid to Special Funds and Excludes Revenue from Fines)

Year

New South Wales

Victoria Queens­ land South Australia

Western Australia Tasmania Total

T otal R evenue

I $ ’0 0 0 $ '0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

1955-56 . . . 77,582 60,008 32,438 16,150 12,064 7,800 206,042

1956-57 . . . 94,704 69,920 34,358 18,622 13,692 8,628 239,924

1957-58 . . . 106,332 80,222 37,858 19,544 16,228 7,828 268,012

1958-59 . . . 116,664 85,554 40,146 21,152 16,014 8,614 288,144

1959-60 . . . 132,246 103,276 48,716 23,044 18,838 8,856 334,976

1960-61 . . . 138,010 111,892 48,246 24,204 19,850 9,246 351,448

1961-62 . . . 147,698 115,638 51,504 25,902 21,368 9,746 371.856

1962-63 . . . 170,848 121,964 57,046 27,690 24,142 10,318 412,008

1963-64 . . . 201,384 135,610 63,692 30,620 27,852 11,256 470,414

1964-65 . . . 217,107 151,493 68,017 37,255 30,687 12,065 516,624

1965-66 . . . 228,974 168,261 70,727 38,834 36,126 12,856 555,778

1966-67 . . . 250,088 188,398 82,740 44,586 45,167 14,328 625,307

1967-68 . . . 280,865 212,066 96,437 49,001 54,201 16,459 709,029

1968-69 . . . 315,060 250,683 102,150 55,193 63,882 18,045 805,013

1969-70 . . . 362,254 264,676 111,197 63,727 74,968 20,215 897,037

1970-71 . . . 382,907 276,975 .116,227 67,244 72,464 21,072 936,889

1971-72 . . . 561,882 393,489 168,125 103,137 104,262 30,459 1,361,354

1972-73 . . . 724,705 494,978 217,315 126,881 123,338 37,606 1,724,823

1973-74 . . . 877,703 648,922 272,957 165,009 155,645 48,248 U 68,484

R evenue per C apita

$ $ $ $ $ $ $

1955-56 . . . 2 2 .0 1 23.48 23.84 19.35 18.09 24.51 22.25

1956-57 . . . 26.38 26.63 24.64 21.62 2 0 .1 1 26.58 25.32

1957-58 . . . 29.05 29.86 26.62 22.06 23.40 23.58 27.68

1958-59 . . . 31.28 31.11 27.68 23.28 2 2 .6 8 25.44 29.16

1959-60 . . . 34.83 36.62 32.96 24.68 26.26 25.73 33.20

1960-61 . . . 35.61 38.68 32.08 25.28 27.20 26.42 34.09

1961-62 . . . 37.37 39.11 33.45 26.45 28.27 27.60 35.29

1962-63 . . . 42.49 40.49 36.49 27.73 31.05 28.81 38.40

1963-64 . . . 49.37 44.12 39.93 29.92 34.87 31.03 43.03

1964-65 . . . 52.41 48.30 41.81 35.41 37.55 32.93 46.37

1965-66 . . . 54.39 52.68 42.60 35.90 43.15 34.78 48.96

1966-67 . . . 58.61 57.97 49.04 40.42 52.31 38.38 54.17

1967-68 . . . 64.87 64.22 56.22 43.92 60.44 43.59 60.41

1968-69 . . . 71.56 74.68 58.46 48.78 68.25 47.15 67.33

1969-70 . . . 80.68 77.38 62.47 55.46 76.88 52.28 73.52

1970-71 . . . 83.75 79.56 64.13 57.57 71.50 54.07 75.33

1971-72 . . . 120.92 111.29 90.83 87.13 99.62 77.63 107.56

1972-73 . . . 154.33 138.30 114.58 106.13 115.90 95.24 134.48

1973-74 . . . 185.33 179.25 140.36 136.28 143.47 120.98 166.87

Source: A ustralian Bureau of Statistics, State Public Accounts and Reports of A uditors-G eneral.

156

APPENDIX F

The Budgets of the States, 1971-72 to 1973-74 F .l In this appendix the published budget of each State is rearranged and summarised in a table showing figures for certain categories of revenue and expenditure for the years 1971-72 to 1973-74. The appendix also includes brief comments on the principal movements occurring in this period. It should be noted that the items in the tables are not necessarily comparable as between

States because of differences in accounting and financial practices. The main differences are as follows:

(a) The Tasmanian Transport Commission’s receipts and expenditures do not form part of that State’s budget but the Commission’s loss in any year is reimbursed from consolidated revenue in the following year. Instead of showing the reimbursement in a particular year as an

expenditure item, this appendix shows the receipts and expenditures which give rise to the net loss reimbursed. For this reason the receipts and expenditures shown for a particular year relate to the Transport Commission’s operations for the preceding year.

(b) The whole of the profit from lotteries is excluded from consolidated revenue in Queensland, South Australia and Western Australia. In Victoria and Tasmania lottery revenue is paid to consolidated revenue and, with the exception of funds used for the Opera House, this applies

to New South Wales also.

(c) The finances of certain business undertakings are reflected in the budget summaries for some States but excluded partially or wholly in others.

(d) In Victoria, South Australia, Western Australia and Tasmania transfers from consolidated revenue as contributions towards the losses of the metropolitan transport authorities appear as special items of expen­ diture, whereas in New South Wales the full revenue and expenditure

of the transport authorities are included in the revenue and working expenses of ‘Road transport undertakings’.

(e) The different States receive a variety of Australian Government pay­ ments for specific expenditure purposes, and the extent to which such payments and the corresponding expenditures are included in consolidated revenue differs from State to State. Where possible the

Commission has excluded these items from both revenue and expen­ diture: where they have been included, equal amounts generally appear in both the revenue and expenditure of the State, but in some cases the budget result is affected by time lags between the relevant expen­

ditures and receipts.

F.2 Taxation revenue shown in the following tables differs in some instances from the figures for total taxation paid to consolidated revenue as shown in Table E-5 of Appendix E. This is because of some classification differences and

157

certain alterations which have been made to the amounts in Appendix E in order to arrive at a net figure.

F.3 In this Report the classification of items in the budgets of the States is the same as that used for the 41st Report (1974). As mentioned in paragraph F.3 of that Report, to the extent that debt charges due on advances to an undertaking from State loan funds are covered by a surplus of the undertaking’s current receipts over its current expenditure, they are shown as an item of the undertaking’s expen­ diture, and also included in the general revenue item ‘Debt charges recoveries’; otherwise they are included only in the general expenditure item ‘Debt charges’.

F.4 In all States the budgets reviewed in this appendix were affected by changes in the level of Australian Government payments to the States associated with changes in financial arrangements between the States and the Australian Government. These changes are described in Chapter 2 of this Report (para­ graphs 2.42 to 2.51). In addition to arrangements affecting particular States which are referred to in the following comments on individual State budgets, the budgets of all the States were affected by:

(a) relatively small increases in the financial assistance grants in 1971-72 (reductions in the amounts paid to New South Wales and Victoria) as a result of the offsets made for the transfer of pay-roll tax to the States from 1 September 1971; (b) the introduction of debt charges assistance grants totalling $ 1 1 .5m

commencing in 1970-71, and increasing by a similar amount in each subsequent year; (c) payment of special revenue assistance in 1971-72 by way of non­ recurring grants, a total of $55m having been distributed among the

States in proportion to their financial assistance grants; (d) a permanent increase of $1 1 2 m in the financial assistance grants pay­ able in 1972-73, which was incorporated into the formula grants for the purpose of calculating the grants for subsequent years and

distributed in proportion to the 1971-72 formula grants escalated under the formula applicable for 1972-73; (e) acceptance by the States of the Australian Government’s offer to take full responsibility for financing tertiary education from 1 January

1974, subject to an offset of $111.8m by way of deduction from the financial assistance grants paid in 1973-74; and (/) payment of special revenue assistance of $25m to the States in 1973-74, distributed in proportion to their financial assistance grants.

F.5 Comparisons of the rates of increase in general revenue payments from the Australian Government over the three-year period are difficult because of the transfer of pay-roll tax to the States on 1 September 1971 with offsetting adjust­ ments to the financial assistance grants for each State. They are also compli­

cated by the increase in the per capita grants to New South Wales and Victoria from $2 to $3.50 in 1972-73, which added $7.0m and $5.4m respectively to the financial assistance grants for those States. In addition, in 1971-72 and 1972-73 New South Wales received special advances of $ 17.5m and $15m respectively for budgetary purposes (see paragraph 4.5 of the 41st Report (1974)). The total of the general revenue payments to the States from the Australian Government increased by approximately 13 per cent in 1973-74, compared with an increase of approximately 10 per cent in 1972-73. Total revenue from the States’ own

158

sources increased by 21.3 per cent in 1973-74, compared with 16.3 per cent in 1972-73. The increase of $592.3m in 1973-74 reflected large increases in tax and other revenue, of which $248m resulted from increased collections of pay-roll tax at substantially higher rates imposed in September 1973, $89.1m resulted from

increased revenue from stamp duty, and the balance was mainly due to increased revenue from debt charges recoveries, railway operations and social services departments (except in New South Wales and Tasmania, where social services revenue declined by $6.9m (see paragraph F .ll) and $125,000 (see paragraph F.42) respectively). The large increase in overall revenue in 1973-74 was more than offset by higher expenditure, particularly as a result of increased rates of salaries and wages.

F .6 The total expenditure of the States increased by 18.2 per cent in 1973-74, compared with an increase of 14.3 per cent in 1972-73. The operations of business undertakings for 1973-74 resulted in substantial increases in net costs to State budgets as compared with 1972-73. These increases appear to have been mainly due to increases in salary and wage levels and prices, rather than to improve­

ments in standards of services. In 1973-74 there were also substantial increases in expenditure on social services in all States. In 1973-74 the overall deficit for the States was $32.9m, an increase of $3.6m over the 1972-73 figure of $29.3m. In 1971-72 the overall deficit was $13.9m.

N e w So u t h W a l e s

F.7 The published budget result for 1973-74 was a deficit of $16.5m, com­ pared with deficits of $3.2m and $5.5m in 1972-73 and 1971-72 respectively. Total revenue increased by $264.6m (16.1 per cent) in 1973-74, $77.8 m more than the increase of $186.8m (12.8 per cent) in 1972-73. Total expenditure increased

by $278m (16.9 per cent) in 1973-74, $93.5m more than the increase of $184.5m (12.6 per cent) in 1972-73. Included in the 1972-73 and 1971-72 budget results were receipts into Consolidated Revenue Fund of special advances of $15m and $17.5m respectively (interest-free in the first year and repayable over a period of five years) from the Australian Government. The budget result for 1973-74

reflected the credit of $16m representing part of the New South Wales share of the interest-free capital grants from the Australian Government. These grants, which form part of the Loan Council programs of the States, were first paid in 1970-71 (see paragraph 2.42). The Commission modified the amount of $16m

from the 1973-74 budgetary accounts for New South Wales (see paragraph 4.178). However, as explained in paragraphs 4.5 to 4.7 of the 41st Report, the Commission decided not to make any modifications for the special advances of $15m and $17.5m included in the budget results for 1972-73 and 1971-72 respectively. In the budget summaries for New South Wales these amounts are shown in the

item ‘Special advances’ in 1972-73 and 1971-72 and the amount of $16m is shown separately as ‘Interest-free capital grant’ in 1973-74.

F .8 Excluding the special advances, the Australian Government payments increased by $75.3m (14 per cent) in 1973-74, compared with an increase of $45.2m (9.2 per cent) in 1972-73.

F.9 State taxation receipts increased by $137.5m (25.5 per cent) in 1973-74, compared with an increase of $128.7m (31.3 per cent) in 1972-73. Pay-roll tax collections in 1973-74 amounted to $303.3m, an increase of $98.5m (48.1 per cent) over 1972-73 receipts, mainly due to an increase in the rate of tax from 3.5 to 4.5

159

T a b l e F - l — BUDGET SUMMARIES — NEW SOUTH WALES

Detail 1971-72 1972-73 1973-74

Revenue $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

A ustralian G overnm ent payments— Financial assistance grants . . . . . 462,204 521,963 585,507

Special revenue assistance . . . . . 18,313 7,926

Special advances . . . . . . . 17,500 15,000

Interest on State debts under Financial Agreem ent . 5,835 5,835 5,835

D ebt charges assistance . . . . . . 7,600 11,399 15,199

Total* . . . . . . . . 511,452 554,197 614,467

State taxation ....................................................................... 410,809 539,470 676,981

D ebt charges recoveries . . . . . . 55,969 58,005 66,159

Social services recoveries . . . . . . 47,819 57,729 50,826

Railways . . . . . . . . . 259,564 249,093 256,150

Road transport undertakings . . . . . 36,650 38,444 39,223

W ater supplies, sewerage, irrigation and drainage— m etropolitan . . . . . . . .

c o u n tr y ................................................................................. 636 830 1,044

H arbours and m arine—-M aritime Services Board . . . . . 30,371 29,201 40,591

other h a r b o u r s ............................................................ 8,915 9,127 10,898

Lands . . . . . . . . . 13,486 16,657 17,544

Mining . . . . . . . . . 9,044 8,567 12,538

F o r e s t r y ................................................................................. 7,950 9,069 10,204

Interest-free capital g r a n t .................................................. 16,000

Other revenue . . . . . . . . 64,971 74,005 96,372

T otal revenue . . . . . . . 1,457,636 1,644,394 1,908,997

Expenditure

D ebt charges . . . . . . . . 210,897 222,227 236,232

Social services . . . . . . . . 708,435 823,123 960,824

Railways— w orking expenditure, pay-roll tax and superannuation . . . . . . . 263,484 298,180 349,897

Road transport undertakings— working expenditure, pay-roll tax and superannuation . . . . 43,936 50,805 63,251

W ater supplies, sewerage, irrigation and drainage— subsidies to undertakings— m etropolitan . . . . . .

country . . . . . . . . 6 ,2 2 0 7,692 9,435

H arbours and m arine— M aritim e Services Board— working expenditure, pay-roll tax and superannuation . . . . 24,263 23,527 32,872

debt charges paid . . . . . . . 6,108 5,674 7,287

other harbours— working expenditure . . . 4,284 4,563 5,315

Lands . . . . . . . . . 9,708 11,119 12,519

Mining . . . . . . . . . 5,031 5,457 5,438

Forestry . . . . . . . . 10,365 11,669 12,864

A g r i c u l t u r e ............................................................ 21,623 23,997 30,887

Superannuation, n.e.i. . . . . 34,452 36,154 41,893

Pay-roll tax, n.e.i......................................................... 15,570 16,923 26,314

Other expenditure . . . . . . 98,745 106,481 130,513

T otal expenditure . . . . . . 1,463,121 1,647,591 1,925,541

Budget result . . . . . . . 5,485 3,197 16,544

1 Deficit 1 Deficit Deficit

* Some Australian Government payments are included in Other revenue’ items or offset against expenditure items. 1 6 0

per cent from 1 September 1973, together with higher wages and salaries. In 1 9 7 3 .7 4 receipts from stamp duties on contracts and conveyances increased by

$12.3m (15.1 per cent), compared with an increase of $37.5m (85 per cent) in 1972-73, when receipts reflected the greatly increased values and turnover for contracts and conveyances, and the operation for a full year of the increase in ad valorem duty imposed during 1971-72. Receipts from probate duties increased

by $7.4m (10.6 per cent) in 1973-74; revenue from land tax increased by $7.4m (15.7 per cent); and racing revenue increased by $6 m (17.2 per cent) during the same period. Revenue from mining increased by $4m (46.4 per cent) in 1973-74, in contrast to a decline of $477,000 (5.3 per cent) in 1972-73; the increase was wholly due to higher payments of royalties on silver, lead and zinc by the Broken

Hill mining companies.

F.10 In 1973-74 railway operating expenditure (including pay-roll tax and superannuation) exceeded railway revenue (excluding State subsidies) by $93.7m, compared with working deficits of $49.lm in 1972-73 and $3.9m in 1971-72. The main reason for the large increase in the working deficit in 1973-74 was the

increase of $42.lm in salaries and wages due to award variations, partially offset by an increase in earnings from the carriage of goods of $7.7m, mainly in the haulage of steaming coal and grains. Road transport undertakings recorded a working loss of $24m in 1973-74, compared with a $ 12.4m loss in 1972-73. This

resulted from an increase in working expenditure of $ 12.4m (24.5 per cent), due to increased rates of wages and salaries, and a smaller increase in earnings ($779,000 in 1973-74 compared with $1.8m in 1972-73). In 1973-74 revenue of the Maritime Services Board increased by $11.4m (39 per cent), mainly as a result

of the increase in cargo handled and higher port charges which applied for the full year. Working expenditure (including pay-roll tax and superannuation) increased by $9.3m (39.7 per cent) as the result of higher wage and salary rates.

F .ll In 1973-74 social services recoveries decreased by $6.9m (12 per cent). The main reasons for the large decrease in revenue were:

(a) a revision of health administration arrangements whereby receipts ($5.4m) for State hospitals and nursing homes were paid into the Hospital Fund instead of Consolidated Revenue Fund for the first time; (b) the abolition of technical education fees from 1 January 1974 following

the takeover of responsibility for technical education by the Australian Government ($4.4m); and (c) a reduction in recoupments of expenditure on police supervision and traffic control ($l,lm ).

This was partly offset by increased revenue for: miscellaneous services rendered for education ($1.3m); fees for the Corporate Affairs Commission, court fees and the Registrar-General ($lm ); child welfare miscellaneous receipts ($0.7m); and mental health services ($0.5m). Social services recoveries had increased by $9.9m

(20.7 per cent) in 1972-73.

F.12 On the expenditure side, social services expenditure increased by $ 137.7m (16.7 per cent) in 1973-74 and accounted for approximately half of the increase in total expenditure. Of the $137.7m, education accounted for $57.6m, health and welfare for $56.9m and law and order for $23.2m. In 1972-73 the increase in

expenditure on social services amounted to $114.7m (16.2 per cent). Expenditure on pay-roll tax, n.e.i. increased by $9.4m (55.5 per cent) in 1973-74, compared

161

with an increase of $1.4m (8.7 per cent) in 1972-73, as the result of an increase in the rate of tax from 3.5 to 4.5 per cent from 1 September 1973 and higher rates of wages and salaries.

V ic t o r ia

F.13 Total revenue increased by $227.6m (21 per cent) in 1973-74, com­ pared with $142.9m (15.2 per cent) in 1972-73. In 1973-74 total expenditure increased by $214.4m (19.5 per cent), compared with $152m (16 per cent) in 1972- 73. The deficit on revenue transactions was $2.6 m in 1973-74, a substantial reduction from the deficit of $15.8m recorded in 1972-73. In 1971-72 the deficit was $6.7m.

F.14 Australian Government payments increased by $50.3m (12.3 per cent) in 1973-74, compared with an increase of $36.8m (9.9 per cent) in 1972-73.

F.15 State taxation (which includes levies paid by the State Electricity Com­ mission and the Gas and Fuel Corporation) increased by $142.8m (34.2 per cent) in 1973-74, compared with an increase of $98.4m (30.8 per cent) in 1972-73. The large increase in taxation receipts in 1973-74 was mainly due to increased pay-roll tax rates operating from 1 September 1973. Pay-roll tax collections were $71.9m (48.2 per cent) greater than the 1972-73 figure of $149.1m. Other increases in taxation receipts occurred in Tattersalls duty, gift duty, stamp duty and probate duty; these items increased by $6.3m (68.1 per cent), $1.3m

(89.1 per cent), $45.9m (36.8 per cent) and $7.9m (16.2 per cent) respectively. The large increase in tax collections from Tattersalls duty was primarily due to the considerable increase in subscriptions to Tattslotto Consultations (from $ ll.lm to $33.9m) during 1973-74. Collections from stamp duty increased during

1973- 74, the main increases being in duty on real estate dealings ($25.3m) and duty on insurance business ($8 .7m). In addition, rates of duty were increased during the year.

F.16 Mining revenue increased by $8 .8 m (33.7 per cent) in 1973-74, com­ pared with an increase of $1.5m ( 6 per cent) in 1972-73. The increase was almost entirely due to petroleum royalties which were $34m in 1973-74, compared with $25.2m in 1972-73, an increase of 34.8 per cent. The increase in the royalty pay­ ment to the Australian Government, in accordance with the Petroleum (Submerged Lands) A ct 1967, was $2.9m (36.6 per cent), compared with an increase of $336,000 (4.5 per cent) in 1972-73.

F.17 Railway revenue excluding State government subsidies increased by $4.1m (3.7 per cent) in 1973-74, in contrast to the decrease of $1.7m (1.5 per cent) in 1972-73, mainly due to an increase in the number of passengers carried. Operating expenditure (including pay-roll tax and superannuation) increased by $32.6m (20.8 per cent) in 1973-74, compared with an increase of $ 17.5m (12.6 per cent) in 1972-73. The railway operating loss rose from $46.4m in 1972-73 to $75m in 1973-74.

F.18 In 1973-74 social services recoveries increased by $5.8 m (23.3 per cent). The main increases were: fees collected by the Registrar of Companies ($0.6m) and the Titles Office ($2.8 m); recoupments from the expenditure of the Motor Registration Branch ($0.8m); court fees ($0.5m); and charges for departmental services relating to mental health ($0.8m). Social services recoveries had increased by $3.2m (14.6 per cent) in 1972-73.

162

T a b le F -2 — BUDGET SUMMARIES — VICTORIA

Detail 1971-72 1972-73 1973-74

Revenue

Australian G overnm ent payments—-$ ’0 0 0 $ ’0 0 0 $ ’0 0 0

Financial assistance g r a n t s ........................................ 348,464 396,087 437,604

Special revenue a s s i s t a n c e ........................................ 13,621 6 ,0 2 0

Interest on State debts under Financial Agreement . 4,254 4,254 4,254

D ebt charges assistan ce.................................................. 5,566 8,349 11,131

T o t a l * ...................................................................... 371,905 408,690 459,009

State t a x a t i o n ...................................................................... 319,079 417,491 560,255

D ebt charges recoveries . . . . . 26,632 31,545 34,549

Social services recoveries . . . . . . 21,759 24,929 30,727

R a i l w a y s ................................................................................

W ater supplies, sewerage, irrigation and drainage— 111,645 109,915 114,006

m e tro p o lita n ...................................................................... . .

c o u n tr y ................................................................................ 16,290 17,144 18,780

H arbours and marine . . . . . . 4,746 4,280 4,790

Lands . . . . . . . . 2,955 3,021 3,320

Mining . . . . . . . . . 24,632 26,103 34,910

Forestry . . . . . . . . . 7,176 7,439 8,775

Other r e v e n u e ..................................................................... 34,570 33,700 42,783

T otal re v e n u e ............................................................ 941,389 1,084,257 1,311,904

Expenditure

Debt charges . . . . . . . . 156,105 166,289 177,872

Social services . . . . . . . .

Railways— working expenditure, pay-roll tax and 540,927 650,058 767,946

superannuation . . . . . . . 138,987 156,457 189,042

M etropolitan transport undertaking— advance . . W ater supplies, sewerage, irrigation and drainage— working expend'ture. pay-roll tax and superannuation—

2,650

metropolitan . . . . . . .

c o u n t r y ..................................................................... 17,796 19,857 24,610

H arbours and marine— working expenditure . . 2,394 2,629 5,760

Lands . . . . . . . . . 4,887 5,190 10,588

Mining . . . . . . . . . 9,414 9,966 12,833

F o r e s t r y ............................................................................... 7,784 8,382 9.630

A g r i c u l t u r e ........................................................... 11,634 13,159 16,974

Superannuation, n.e.i. . . . . . . 12,563 15,264 17,301

Pay-roll tax, n.e.i.................................................................. 9.746 12,894 18,308

Other expenditure . . . . . . . 35,863 39,909 60,973

Total e x p e n d itu re .................................................. 948,100 1,100,054 1,314,487

Budget r e s u l t ............................................................ 6,711 15,797 2,583

Deficit Deficit Deficit

* Some Australian Government payments are included in Other revenue’ items or offset against expenditure items.

163

F.19 On the expenditure side, social services expenditure increased by $117.9m (18.1 per cent) in 1973-74, compared with an increase of $109.lm (20.2 per cent) in 1972-73. Social services expenditure accounted for 55 per cent of the increase in total expenditure in 1973-74. The increase was divided between education $50.1m, health and welfare $50.3m and law and order $17.5m. Lands expenditure increased by $5.4m (104 per cent) in 1973-74, compared with an increase of $303,000 (6.2 per cent) in 1972-73. This occurred mainly because expenditure on vermin and noxious weeds ($4.4m in 1973-74) was included in the Department of Lands appropriation instead of being met mostly from Works and Services Account as in previous years. In 1973-74 expenditure on pay-roll tax, n.e.i. increased by $5.4m (42 per cent), compared with an increase of $3.1m

(32.3 per cent) in 1972-73. This resulted mainly from an increase in the rate of tax from 3.5 to 4.5 per cent from 1 September 1973. Harbours and marine working expenditure increased by $3.1m (119.1 per cent) in 1973-74, compared with an increase of $235,000 (9.8 per cent) in 1972-73. The increase in 1973-74 resulted mainly from the inclusion in the revenue account of expenditure amounting to

$1 .6 m for dredging and blasting purposes, which had previously been met from the Works and Services Account, and from higher costs for administration, maintenance and repairs.

Q u e e n s l a n d

F.20 In 1973-74 the budget result was a deficit of $1.5m, compared with surpluses of $1.2m and $2.7m in 1972-73 and 1971-72 respectively. The overall revenue increase was $130.2m (19.5 per cent) in 1973-74, compared with an increase of $100.3m (17.6 per cent) in 1972-73. Total expenditure increased by $133m (19.9 per cent) in 1973-74, compared with an increase of $101.8 m (18 per cent) in 1972-73.

F.21 Australian Government payments increased by $52.1m (18 per cent) in 1973-74, compared with an increase of $34.3m (13.5 per cent) in 1972-73. These payments included advance special grants each year.

F.22 State taxation increased by $49.7m (29.7 per cent) in 1973-74, compared with an increase of $44.9m (36.6 per cent) in 1972-73. In 1973-74 pay-roll tax collections increased by $32.8m (53.8 per cent) compared with 1972-73. The rate of tax was increased from 3.5 to 4.5 per cent from 1 September 1973. Stamp duty revenue rose by $ 10.4m in 1973-74, the main increases being in conveyances and mortgages. Other substantial increases in taxation revenue occurred in totalisator, betting and bookmakers’ turnover tax ($1.9m), succession and probate duty

($1.6m), liquor taxation ($1.2m) and State transport licences and permits ($1.3m).

F.23 Mining revenue increased by $884,000 (16 per cent) in 1973-74, in contrast to a decrease of $412,000 (6.9 per cent) in 1972-73. This was mainly due to higher royalty payments from Mt. Isa Mines Ltd. In 1973-74 land revenue decreased by $295,000 (2.1 per cent), in contrast to an increase of $3.2m (29.9 per cent) in 1972-73. A decrease in receipts from pastoral occupation and grazing selection leases and sales was partly offset by an increase in perpetual lease and freeholding tenures and special lease revenue.

F.24 In 1973-74 the railway operating loss was $38.6m, compared with $15.2m in 1972-73. In 1973-74 there was an increase in revenue of $ 12.2m, due mainly to increases in the carriage of coal, fertilisers, other minerals and general merchan­ dise. This was partly offset by a decline in livestock traffic and carriage of grains

164

T a b le F -3 — BUDGET SUMMARIES — QUEENSLAND

Detail 1971-72 1972-73 1973-74

Revenue $ '0 0 0 $ ’0 0 0 $ ’0 0 0

A ustralian G overnm ent payments— Financial assistance grants . . . . . 231,603 271,946 318,245

Special revenue assistance . . . . . 8,606 4,228

Advance on special grant . . . . . 9,000 1 0 ,0 0 0 1 0 ,0 0 0

Interest on State debts under Financial Agreement . 2,192 2,192 2,192

Debt charges assistan ce.................................................. 3,051 4,576 6 ,1 0 2

T o t a l * ..................................................................... 254,452 288,714 340,767

State taxation . . . . . . . . 122,701 167,585 217,319

D ebt charges r e c o v e r i e s .................................................. 18,017 19,898 23,263

Social services recoveries . . . . . . 9,229 11,501 14,038

Railways . . . . . . . . . 120,582 132,850 145,077

W ater supplies, sewerage, irrigation and drainage— m e tro p o lita n ..................................................................... . .

country . . . . . . . . . 2,808 2,944 3,370

H arbours and marine . . . . . . 2,496 2,907 3,365

Lands . . . . . . . . . 10,711 13,913 13,618

Minina . . . . . . . . . 5,929 5,517 6,401

Other revenue . . . . . . . . 2 2 ,1 0 0 23,471 32,325

Total revenue . . . . . . . 569,025 669,300 799,543

Expenditure

Debt charges . . . . . . . . 88,932 96,076 100,596

Social services . . . . . . . . 256,035 318,493 379,123

Railways— working expenditure (including demolished assets and interest and repayments— special funds), pay-roll tax and superannuation . . . . 130,934 148,002 183,689

W ater supplies, sewerage, irrigation and drainage— working expenditure and pay-roll tax— m etropolitan . . . . . . .

country . . . . . . . . 2,399 4,068 7,368

H arbours and marine— working expenditure and pay-roll tax . . . . . . . . . 2,841 3,420 4,509

Lands . . . . . . . . . 5,761 7,588 9,644

Mining . . . . . . . . . 2.951 4,731 5,946

Forestry . . . . . . . . . 2,876 3,295 4,034

Agriculture . . . . . . . 1 2 .2 0 2 15.329 16,744

Superannuation, n.e.i . . . . . . . 8,519 13,027 16,778

Pay-roll tax, n.e.i.................................................................. 5.193 6,754 9,895

Other expenditure . . . . . . . 47,667 47,311 62.726

Total expenditure . . . . . . 566.313 668,094 801,052

Budget result . . . . . . . 2,712

Surplus

1,206 Surplus

1,509 Deficit

* Some Australian Government payments are included in Other revenue* items or offset against expenditure items.

165

F.25 In 1973-74 social services recoveries increased by $2.5m (22.1 per cent) The main increases were: Registrar of Titles ($2.4m); sale of police property ($0.3m) and miscellaneous receipts from State institutions ($0.3m). These were partly offset by a decrease in recoveries of expenditure from the Insurance Com­ mission of $0.5m and a decrease in technical college fees ($0.2m) following the takeover of responsibility for technical education by the Australian Government from 1 January 1974. In 1972-73 the increase in social services recoveries had been $2.3m (24.6 per cent).

F.26 On the expenditure side, social services expenditure increased by $60.6m (19 per cent) in 1973-74, of which $23.9m was for education, $26.2m for health and welfare and $10.5m for law and order. In 1972-73 the increase in social services expenditure was $62.5m (24.4 per cent). Expenditure on pay-roll tax, n.e.i. increased by $3.1m (46.5 per cent) in 1973-74, compared with $1.6m (30.5 per cent) in 1972-73. The rate of tax was increased from 3.5 to 4.5 per cent from

1 September 1973.

as a result of unfavourable seasonal conditions and adverse markets. Operating expenditure increased by $35.7m in 1973-74, of which increases in rates of salaries and wages accounted for the major part.

So u t h A u s t r a l ia

F.27 South Australia’s published budget result for 1973-74 was a deficit of $3.4m, compared with deficits of $3.9m and Sl.lm in 1972-73 and 1971-72 respectively. The increase in total revenue in 1973-74 was $87.4m (17.8 per cent), compared with an increase of $59. lm (13.7 per cent) in 1972-73. Total expenditure for South Australia increased by $86.9m in 1973-74 (17.5 per cent), compared with an increase of $61.9m (14.3 per cent) in 1972-73.

F.28 In 1973-74 the increase in Australian Government payments was $29.1 m (14.5 per cent), compared with an increase of $25m (14.2 per cent) in 1972-73. Advance special grants were included in these payments.

F.29 State taxation increased by $36.8m (31.3 per cent) in 1973-74, com­ pared with an increase of $23.3m (24.9 per cent) in 1972-73. The main taxation items which recorded increases were pay-roll tax $19.3m, mainly due to an increase in the rate of tax from 3.5 to 4.5 per cent from 1 September 1973, stamp duties $ 11.4m and motor vehicle registration and drivers’ licence fees $1.6m. Stamp duty receipts increased as the result of a higher volume and value of taxable trans­ actions. Of the increase, $7.8 m was for conveyances, transfers, mortgages and other instruments; $1.3m was on new registrations and transfers of motor vehicles; and $992,000 related to credit, rental and instalment purchase business.

F.30 In 1973-74 railway revenue increased by $3.3m while operating expen­ diture (including pay-roll tax and superannuation) increased by $8 m, thus increasing the operating deficit ($14.2m in 1972-73) to $18.9m in 1973-74. The main reason for the large increase in revenue in 1973-74 was increased carriage of wheat and general merchandise. Revenue from combined metropolitan and country water supplies, sewerage, irrigation and drainage undertakings increased by $4.6 m in 1973-74, compared with an increase of $5m in 1972-73. The large increase in revenue was due to higher charges for water, general growth of the undertakings and a revision of property values. Despite higher expenditure, the operating surplus of the undertakings increased from $21.2m in 1972-73 to $22.4m in 1973-74; this

166

T a b le F -4 — BUDGET SUMMARIES — SOUTH AUSTRALIA

Detail 1971-72 1972-73 1973-74

Revenue $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

A ustralian G overnm ent payments— Financial assistance g r a n t s ........................................ 158,490 181,430 204,918

Special revenue a s s i s t a n c e ........................................ 5,929 2,765

Advance on special g r a n t ........................................ 7,000 13,500 15,000

Interest on State debts under Financial Agreem ent . 1,408 1,408 1,290

D ebt charges assistan ce.................................................. 2,991 4,486 5,982

T o t a l * ..................................................................... 175,818 200,824 229,955

State t a x a t i o n ...................................................................... 94,429 117,724 154,521

D ebt charges r e c o v e r i e s .................................................. 39,331 43,833 47,719

Social services re c o v e rie s.................................................. 21,268 23,301 25,995

Railways . . . . . . . . . 35,743 35,410 38,688

W ater supplies, sewerage, irrigation and drainage— m e tro p o lita n ..................................................................... 27,824 31,591 35,278

c o u n tr y ................................................................................ 9,648 10,852 11,747

H arbours and m a r i n e .................................................. 8,081 7,593 10,303

L a n d s ................................................................................ 1,672 1,676 1,670

M i n i n g ................................................................................ 2,278 2,255 2,464

F o r e s t r y ................................................................................ 1,740 1,800 1,920

O ther revenue . . . . . . . . 14,378 14,442 18,454

T otal re v e n u e ............................................................ 432,210 491,301 578,714

Expenditure

D ebt c h a r g e s ...................................................................... 85,570 92,892 99,097

Social s e r v ic e s ...................................................................... 202,946 239,666 294,697

Railways— working expenditure, pay-roll tax and s u p e r a n n u a t i o n ............................................................ 45,051 49,572 57,588

M etropolitan transport undertaking— contribution . 630 1,330 2,250

W ater supplies, sewerage, irrigation and drainage— metropolitan— working expenditure, pay-roll tax and super-annuation . . . . . . . 10,539 12,495 14,760

debt charges paid 13,438 14,495 15,561

country— working expenditure, pay-roll tax and super-a n n u a t i o n ........................................................... 7,537 8,700 9,833

debt charges paid 2 ,1 1 1 2,152 1,914

H arbours and marine— working expenditure, pay-roll tax and superannu-ation . . . . . . . . . 4,731 4,809 5,846

debt charges paid . . . . . . . 3,350 2,784 4,347

Highways . . . . . . . . . 19,554 20,778 22,367

Lands . . . . . . . . . 3,161 3,395 4,040

Mining . . . . . . . . . 2,491 2,885 3.653

A g r i c u l t u r e ..................................................................... 5,514 6,099 7,247

Superannuation, n.e.i............................................................ 3,619 4,248 4,933

Pay-roll tax, n.e.i.................................................................. 764

Other expenditure . . . . . . . 22,270 28.9i2 33,982

T otal expenditure . . . . . . 433,276 495,212 582,115

Budget r e s u l t ............................................................ 1,066 3,911 3,401

Deficit Deficit Deficit

* Some Australian Government payments are included in Other revenue’ items or offset against expenditure items. 167

compares with an operating surplus of $19.4m in 1971-72. Harbours and marine revenue increased by $2.7m (35.7 per cent), compared with a decrease of $488,000 ( 6 per cent) in 1972-73, mainly due to an increase in harbour charges operative

for almost the full year and an increase in the tonnage of cargo handled. Operating expenditure (including pay-roll tax and superannuation) increased by $lm, giving an operating surplus of $4.5m for 1973-74, compared with an operating surplus of $2.8 m for 1972-73 and $3.4m for 1971-72.

F.31 In 1973-74 social services recoveries increased by $2.7m (11.6 per cent). The principal increases were: hospital fees ($2.1m, due to increases in hospital charges to inpatients and the daily average bed occupancy); fees payable to the Registrar-General of Deeds ($0.4m); and community welfare recoveries ($0.3m).

There was a decrease in the transfer from the Hospitals Fund to the Hospitals Department of $0.6m.

F.32 On the expenditure side, social services expenditure increased by $55m (23 per cent) in 1973-74; of this increase, education accounted for $22.7m, health and welfare for $25.2m and law and order for $7.1m. In 1972-73 social services expenditure increased by $36.7m (18.1 per cent). Pay-roll tax, n.e.i. ($764,000 in

1971-72) covered the period July-August 1971 only, because payment of the tax on the salaries and wages of State government employees ceased on 1 September 1971 following the transfer of the tax to the States. South Australia, unlike all other States except Tasmania, exempted government departments from payment of the tax.

W e s t e r n A u s t r a l ia

F.33 Western Australia’s 1973-74 budget result was a deficit of $5.7m, com­ pared with deficits of $3.5m and $891,000 in 1972-73 and 1971-72 respectively. The overall increase in revenue was $8 8 .3m (19 per cent) in 1973-74, compared with an increase of $49.2m (11.8 per cent) in 1972-73. Total expenditure rose by $90.6m (19.3 per cent) in 1973-74, compared with an increase of $51.8m (12.4 per cent) in 1972-73.

F.34 Australian Government payments increased by $30m (14.9 per cent) in 1973-74, compared with an increase of $20.5m (11.4 per cent) in 1972-73. Included in the financial assistance grants for each of the years 1973-74 and 1972-73 were amounts of $6.5m in lieu of a special grant and $3.5m as a special temporary- addition. In 1971-72 an amount of $9.5m had been included in the financial

assistance grants as a payment in lieu of a special grant.

F.35 State taxation receipts increased by $29.8m (30.7 per cent) in 1973-74, compared with an increase of $18.7m (23.8 per cent) in 1972-73. In 1973-74 collections from pay-roll tax increased by $19.6m, reflecting the increase in rate of tax from 3.5 to 4.5 per cent from 1 September 1973. Revenue from stamp duty increased by $5.3m, mainly due to a substantial rise in the number of conveyances and transfers of property. Other duties which showed major rises as a result of increased transactions were those on credit facilities and insurance policies. Probate duty collections increased by $2.7m in 1973-74, mainly due to settlement of several large estates and general increases in property valuations, while land tax collections declined by $445,000. Mining revenue increased by $5.3m (16.2 per cent) in 1973-74, compared with an increase of $1.9m (6.1 per cent) in 1972-73. An increase of $5.9m in iron ore royalty payments was partly offset by reductions in revenue from leases and other rentals ($436,000) and

168

T a b le F -5 — BUDGET SUMMARIES — WESTERN AUSTRALIA

Detail 1971-72 1972-73 1973-74

Revenue

A ustralian G overnm ent payments—-$ ’0 0 0 $*000 $ ’0 0 0

Financial assistance grants . . . . . 170,960 196,369 222,388

Special revenue a s s i s t a n c e ........................................ 6,014 2,855

Interest on State debts under Financial Agreement . 947 947 947

Debt charges assistance . . . . . . 2 ,2 1 1 3,317 4,422

T o t a l * ...................................................................... 180,132 200,633 230,612

State t a x a t i o n ...................................................................... 78,490 97,141 126,929

Debt charges recoveries . . . . . . 18,775 24,441 24,498

Social services recoveries . . . . . . 8,451 10,273 11,336

Railways . . . . . . . . .

Water supplies, sewerage, irrigation and drainage— 65,682 60,336 74,983

m etropolitan . . . . . . . . . .

country . . . . . . . . . 7,209 8,371 9,816

H arbours and m arine . . . . . . 3,022 3,420 3,592

Lands . . . . . . . . . 2,447 2 ,6 6 8 2,859

Mining . . . . . . . . . 30,853 32,731 38,024

F o r e s t r y ................................................................................ 5,033 5.040 6 ,0 0 1

Agriculture . . . . . . . . 1,518 1,710 3,116

Other revenue . . . . . . . . 14,822 18,851 22,183

T otal revenue . . . . . . .

Expenditure

416,434 465,615 553,949

Debt charges . . . . . . . . 62,846 66,147 70,134

Social services . . . . . . . .

Railways— working expenditure, pay-roll tax and 198,283 232,469 284,558

superannuation . . . . . . . 68,150 71,214 84,901

Road transport undertakings— subsidy . . .

Water supplies, sewerage, irrigation and drainage— working expenditure and pay-roll tax—

2,890 4,623 5,752

metropolitan . . . . . .

c o u n t r y .....................................................................

H arbours and m arine— working expenditure and pay-13,674 16,444 18,682

roll t a x ............................................................................... 4,172 3,658 3,916

Coastal Shipping Commission— loss . . . . 3,937 4,629 4,582

Lands . . . . . . . . . 4,434 4,495 5,271

Mining . . . . . . . . . 5,528 6,238 6,831

Forestry . . . . . . . . . 4,792 4,758 5,759

Agriculture . . . . . . . 8,783 9,622 12.291

Superannuation, n . e . i . .................................................. 4,046 4,539 5,341

Pay-roll tax, n.e.i.................................................................. 4,060 4,862 7,292

Other e x p e n d i t u r e ........................................................... 31,730 35,407 44,370

Total expenditure . . . . . . 417,325 469,105 559,680

Budget r e s u l t ............................................................ 891

Deficit

3,490 Deficit

5,731 Deficit

* Some Australian Government payments are included in Other revenue’ items or offset against expenditure items.

169

lower survey fee collections ($227,000). In 1973-74 revenue from agriculture increased by $1.4m (82.2 per cent), compared with an increase of $192,000 (12.6 per cent) in 1972-73.

F.36 In 1973-74 there was a railway operating loss of $9.9m, compared with a loss of $10.9m in 1972-73. Revenue increased by $14.6m, mainly due to heavier freight traffic in practically all classes of commodities, especially in fertilisers, grain products, and oil in tank wagons. Operating expenditure (including pay-roll tax and superannuation) also increased substantially over 1972-73.

F.37 Social services recoveries increased by $l.lm (10.3 per cent) in 1973-74, due mainly to increases in revenue from the Land Titles Office ($0.4m) and from the Crown Law Department ($0.2m). Social services recoveries had increased by $1.8m (21.6 per cent) in 1972-73.

F.38 On the expenditure side, social services expenditure increased by $52.lm (22.4 per cent) in 1973-74, compared with an increase of $34.2m (17.2 per cent) in 1972-73. Expenditure on education increased by $ 18.5m, health and welfare by $29.lm, and law and order by $4.5m. In 1973-74 expenditure on pay-roll tax, n.e.i. increased by $2.4m (50 per cent), compared with an increase of $802,000

(19.8 per cent) in 1972-73. The large increase in 1973-74 resulted mainly from an increase in the rate of tax from 3.5 to 4.5 per cent from 1 September 1973. In 1973-74 expenditure on agriculture increased by $2.7m (27.7 per cent), com­ pared with an increase of $839,000 (9.6 per cent) in 1972-73, mainly due to higher salaries and administration expenses.

T a s m a n ia

F.39 Tasmania’s published budget result in 1973-74 was a deficit of $3.2m, compared with deficits of $4.1m and $2.5m in 1972-73 and 1971-72 respectively. Total revenue increased by $29.5m (16.7 per cent) in 1973-74, compared with an increase of $18.4m (11.6 per cent) in 1972-73. Total expenditure rose by $28.5m

(15.7 per cent) in 1973-74, compared with an increase of $20.lm (12.5 per cent) in 1972-73.

F.40 Australian Government payments increased by $13.7m (14.9 per cent) in 1973-74, compared with an increase of $7.6 m (9 per cent) in 1972-73. Advance special grants were included in these payments.

F.41 State taxation increased by $10.2m (28.8 per cent) in 1973-74, following an increase of $6 .9m (24.2 per cent) in 1972-73. Pay-roll tax receipts rose by $5.8 m (49.1 per cent) in 1973-74, mainly due to the increase in the tax rate from 3.5 to 4.5 per cent from 1 September 1973. Stamp duty revenue increased by $1.5m (21.6 per cent), reflecting a higher volume of dutiable documents. Receipts from the casino tax and licence fees increased by $l.lm in the first full year of operation. Following a Fligh Court decision and new financial arrangements between the Australian and Tasmanian Governments, taxes and licence fees imposed on tobacco under the provisions of the Tobacco Act 1972 ceased from 31 March 1974 (in the case of tobacco consumption) and 30 June 1974 (in the case of licence fees). Revenue amounted to $1.2m in 1973-74, an increase of

$688,000 over the 1972-73 collections. In 1973-74 Transport Commission revenue recorded in Table F -6 rose by $1.3m (18.5 per cent) compared with an increase of $221,000 (3.2 per cent) in 1972-73. The substantial rise was due mainly to a very large increase in the tonnage of general cargo carried by the East Coast Shipping

170

Table F-6 — B U D G E T SU M M A R IE S— T A S M A N IA

Detail 1971-72 1972-73 1973-74

Revenue

A ustralian G overnm ent payments—

$ '0 0 0 $ ’0 0 0 $ ’0 0 0

Financial assistance g r a n t s ........................................ 69,156 79,498 91,243

Special revenue assistance . . . . . 2,517 1,207

Advance on special grant . . . . . 1 1 ,0 0 0 1 0 ,0 0 0 1 0 ,0 0 0

Interest on State debts under Financial Agreement . 534 534 534

D ebt charges assistan ce.................................................. 1.590 2,385 3,180

Total* . . . . . . . . 84,797 92,417 106,164

State t a x a t i o n ...................................................................... 28,604 35,532 45,762

D ebt charges recoveries . . . . . . 24,787 26,931 29,232

Social services recoveries . . . . . . 3,735 4,501 4,376

T ransport Commission . . . . . . .

W ater supplies, sewerage, irrigation and drainage— 6,924 7,145 8,464

m e tro p o lita n ...................................................................... . .

country . . . . . . . . . 62 50 70

L a n d s ................................................................................ 415 715 617

Mining . . . . . . . . . 595 615 632

Forestry . . . . . . . . . 2,127 2,517 3,259

Other revenue . . . . . . . . 6,644 6,683 8,054

T otal revenue . . . . . . . 158,690 177,105 206,630

Expenditure

D ebt c h a r g e s ...................................................................... 43,526 46,196 49,367

Social services . . . . . . . .

Transport Commission— working expenditure, pay-72,944 86,462 101,646

roll tax and superannuation . . . . . 1 1 ,1 0 0 11,296 13,438

Road transport undertakings— subsidy . . . 1,146 1,527 2,355

Transfer of m otor taxation to Highways Fund . .

W ater supplies, sewerage, irrigation and drainage— subsidies to undertakings—

5,659 5,912 6,338

metropolitan . . . . . . . 143 187 258

country . . . . . . . . 841 984 1,041

H arbours and marine . . . . . . 57 108 1 1 0

Lands . . . . . . . . . 1,549 2,563 3,144

Mining . . . . . . . . . 929 1,071 1,229

Transfer to Forestry Fund . . . . . . 1,815 2,127 2,517

Agriculture . . . . . . . . 4,228 4,605 5,831

Superannuation, n . e . i . .................................................. 2,271 2,148 2,935

Pay-roll tax, n.e.i.................................................................. 220 102 97

Other expenditure . . . . . . . 14,717 15,950 19,474

Total expenditure . . . . . . 161,145 181,238 209,780

Budget result . . . . . . . 2,455 4.132 3,150

Deficit Deficit Deficit

* Some Australian Government payments are included in Other revenue’ items or offset against expenditure items.

171

Services ($761,000), and to increased railway freight revenue ($495,000), prin­ cipally from the carriage of woodchips.

F.42 In 1973-74 social services recoveries declined by $125,000 (2.8 per cent), contrasting with an increase of $766,000 (20.5 per cent) in 1972-73. There was an increase of $0.1 m in the recoupment of traffic fees by the Police Department.

F.43 On the expenditure side, social services expenditure increased by $ 15.2m (17.6 per cent) in 1973-74, compared with an increase of $ 13.5m (18.5 per cent) in 1972-73. Of the increase in 1973-74, education accounted for $7.6m, health and welfare for $4.9m and law and order for $2.7m. Following the transfer of pay-roll tax to the States from 1 September 1971, Tasmania exempted most salary and wages payments in government departments from the tax.

172

APPENDIX G

State Taxation, 1 9 7 3 -7 4 G.l Needs assessed for 1972-73 and 1973-74, to take account of the different relative taxable capacities as between the claimant and the standard States, are: 1972-73 1973-74

$’000 $’000

Queensland ................................... 36,197 45,936

South A u s t r a l i a .................................... 45,089 49,462

G.2 The needs as assessed for Queensland for 1973-74 are lower than those for 1972-73 in all fields of taxation other than probate and succession duties, poker machine taxation, pay-roll tax and other taxes and licences n.e.i. The largest reduction was in respect of lottery revenue, due mainly to a change in the method

of assessment (see paragraph 4.33). The largest increases were in the needs for probate and succession duties and pay-roll tax. The increase for probate and succession duties was due partly to a change in the Commission’s method of assess­ ment as a result of more comprehensive data furnished by Queensland. The

higher needs assessed for pay-roll tax resulted from an increase in the extent of the below-standard capacity of Queensland following rapid wage rises and a uniform increase in the rate of tax in all States.

G.3 For South Australia the assessed needs for 1973-74 are lower than those for 1972-73 in all fields of taxation except succession duty, poker machine taxation, third party insurance taxation, pay-roll tax, and other taxes and licences n.e.i. The largest reductions were in the fields of stamp duty, mainly in respect of real

estate transactions, and lottery revenue, the latter being mainly attributable to the change in the method of assessment referred to in paragraph 4.33. The largest increases were in the needs for succession duty and pay-roll tax; these resulted from increases in the extent of the below-standard capacity of South Australia. In

the case of pay-roll tax, this was due to rapid wage rises and a uniform increase in the rate of tax in all States.

G.4 Tables G-l to G-13 list the more important State taxes and set out their main features, such as the rates charged and subject matter taxed The detail is not exhaustive, but is shown in order to allow interstate comparison of the rates and conditions relating to those taxes which are of the greatest

significance for State taxation revenue.

G.5 The Commission does not directly assess needs in relation to fees imposed on the wide range of miscellaneous commercial and other activities of the States, but it implicitly assesses needs for these items by reference to differences in per capita revenue (see paragraph 5.3).

AMENDMENTS TO STATE TAXATION RATES AND CONDITIONS AFFECTING 1973-74 G .6 The principal amendments to State taxation rates and conditions which were introduced during 1973-74, or had their first full-year effect on revenue during

that year, are summarised below.

173

N ew South W ales

G.7 Motor Taxation. Co-ordination charges, which are charges levied on intra-state road motor transport engaged in the carriage of goods or passengers on journeys in competition with State-owned transport systems, were waived as from 1 July 1973 for the carriage of passengers and as from 1 January 1974 for the carriage of goods.

G .8 Probate Duty. During 1972-73 superannuation benefits payable on the death of a person prior to normal retirement were included in a deceased person’s estate. The legislation provided for a deduction from the dutiable estate of the first $70,000 of those benefits payable (under a bona fide superannuation scheme) to a widow, a widower, children under 2 1 years of age, wholly dependent adult

children, wholly dependent widowed mother and/or widower father. From 20 December 1973, where a person is domiciled in New South Wales at the time of his death, no death duty is payable in respect of property passing to the widow, widower, children under 2 1 , wholly dependent adult children or a wholly dependent widowed mother or widower father where the value of the estate does not exceed $50,000. This value was previously $30,000. The range for con­ cessional duty arrangements applying to property passing to a special class of beneficiary has been increased to apply to estates between $50,000 and $68,000.

The range of estate values was previously $30,000 to $40,000. In this new' range the estate levels have been increased, in estates where there is more than one person in the special category, by $4,000 for each such person in excess of one. The primary producer’s rebate of 30 per cent, applying to the duty on rural assets where the gross value of the primary producer’s estate does not exceed $150,000, has been

increased to 50 per cent. The rebates which apply to estates valued between $150,000 and $200,000 have also been increased and range from 41 2/3 per cent to 8 1/3 per cent. The range was previously 25 per cent to 5 per cent.

G.9 Land Taxation. From 1 November 1972, the special exemption on land used solely as the site of a single dwelling house by an owner-occupier who owns no other land was increased from $33,000 (reducing on a $3 for $1 basis to nil at $44,000) to $42,000 (reducing on the same basis to nil at $56,000). The 40 per cent rebate which applied to tax on land used for primary production and owned by exempt proprietary companies under the law of another State or a Territory of Australia was increased to 60 per cent as from 1 November 1972.

G.10 Amending legislation during 1973 changed the date on which land tax is assessed from 31 October to 31 December and the date of commencement of the land tax year from 1 November to 1 January effective from the 1974 tax year. ‘Residential’ land as defined has been fully exempted from land tax, irrespective of value or the extent of other land that may be owned by a taxpayer, provided the area of such land is not in excess of 2,100 square metres. Where the area of residential land exceeds 2 ,1 0 0 square metres, the pro rata value of the excess is added to the value of other lands that may be owned by the taxpayer for taxation purposes. Strata title home units used and occupied by at least one of the owners for residential purposes have also been granted full exemption. In the case of company title home units and home units owned on a joint tenancy basis, a

rebate of tax is allowed in respect of each unit used and occupied for residential purposes by the person entitled to the occupancy of the unit, by reason of his shareholding in the home unit company or his part-ownership of the land on which the unit stands. This rebate is effective from 31 December 1973. In cases

174

where not all of the land is used and occupied by the owner as a site of a single dwelling house the exemption levels have been increased. A total exemption now applies to land with a value up to $2 1 ,0 0 0 and a partial exemption applies up to $28,000. The statutory exemption applies to the taxable portion, the surplus over 2 ,1 0 0 square metres, of residential land and to all other land except that used for

primary production purposes. A new tax scale was introduced for the year com­ mencing on 1 January 1974 and levied on land held as at midnight on 31 December 1973. '

G .ll Liquor Taxation. Permits enabling liquor to be supplied in universities and colleges of advanced education became available from 8 May 1973.

G.12 Poker Machine Licence Taxation. The maintenance allowance of $120 per machine per annum, allowed as a deduction from the revenue otherwise subject to supplementary licence taxation, was increased to $150 per machine per annum with effect from the taxing period ended 30 November 1972. During

1973-74 the maintenance allowance for poker machines was increased from $150 to $175 per machine and the revenue exemption limit for supplementary licence tax purposes was increased from $20,000 to $30,000, with concessional rating applying in the income range of $30,000 to $40,000. These changes were

applied with effect in the taxing period ending 30 November 1973. The restrictions on the licensing of 2 0 cent machines were completely removed.

G.13 Pay-roll Taxation. The rate of tax increased in all States from 3.5 per cent to 4.5 per cent on all taxable wages paid or payable on and after 1 September 1973.

V ic to r ia

G.14 Probate Duty. From 10 December 1973, the exemption for the matri­ monial home was changed to an amount equal to the value of the beneficial interest of the deceased in the matrimonial home or $30,000 of that amount whichever is the lesser. The limit was previously $15,000. The exemption on

estates of members or ex-members of the British or allied defence forces killed on active service or dying as a result of injuries received or disease contracted on active service in specified wars was raised from $15,000 to $30,000. The minimum

dutiable amount payable on estates passing to the widow, widower, children under 2 1 , wholly dependent children over 21 or to a wholly dependent widowed mother

was lifted to $24,000 and tapered relief was provided to $48,000.

G.15 Stamp Duties. Various increases in the rates of duty took effect from I December 1973. Duty payable on cheques, bills of exchange and promissory notes was increased from 6 cents to 7 cents. On conveyances or transfers of real property, deeds of settlement or gifts, the ad valorem rates were increased for con­ siderations or values of over $40,000. Duty on insurance premiums was increased from $12 to $14 for every $200 or part $200 of the premiums received. The duty

on life insurance was increased on sums assured of over $200. On sums assured of $ 2 0 0 to $2 ,0 0 0 the duty was increased, for each $ 2 0 0 or part $2 0 0 , from 1 0

cents to 12 cents. On sums assured of over $2,000, the former rate was $1 and for every $200 or part in excess of $2,000, 20 cents. This duty was increased to $1.20 and for every $200 or part in excess of $2,000, 24 cents. Duty on instalment pur­ chase agreements based on the purchase price of $ 2 0 or more was increased from

1.8 per cent to 2.1 per cent. The rate of duty payable on the application for registration and notices of acquisition in respect of motor cars and trailers for

175

each $200 or part $200 was increased from $3 to $4. The duty on the amount secured on mortgages, debentures, bonds or covenants where the amount is between $8,000 and $10,000 was increased. Where the amount secured exceeded $8,000 but did not exceed $10,000, the duty was formerly $4 for the first $8,000 and 60 cents for every additional $200 or part $200 in excess of $8,000. The duty of 60 cents was increased to 70 cents. Where the amount secured exceeded $10,000 the duty was formerly $10 for the first $10,000 and 70 cents for every additional $200 or part $200 in excess of $10,000. The duty of 70 cents was increased to 80 cents. Duty on various agreements, instruments and deeds, not otherwise chargeable with duty, was increased from $3 to $5. Duty on loans, discount transactions and any amount debited under a credit arrangement was increased from 1 .8 per cent to 2.1 per cent and from 9 October 1973 the ‘prescribed rate’ above which credit business was subject to duty was increased from 10 per cent to 1 2 per cent.

G.16 Land Taxation. An amendment to the Land Tax Act 1973, which came into operation on 28 December 1973, exempts from tax land which is vested in public statutory bodies, municipalities, trade unions and friendly societies or vested in persons and bodies who use the land exclusively for charitable purposes. However, the land is taxable if it is used or occupied for business or banking purposes. The general exemption for land tax remains at $9,000 except for land of an area less than half an hectare which is the only land owned by a person who uses it exclusively as his residence. In this case, the exemption is $15,000

and diminishes on a sliding scale so that there is no exemption when the un­ improved capital value reaches $22,500. A new tax scale for the 1974 tax year has increased the rate for lands with a taxable value in excess of $180,000 by extending the progressive scale of land tax beyond that level to $1,0 0 0 ,0 0 0 . The Decentralized Industry Incentives (Pay-roll Tax Rebates) A ct 1972

(subsequently renamed the Decentralized Industry Incentive Payments Act 1972) was proclaimed to operate from 1 July 1973. Under the legislation, approved decentralised secondary industries became eligible to apply to the Minister for State Development and Decentralization for rebates of land tax and pay-roll tax paid in the previous year in respect of their decentralised establishments.

G.17 Entertainments Taxation. This tax was abolished in Victoria with effect from 1 December 1973.

G.18 Racing Taxation. From 31 December 1973, the commission on off- course daily doubles was increased from 15 per cent to 17 per cent and provision was made for a deduction of 19 per cent in the case of special scheme totalisators (quadrella). A later amendment, assented to on 14 May 1974, reduced the Government’s share of the commission from off-course investments by £ per cent and allowed for this \ per cent to be retained by the Totalizator Agency Board in the Development Reserve Fund. This amendment also provided for the intro­ duction of trifecta and trio totalisators.

G.19 Pay-roll Taxation. As noted in paragraph G.13, the rate of tax was increased to 4} per cent effective from 1 September 1973. As noted in paragraph G.16, approved decentralised secondary industries became eligible to apply for rebates, under the terms of the Decentralized Industry Incentive Payments Act

1972, in respect of pay-roll tax and land tax. The specified employers may apply before 30 November in each year for a rebate in respect of pay-roll tax relating to a decentralised establishment for the preceding year.

176

Q u e e n s l a n d

G.20 Succession and Probate Duty. During 1972-73, the succession and pro­ bate exemptions in respect of superannuation benefits were increased from $2,500 to $3,500 per annum in the case of the surviving spouse and by 33 1/3 per cent in respect of other dependants. The basic exemption on an estate passing to the wife, husband or a child under the age of 2 1 years of the predecessor, if the predecessor was domiciled in Australia, was increased from $15,000 to $20,000. Where the value of successions passing to these beneficiaries exceeds $20,000,

rebates in respect of successions operate on a sliding scale up to an estate value of $100,000 in lieu of the previous figure of $19,000. The following changes affecting succession and probate duty became effective on 19 December 1973. Probate (or administration) duty, which had previously been at a fixed rate of one per cent

and had been levied in addition to succession duty, was abolished. The exemption where the estate passes to other than spouse or lineal issue was increased from $1,000 to $3,000. The exemption, where the successor is the wife, husband or child (children) under 21 years, was raised from $20,000 to $50,000. Rebate

provisions apply where the value exceeds $50,000 but are phased out when the estate reaches a value of $100,000. In the case of lineal issue over 21 years where there is a surviving spouse, the exemption was raised from $3,000 to $6,000 to equal the exemption entitlement where there is no surviving spouse.

G.21 There are new provisions applying to estates where marketable securities quoted on a Stock Exchange have been sold within 12 months of date of death and have resulted in a loss of more than 1 0 per cent of the total value of the estate. In these cases, the value of the estate for succession duty purposes is to

be reduced to take account of the loss on sale of marketable securities in excess of 1 0 per cent of the total value of the estate.

G.22 The onus is no longer on the surviving partner to prove his/her contribution to a joint banking account. Joint ownership of a bank account is accepted as evidence that the surviving party owned one-half of the balance in the account. The right to deferment of payment of duty on the matrimonial home valued at less than $2 0 ,0 0 0 until the spouse dies, remarries or sells the dwelling

has been abolished. However, provision has been made for the payment of such duty without interest over a period of up to 1 0 years in cases of undue hardship. In these cases, there is no limit to the value of the dwelling and no limitation regarding the beneficiary’s relationship to the deceased. The legislation has been

brought into line with the estate duty of the Australian Government and of all States except South Australia in the adoption of the period of 3 years before the date of death in lieu of 2 years, in which gifts will be included for duty purposes.

G.23 Stamp Duties. During 1973-74 the ‘prescribed rate’ of interest above which credit and rental business transactions were subject to duty was increased from 10 per cent to 14 per cent. The exemption from stamp duty on mortgages on the matrimonial home was increased from $10,000 to $15,000, irrespective of the

amount borrowed or the value of the home. The stamp duty on every policy of insurance or renewal relating to any motor cycle is now a flat rate of 45 cents which is the same as the rate for motor vehicles.

G.24 Land Taxation. During the financial year 1973-74, the taxable value of land involving liability for returns was increased from $12,000 to $17,000 for residents. The statutory exemption allowed to resident owners was increased from $ 1 0 ,0 0 0 to $15,000 and the special exemption allowed to resident owners

177

who personally use their land for agriculture, dairying or grazing purposes was increased from $30,000 to $45,000.

G.25 Liquor Taxation. Substantial changes in liquor licensing arrangements were introduced under the Liquor Act Amendment Act 1973. Under this legisla­ tion the Licensing Court of Queensland was constituted. The Licensing Court, which is a Court of record and is constituted by a Judge of District Courts, is responsible for hearing and determining all applications and other matters which, by the Liquor Act, are required or permitted to be heard and determined by the Licensing Court. The Act reduces the legal age for drinking from 21 years to

18 years, in consequence of which licensed clubs will be able to reduce the age qualification for membership. The maximum trading hours have been extended and new types of licences have been introduced including bistro licences, theatre licences and vignerons’ licences.

G.26 Pay-roll Taxation. As noted in paragraph G.13, the rate of tax was increased to 4 \ per cent effective from 1 September 1973.

So u t h A u s t r a l ia

G.27 Motor Taxation. During 1973-74, registration transfer fees were in­ creased from $1 to $4 and interstate hauliers’ registration fees were increased from $2 to $5.

G.28 Land Taxation. From 1 July 1973, a remission of land tax as well as water, sewerage and council rates became applicable to certain eligible tax­ payers. The remission of land tax for any financial year is three-fifths of the land tax to which the taxpayer would, apart from the remission, be liable or eighty

dollars, whichever is the lesser. Those eligible are pensioners and people who are able, at the time for payment of the rates or tax, to demonstrate exceptional circumstances of hardship. The property must be owned and occupied by the owner or joint owner as a principal place of residence. Where a property is jointly owned a proportionate remission may apply.

G.29 Statutory Corporation Payments. During 1973-74, the levy on the sale of electricity was raised from 3 per cent to 5 per cent. The new rate operated for three-quarters of the year.

G.30 Pay-roll Taxation. As noted in paragraph G.13, the rate of tax was increased to 4 \ per cent effective from 1 September 1973.

W e s t e r n A u s t r a l ia

G.31 Pay-roll Taxation. As noted in paragraph G.13, the rate of tax was increased to 4 \ per cent effective from 1 September 1973.

T a s m a n ia

G.32 Motor Taxation. During 1972-73, a rebate of 40 per cent of motor tax was allowed in respect of a lorry owned by a pensioner where the lorry was not used for the purpose of any trade or business. The maximum allowable refund on cancellation of registration of a motor vehicle was increased from 9/12ths to

ll/12ths of the tax paid. From 1 January 1973, motor vehicle and trailer regis­ tration and renewal of registration fees were increased by $2. The increase, how-178

ever, did not apply to the registration or renewal of registration of vehicles owned by pensioners.

G.33 Casino Taxation. Casino tax, which has no counterpart in the other States, was introduced in February 1973. It is calculated according to a graduated scale based upon monthly gross profit, with rates varying from 5 per cent where the profit is less than $25,000 for the month, up to a maximum of 30 per cent where

it exceeds $125,000. In addition there is a licence fee of $2,500 per month.

G.34 Tobacco Taxation. The tax, which also had no counterpart in the other States, was introduced in February 1973. The tax had two components, a con­ sumption tax and a licensing tax. The consumption tax was a tax imposed on the consumption of any tobacco at 1 \ per cent of the retail value of that tobacco.

The licensing tax was imposed on tobacco retailers and was based on average monthly tobacco stocks in the year ending six months before the beginning of the licensing period. The legislation imposing the tax was challenged in the High Court. The Court held that the tax was valid but it declared invalid the regulations

which prescribed the methods to be used in collecting the consumption tax. Tasmania redrafted its regulations in an attempt to meet the Court’s objections, but before the new regulations could be tested the tobacco tax legislation was suspended by Tasmania following revised financial arrangements with the Aus­

tralian Government. Under these arrangements the financial assistance grant pay­ able to Tasmania in 1974-75 was increased by $15 million and Tasmania withdrew from claimancy (see paragraph 2.53). The collection of the consumption tax was suspended from 1 May 1974 and the licence fees were suspended from 1 July 1974.

For details of the consumption tax and licensing tax rates, see Table G-12.

G.35 Pay-roll Taxation. As noted in paragraph G.13 the rate of tax was in­ creased to 4j- per cent effective from 1 September 1973.

179

Table G-l — MOTOR TAXATION AS AT 30 JUNE 1974 In addition to the taxes and charges shown, there are permit and licence fees imposed for the carrying of passengers and freight.

$7 for up to 10 units, $12.90 for over 10 units to 25 units

plus $3.50 per 6

units (or part) to 75 units then $4.70 for each additional 5 units (or part)

$7.20 for up to 10

units, $14.40 for

over 10 units to 25 units plus $4.80 per 5 units (or part) to

75 units then $7.20 for each additional 5 units (or p a r t) ( /)

0.278c per ton mile

on vehicles of over 8 tons capacity

Western Australia

A t 1 cwt— $2 rising to $39 for 31 cwt

plus $1 for each

additional cwt (or part)

At 5 cwt— $8 rising to $266 at 7 tons

plus $10 for each

additional 5 cwt (or part)

$7 $3

0.278c per to n mile on vehicles of over 8 tons capacity

$5(0)

52c per unit

Less than 2 tons—

59c per unit, 2 tons but less than 3 tons —87c per unit, 3

tons and over—

$ 1.02 per unit(fc)

$6 $5

(a) Payable on initial registration only. Does not apply to renewals or to vehicles used exclusively for the conveyance of disabled or handicapped persons. (b) Certain concessions apply to vehicles owned by pensioners. (c) The unit of tax in all States except New South Wales and W estern A ustralia is the weight in cwts plus the horse-power of the vehicle. In New South Wales and W estern Australia the unit is the tare weight of the vehicle expressed in £ cwt and 1 cwt respectively.

(d) M otor cars and certain other vehicles such as utilities and vans may be registered for private or commercial use. In m ost cases such vehicles used for commercial purposes are taxed at a higher rate. (e) As for footnote (c) except that in Tasmania the unit of tax is the weight in £ cwt plus the horse-power of the vehicle. ( / ) For commercial vehicles with a tare weight over 1,780 kg the rates are: $31.20 for 36 to 40 units plus $5.20 per 5 units (or part) to 75 units then $7.80 for each additional 5 units (or part),

(g) A fee of $4 is payable for the issue of a licence to a person not owning a vehicle.

T a b le G - 3 — STAMP DUTIES AS AT 30 JUNE 1974 — c o n tin u e d

South Australia

1% o f net premiums o f the previous year

$5 for each $100 (or part) o f net

premiums

$2 per policy (Levied under Stamp D uties Act)

U p to $10,000—25c per $100 (or part) Over $10,000— $25 plus 35c per $100

(or part) over

$10,000

W hen $20 or more— 1.8 %

Western Australia

Nil

W orkers Com pensa­ tio n 3 % of

premiums, all other 5% ______________

$2 per policy (Levied under M otor Vehicle Act)

$20 to $200—5c per $40 (or part) Over $200—25c per $200 (or part)

W hen $20 or more— 1.5%

Tasmania

Sums assured up to

$2,000— 10c per $200 (or part) Over $2,000—First $2,000 as above,

rem ainder 20c per $200

6% o f premiums

$2 per policy (Levied under Stamp D uties A ct)

F irst $200 (or part)

o f sum secured— 25c, additional

am ounts 25c per

$100 (or part)

W hen $100 o r m ore— 1.5%

(a) For tractors owned by primary producers and commercial m otor vehicles the duty over $1,000 is $10 plus $2 per $100 (or p art) over $1,000. lb) For Victoria these rates apply only to conveyances of real estate. M ost other dutiable documents are taxed at the rate o f $5 each. (c) Stamp duty is payable on these items when a transfer document is required. In Victoria, Queensland and South Australia gifts m ade with or w ithout an instrum ent o f transfer may be liable to a gift duty similar to that imposed by the Australian Government.

(d) A few types of insurance policies are excluded from this category. They include reinsurance and third party m otor vehicle liability, on which some States impose a small flat rate duty.

Table G-4 — LAND TAXATION AS AT 30 JUNE 1974

(The tax is levied by each State on the basis of the unimproved capital value of land alienated from the Crown. In South Australia tax is also payable on land leased from the Crown.)

New South Wales Victoria Queensland South Australia

U rban Land— General exemption . . . . . $21,000; reducing by

$3 for every $1 by which the value

exceeds $21,000

$9,000; reducing by $2 for every $1 by which the value

exceeds $9,000(6)

$15,000(d) Land valued at $1,000

or less

Rates . . . . . . .

able values up to

$5,000 rising to

$1,747.50 tax plus 2.4c for each $1 of value exceeding $130,000

0.42c per $1 on tax­ able values up to

$17,500 rising to $33,452 tax plus

0 .04c for each $ 1 of value exceeding $lm (c)

0 . 3c per $ 1 on taxable values below $4,000 rising to 2. lc per $ 1 for values of

$400,000 or more

0.2c per $1 on values up to $10,000 rising to $3,420 tax plus 3.8c for each $1 of

value exceeding $180,000(e)

Rural land— General exemption . . . . . Land used for primary

production and

owned by indivi­ duals, partners,

certain proprietary and trustee com­

panies—full exemp­ tion Other land— $45,000; reducing by $3 for

every $1 by which the value exceeds $45,000

Land used for primary production is fully exempt. Other rural land as for urban

$45,000(

$4 for every $6 by which the value

exceeds $5,000

Rates . . . . . . . Other rural land as for

urban land

As for urban land As for urban land As for urban l a n d ( /)

Western Australia Tasmania

O n improved land

only, $10,000; re­ ducing by $1 for

every $4 by which the value exceeds

Land valued at less than $1,000

$10,000 On improved la n d : 0 .3 c per $1 on

values up to $5,000 rising to $1,555 tax plus 2.4c per $1 of value exceeding

0 . 2c per $ 1 on taxable values up to $1,000 rising to $2,825 tax plus 3c for each $1

of value exceeding $150,000

$120,000 ( e ) On unimproved la n d : See footnotes (g)(h)

Land used principally for prim ary pro­

duction purposes fully exempt

$20,199; reducing by $4 for every $1 by which the value

exceeds $20,000

As for improved

urban land

As for urban land

but less 25 per cent o f tax assessed

(a) Residential land is fully exempted from land tax irrespective of the value or the extent of other land owned, provided the area of such land is not in excess of 2,100 square metres. ψ ) For land of area less than half an hectare, being the only land owned by a person who uses it exclusively as his residence, the exemption is $15,000 diminishing on a sliding scale to $22,500. (c) A n addition of 20 per cent is made to tax assessable on land owned by absentees unless used for industrial purposes. ' ~

(

Table G-5 — ENTERTAINMENTS TAXATION AS AT 30 JUNE 1974 (Victoria and Tasmania only)

Victoria (Horse Racing and Trotting) Tasmania (Cinematograph Films)

This tax was abolished with effect from 1 D ecem ber 1973

W here admission is not less than 55 cents, but is less than 60 cents, rate of tax is am ount

paid for admission which exceeds 54 cents.

W here admission is 60 cents or m ore, rate of tax is 1 0 per cent of the price of admission.

Table G-6 — LIQUOR TAXATION AS AT 30 JUNE 1974 The tax below is payable by retailers, i.e. by licensed victuallers, spirit m erchants, wine sellers, etc., as a percentage on the wholesale value, including custom s and excise duties, of purchases during the previous year. This annual fee is also payable by liquor w holesalers and is based m ainly on the value of their sales, including customs and excise duties, to non-licensed purchasers. In addition to the fees shown in the table the States impose a num ber of fixed annual licence fees such as for spirit merchants, brew ers and grocers.

N ew South South Western

Wales Victoria Queensland Australia Australia Tasmania

Per cent Per cent Per cent Per cent Per cent Per cent

6 (a) 6 6 6 S i (b) 6

(a) The rate is 9 per cent for a T avern Licence and 4 per cent for an A ustralian Wine

Licence where only a wine licence is held. (b) The rate is 71 per cent for a T avern Licence and a Store Licence.

185

T a b l e G - 7 — RACING TAXATION AS AT 30 JUNE 1974— c o n tin u e d

South Australia

D oubles, trebles and jackpots— 15% O ther bets— 14%

8.33% to 35%

(doubles, trebles and jackpots) and 8 .9 3 % to 37.5%

(other bets) accord­ ing to turnover

( ictual figure for

1973-74— 34.07% )

D oubles, trebles and jackpots— 15% O ther bets— 14%

D oubles and trebles, jackpots— 33.33% O ther bets— 35.7 %

Western Australia

15%

M etropolitan—50 % win and place b ets; 2 3 .3 % all other

bets (10% to TAB, rem ainder to clubs)

15%

40%

15%

M etropolitan— 33.3 % C ountry— 16.6%

Nil

Nil

Notes: (i) There are greatly varying scales o f licence fees for bookmakers and clerks both on and off" course. (ii) M ost States pay to revenue unclaimed dividends and/or fractional am ounts resulting from rounding off o f dividends. (iii) In South Australia licensed off-the-course bookmakers operate only in Port Pirie. (iv) The rates and fees shown are those applicable to horse-racing and in m ost cases to trotting meetings. W hen included in betting transactions the rates, etc., shown also apply to

greyhound racing. (v) M ost States apportion a percentage of totalisator deductions to racecourse development funds.

Table G-8 — POKER MACHINE LICENCE TAXES AS AT 30 JUNE 1974 (Levied only in New South Wales) 1. Licence Tax

Class of M achine R ate o f Licence Tax per annum

1 cent . . . . . . $ 2 0 per m achine

2 cents . . . . . . $40 per m achine

5 cents . . . . . . $ 1 0 0 per m achine

10 cents . . . . . . $ 2 0 0 per m achine

2 0 cents . . . . . . $ 1 ,1 0 0 for each of the first two machines rising

to $3,000 for each m achine in excess of 20

A higher rate of licence tax applies to m ultiple-coin machines. A concession o f 50 per cent of the total licence tax based on the num ber of licensed

m achines is granted to clubs whose aggregate net takings from all such machines do not exceed $30,000 per annum. F or other clubs the concession is the am ount, if any, rem aining after deducting from 50 per cent of the total licence tax based on the num ber of machines the am ount by which the aggregate net takings per annum exceed $30,000.

A concession of 50 per cent of the norm al licence tax payable is also granted to new clubs fo r a period up to the first three years of operations w here m em bership does not exceeed 250.

2. Supplementary Licence Tax

This is a tax on the net revenue from licensed poker machines which exceeds $30,000 per annum. N et revenue is defined as gross takings from machines less licence tax, prizes and a m aintenance allowance of $175 per m achine. The rates are:

A nnual N et R evenue R ate o f Tax

$30,001 to $39,999 . . . . 1 2 1 per cent of the net revenue less the am ount

by which such revenue is below $40,000

$40,000 to $41,200 . . . . Payment of $5,000

$41,201 and over . . . . 15 per cent of net revenue

3. Additional Supplementary Tax

This is a tax on net revenue, as defined for Supplem entary Licence Tax, where the net

revenue exceeds $100,000. The rates of tax are:

A nnual N e t R evenue R ate o f Tax

On the am ount between $100,001 and $200,000 .................................................. 21%

On the am ount between $200,001 and $500,000 .................................................. 5 %

On the am ount in excess of $500,000 ............................................................ 9 %

Table G-9 — REVENUE FROM LOTTERIES, 1973-74

N ew South Wales Victoria Queens­

land

South Australia W estern Australia Tasmania

Stamp D uty on ticket sales Nil Nil 5% Nil Nil Nil

Tax on turnover (a) 31.39% 31% (b) 25.58% 29.21% 26.75% 15.5%

(a) Calculated by expressing the net proceeds to the governm ent (after the paym ent of prizes, adm inistrative costs, and any commission paid by lottery office) as a percentage of the face value of ticket sales. (b) Excludes V ictoria’s share of tax on ticket sales in Tasm ania and New Zealand.

188

(Levied in Victoria, South Australia and Tasmania only)

T a b l e G - 1 0 —STATUTORY CORPORATION PAYMENTS AS AT 30 JUNE 1974

V ictoria South Australia Tasmania

4% on gross revenue from sale of power by the State Electricity Commission and the G as and Fuel

Corporation during the

previous financial year

5% on the revenue from sale

of electricity by the Elec­

tricity T rust during the

previous quarter

5% on the revenue from retail sales of electricity by the

Hydro-Electric Comm ission during the previous financial year. Sales to certain bulk

purchasers are exempt.

Table G -ll — CASINO TAXATION AS AT 30 JUNE 1974 (Levied only in Tasmania)

Casino Tax

This is a tax calculated according to a graduated scale based upon gross profit for each month (a).

Gross profit for m onth Rate of tax applicable to gross profit for each day

during m onth

Less than $ 25,000 5%

$25,000 to $125,000 5% plus 0.25% of every $1,000 by which the gross

profit (b) exceeds $25,000

More than $125,000 30%

(а) “G ross profit” m eans the total am ount wagered less am ounts paid out in winnings.

(б) A djusted to nearest $1,000.

Licence Tax

The licence tax is $2,500 per month.

189

Table G-I2 — TOBACCO TAXATION, 1973-74 (Levied only in Tasmania)

Consumption Tax (a)

The rate imposed on the consum ption of any tobacco was 7 i per cent of the retail value of that tobacco. This tax was collected by retailers but was paid by consum ers of tobacco.

Licensing Tax (b)

(i) Ordinary retailers’ licences (other than occasional licences) The licensing tax imposed on tobacco retailers was based on average tobacco stocks in the year ending six m onths before the beginning of the licensing period.

Average stock

W here the m onthly stock did not

exceed $500

W here the m onthly stock exceeded $500

Rates

$2

An am ount equivalent to 30 per cent

of the assessable stock value or $ 2

whichever am ount was the greater

(ii) Vending m achine licences (other than occasional licences) A pplication could be m ade to pay tax of 30 per cent of the m onthly stock value.

Otherwise, the scale of tax was as follows:

Capacity o f the vending m achine A m o u n t of

(num ber of packets) m achine fee

$

N ot m ore than 100 20

M ore than 100 but not m ore than 200 50

M ore than 200 but not m ore than 350 75

M ore than 350 but not m ore than 500 150

M ore than 500 300

(iii) Occasional licences A n occasional licence was a licence granted fo r other than an annual period. The tax was $1 together with a further $1 for each day in respect of which the occasional

licence was granted.

(a) The collection of the consum ption tax was suspended from 1 M ay 1974.

(b) The collection of the licensing tax was suspended from 1 July 1974.

Table G-13 — PAY-ROLL TAXATION AS AT 30 JUNE 1974

N ew South South W estern 1

Wales Victoria (a) Queensland Australia Australia Tasmania

Per cent Per cent Per cent Per cent Per cent Per cent

4.5 4.5 4.5 4.5 (b) 4.5 4.5 (b)

(a) U nder the D ecentralized Industry Incentive Paym ents A c t 1972 approved decentralised secondary industries became eligible to apply to the M inister for State Development and D ecentralization for rebates of pay-roll tax paid in the previous year in respect of their decentralised establishments.

(b) The wages of certain State governm ent employees are exempt.

190

APPENDIX Η

Budget Impact of State Business Undertakings H.l The general approach adopted by the Commission in its treatment of the finances of business undertakings as they affect the assessment of the financial needs of claimant States is set out in Chapter 4 (paragraphs 4.147 to 4.153). The

detail contained in this appendix is intended to give a brief summary of the operations and finances of a selected number of business undertakings showing their estimated cost to the States’ budgets. In assessing the needs of a claimant State the Commission has adopted the Exclusion of Budgetary Impact method (as

explained in Chapter 4, paragraph 4.150) for certain undertakings, namely Metro­ politan Water Supplies, Harbours, Electricity and Housing, and has excluded from its comparisons the results of these undertakings. Transactions relating to other business undertakings, such as State banks and insurance offices, are also excluded

but are not referred to in this appendix. In the case of forestry, the Commission has (for the reasons set out in the 41st Report, paragraphs 4.17 to 4.21) continued to exclude all forestry revenue and expenditure except for interest on debt incurred on forestry operations during the ten years preceding the year of review. For needs in relation to other business undertakings included in this appendix the

Commission has adopted the Comparison of Modified Budgetary Impact approach set out in Chapter 4, paragraph 4.149.

R a il w a y s

H.2 Financial data for State railways for 1973-74 and for the preceding four years are shown in the tables below. Tables H -l to H-4 are based on the published accounts of the six State railway authorities, rearranged as far as possible for uniformity and comparability of data. As a result the figures do not always corres­

pond with those in the published accounts. As with the published accounts, the expenditure and revenue shown in the tables reflect an accrual basis of accounting and differ from the cash receipts and expenditure recorded in States’ budgetary accounts and summarised in Appendix F.

H.3 Although State practices are similar in many respects, there are some differences in financial policies and accounting practices which tend to impair interstate comparability. For example, the revenues shown in Table H-l reflect the extent to which the various Treasuries reimburse the railways for freight and fare

concessions to certain classes of users, such as primary producers and pensioners. Tables H-2, H-3 and H-4 reflect such matters as treatment of maintenance expen­ ditures, varying bases of providing for contingencies such as pension payments, and differences in the manner of charging the accounts with sinking fund contributions

and depreciation provisions. Footnote (b) to Table H-4 indicates that, because of the limited debt charges included in the Victorian railway accounts, the published results for that State are not comparable with those of the other States.

H.4 The financial results shown in Table H-4 do not indicate the full impact of railway operations on State finances, as certain expenditures attributable to rail­

191

way operations are not included in the railway accounts. In addition to the Treasury reimbursements mentioned in the preceding paragraph, certain debt charges on railway borrowings are excluded from the railway accounts of all States. The special circumstances concerning published railway debt charges in Victoria have already been mentioned. Accordingly, in estimating the net impact of railways on State finances, the cost of Treasury subsidies and debt charges on

railway borrowings excluded from railway accounts needs to be added to the results shown in Table H-4. This is done in Table H-5 below.

H.5 By providing for each State a calculation of the net impact of railways on State finances, the data in Table H-5 give better comparisons between States than those shown in the preceding tables. However, in making interstate comparisons the essential dissimilarities between the various undertakings should not be over­ looked. These arise from such factors as different population distributions and densities, differences in gauges and differences in the composition of traffic and rolling stock. Such factors directly influence the revenue and expenditure patterns of the various systems and the main value of the tables is therefore in comparing movements in figures for individual States.

Table H -l — RAILWAY REVENUE

(Excluding Subsidies for Uneconomic Branch Lines but Including Those for Freight and Fares)

State 1969-70 1970-71 ! 1971-72 1972-73 1973-74

$ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ '0 0 0

New South Wales . . . 247,288 251,899 266,268 254,070 262,691

Victoria . . . . 105.119 108,759 112,791 111,931 115,727

Queensland . . . . 106,004 107,086 121,749 134,258 149,844

South A ustralia . . . 33,566 34,635 35,604 35,332 39,827

Western A ustralia . . . 57,240 61,917 64,846 64,793 79,861

Tasmania . . . . 6,950 5,867 6,129 6,842 7,674

Total . . . 556,167 570,163 607,387 607,226 655.624

Table H-2 — RAILWAY OPERATING EXPENDITURE

(Excluding Interest and Sinking Fund Contributions but Including Provisions for Depreciation in Excess of Sinking Fund Contributions)

State 1969-70 1970-71

. ___

1971-72 1972-73 1973-74

$ ’0 0 0 $"0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

New South Wales . . . 217,359 242,546 263.193 297,894 349,615

Victoria . . . . 118,411 128,919 138,609 156,041 188,624

Queensland . . . . 93,271 101,524 115,742 129,286 162,525

South A ustralia . . . 37,426 40,939 44,601 49,898 58,267

Western A ustralia . . . 54,717 59,349 63,415 67,818 85,956

Tasmania . . . . 8,879 9,744 10,235 11,646 15,346

Total . . . 530,063 583,021 635,795 712,583 , 860,333

192

Table H3 — RAILWAY NET OPERATING RESULTS (Railway Revenue as Shown in Table H-l Less Railway Operating Expenditure as Shown in Table H-2)

State 1969-70 1970-71 1971-72 1972-73 1973-74

$ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

New South W ales . . . + 29,929 + 9,353 + 3,075 — 43,824 — 86,924

Victoria . . . . — 13,292 — 20,160 — 25,818 — 44,110 — 72,897

Queensland . . . . + 12,733 + 5,562 + 6,007 + 4,972 — 12,681

South A ustralia . . . — 3,860 — 6,304 — 8,997 — 14,566 — 18,440

W estern A ustralia . . . + 2,523 + 2,568 + 1,431 — 3,025 - 6,095

Tasm ania . . . . — 1,929 — 3,877 — 4,106 — 4,804 — 7,672

T otal . . . + 26,104 — 12,858 — 28,408 — 105,357 — 204,709

+ Excess of revenue over operating expenditure. ■ — Excess of operating expenditure over revenue.

Table H-4 — PUBLISHED RAILWAY DEFICITS (a)

State 1969-70 1970-71 1971-72 1972-73 1973-74

$ ’0 0 0 $ '0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

New South Wales . . . 6,009 29,678 36,308 84,356 130,394

Victoria (6) . . . . 21,084 28,993 35,661 54,902 84,571

Queensland . . . . 13,418 21,860 25,377 30,910 53,755

South A ustralia . . . 12,774 16,124 19,477 25,884 29,986

Western A ustralia . . . 9,799 10.966 12,367 17,236 16,795

Tasm ania . . . . 3,214 5,368 5,781 7,120 10,589

Total . . . 66,298 112,989 134,971 220,408 326,090

(a) Results are as shown in the State railway accounts fo r V ictoria and Tasmania. F or

New South W ales the table excludes receipts from C onsolidated Revenue on account of superannuation and losses on country developm ental lines. F o r Queensland the am ount of governm ent subsidy m et directly from Consolidated Revenue Fund for super­ annuation contributions has been added to the published result for the years 1969-70

and 1970-71. From 1971-72 this am ount became a charge on the working expenses of the Railways D epartm ent. F o r W estern Australia receipts from Consolidated Revenue for losses on re-opened lines are excluded. F or New South W ales and South Australia the figures exclude the T reasurer’s contribution to w orking expenses and debt charges. (b) D ebt charges included in railw ay accounts relate only to loan funds used for railway

purposes since 1 July 1960.

H .6 The tables show that the financial results of the States’ railways deteriorated again during 1973-74, combined losses having an impact of $37lm on the States’ finances. This represents an increase of 41 per cent over 1972-73. The highest rate of increase was in Queensland, where the net impact on the State’s

finances increased by 60 per cent to $57m, closely followed by New South Wales (48 per cent to $147m). Queensland revenue was adversely affected by the dis­ ruption of services due to the prolonged wet weather and flood conditions coupled with a failure of the grain crop. The lowest rate of increase was in Western

Australia, where the net impact for 1973-74 increased by 1 per cent. Railway

193

T a b le H - 5 — NET IMPACT OF RAILWAYS ON STATE FINANCES { a )

State 1969-70 1970-71 1971-72 1972-73 1973-74

$ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0

New South Wales . . . — 21,108 — 44,764 — 52,906 — 99,223 — 146,895

Victoria . . . . — 39,131 — 47,625 — 55,646 — 75,094 — 105,250

Queensland . . . . — 23,448 — 28,335 — 30,746 — 35,350 — 56,667

South A ustralia . . . — 13,104 — 16,626 — 19,733 — 26,115 — 30,372

W estern A ustralia . . . — 1 2 ,1 1 2 — 13,118 — 15,463 — 2 0 ,2 1 0 — 20,313

Tasm ania (6 ) . . . — 3,801 — 5,963 — 6,409 — 7,775 — 11,260

T otal . . . — 112,704 — 156,431 — 180,903 — 263,767 — 370,757

(— ) deficit

(a) In addition to the published railway deficits as shown in Table H-4, debt charges on loan capital from which the railways have been relieved and costs to the Treasuries of subsidies fo r freight and fare concessions, etc. are included. (b) See also paragraph F .l (a).

operations during 1973-74 were characterised by increases in operating revenue and relatively larger increases in operating expenditure in all States. All States except New South Wales, Victoria and Queensland increased fares and general freight rates during the year. The substantial increases in operating expenditure recorded in all States were mainly the result of higher wage and salary rates.

H.7 On 20 October 1972, the Public Transport Commission of New South Wales assumed control of government railway and omnibus services. Its financial transactions form part of the State’s budget. Railway revenue increased by $8 .6 m in 1973-74, compared with a decrease of $12.2m in 1972-73 and an increase of $ 14.4m in 1971-72. Total goods and livestock carried in 1973-74 increased by

1.3m tonnes from 1972-73, while revenue from freight increased by $7.7m, compared with a decrease of $13.6m in 1972-73. The increase in goods traffic was associated largely with an increased wheat harvest and additional long distance haulage of steaming coal. There was, however, a decrease in the carriage of live­ stock during the year. The total number of passenger journeys fell by 3.4m or

1.5 per cent in 1973-74. However, because of a larger element of interstate rail travel, earnings fell only slightly ($0.06m) compared with the previous year. Working expenses increased by $51.7m in 1973-74, compared with increases of $34.7m and $20.6 m in 1972-73 and 1971-72. The greater part of the increase was due to higher wage rates. The published financial result was a deficit of $ 130.4m, compared with deficits of $84.4m in 1972-73 and $36.3m in 1971-72.

H .8 In Victoria railway revenue increased by $3.8 m to $115.7m in 1973-74, compared with a decrease of $0.9m in 1972-73 and an increase of $4.0m in 1971-72. Total goods and livestock carried during 1973-74 decreased by 0.1m tonnes, and earnings from this item decreased by $0.1 m to $62.0m. There was a large decline in the carriage of wheat, but this was partly offset by increases in other traffic. The total number of passenger journeys increased by 1.5m and earnings rose by $2.4m. Operating expenditure increased by $32.6m in 1973-74, compared with increases of $17.4m in 1972-73 and $9.7m in 1971-72. As in recent years, the principal rise in expenditure resulted from higher wages and salaries, which increased by $28.3m over the previous year. The published financial result was a deficit of $84.6m, compared with $54.9m in 1972-73 and $35.7m in 1971-72.

194

H.9 In Queensland railway revenue was $149.8m in 1973-74, an increase of $15.5m over 1972-73, compared with increases of $12.5m in 1972-73 and $14.7m in 1971-72. The carriage of goods and livestock increased by 0.3m tonnes to 23.9m tonnes, compared with increases of 5.3m tonnes in 1972-73 and 3.6m

tonnes in 1971-72; revenue from this source increased by $9.6 m in 1973-74, com­ pared with increases of $12.5m and $13.5m in 1972-73 and 1971-72 respectively. The increase in freight traffic and revenue resulted mainly from increases in the carriage of coal, other minerals, fertilisers and general merchandise. There was a

decline in livestock traffic as a result of the floods and market conditions. Also, revenue from agricultural produce decreased by $ 1 .8 m due to a decline in the railings of wheat, sorghum, hay and chaff. The transport of export containers increased during the year from 17,892 to 25,587, and the demand for this service

is expected to continue to grow. Passenger journeys increased by 1.6m to 33.6m and revenue rose by $0.5m to $8.1m. Operating expenditure increased by $33.2m in 1973-74, including an increase of $23.9m for salaries and wages. The operating result was a deficit of $12.7m and the published result after writing off demolished

assets and charges for debt servicing was a deficit of $53.8m, compared with deficits of $30.9m and $25.4m in 1972-73 and 1971-72 respectively.

H.10 In 1973-74 South Australian railway revenue increased by $4.5m, compared with a decrease of $0.3m in 1972-73 and an increase of $1.0m in 1971-72. Goods and livestock traffic increased by 0.8m tonnes to 6 .6 m tonnes and an increase in revenue of $3.4m to $29.8m was recorded. There was an

increase in grain traffic during the year as well as a considerable increase in the transport of general merchandise. The number of passenger journeys increased by 0.3m in 1973-74 while revenue rose by $0.7m. Operating expenditure rose by $8 ,4m to $58.3m in 1973-74, compared with increases of $5.3m in 1972-73 and

$3,7m in 1971-72. The operating result was a loss of $ 18.4m and the published financial result was a deficit of $30.0m, compared with deficits of $25.9m and $19.5m in 1972-73 and 1971-72 respectively.

H .ll Railway earnings in Western Australia for 1973-74 increased by $15.lm to $79.9m; earnings remained almost unchanged at $64.8m in 1972-73 compared with 1971-72. Goods and livestock carried increased by 1.2m tonnes and revenue increased by $13.3m to $67.7m. There were increases in the carriage of practically

all classes of commodities, the major increases being in fertilisers, wheat and other grain products, and oil in tank wagons. The number of passenger journeys increased by 0 .2 m and income by $0.9m. Operating expenses increased by $18.2m to $8 6 .0 m resulting in an operating loss of $6.1 m. The published financial result for

1973-74 was a deficit of $16.8m compared with deficits of $17.2m and $12.4m in 1972-73 and 1971-72 respectively.

H.12 In Tasmania, the amount paid in one year from the Consolidated Revenue Fund to the Transport Commission for reimbursement of losses on railway and other transport services relates to the result of operations of the preceding year. To make the results comparable with those in other States, the

Transport Commission’s operations for 1973-74 have been reviewed instead of the operations for the preceding year.

H.13 Railway earnings in Tasmania increased by $0.9m to $7.7m in 1973-74, compared with increases of $0.7m in 1972-73 and $0.3m in 1971-72. Operating expenditure rose by $3.7m in 1973-74, compared with increases of $1.4m in 1972-73 and $0.5m in 1971-72. Carriage of goods and livestock increased by

195

299,000 tonnes to 1.8m tonnes in 1973-74, compared with an increase of 256,000 tonnes in 1972-73 and a small increase in 1971-72; revenue increased by $0.9m to $6 .9m in 1973-74, compared with increases of $0.7m in 1972-73 and $0.3m in 1971-72. The principal increases in freight revenue were from the additional traffic in woodchips and containers. Passenger journeys continued to decline in 1973-74 with a reduction of 58,700 passenger journeys to 693,000. Revenue from passengers increased by $5,700 to $233,000, due to increased revenue from country services after an increase in fares of approximately 50 per cent on 15 April 1974. The operating result was a loss of $7.7m for 1973-74, while the published result was a deficit of $10.6m, compared with deficits of $7.1m and $5.8 m in 1972-73 and

1971-72 respectively.

M e t r o p o l it a n T r a n s p o r t — T r a m w a y s a n d O m n i b u s e s

H.14 The following table sets out the recorded losses of the various State transport undertakings, together with Consolidated Revenue payments for items such as fare concessions, for the years 1969-70 to 1973-74. The table therefore shows the calculated financial results of the various transport undertakings in the same way as the State railway costs are shown in Table H-5 in the section on State railways. For New South Wales the figures represent the budgetary cost. For Victoria, as explained in paragraph H.16, the results of the Melbourne and Metropolitan Tramways Board, a statutory body subsidised by the State, have been used. The figures in the table therefore represent the loss incurred by the Board together with subsidies received from the State. In South Australia, Western Australia and Tasmania, losses incurred by the undertakings are reimbursed from the Consolidated Revenue Fund but there is usually some variation between the losses incurred in a particular year and the payments from Consolidated Revenue. Accordingly, for those States the figures as shown in the table may not be identical with the budgetary costs.

H.15 As noted in paragraph H.7, the Public Transport Commission of New South Wales administers the public road transport system in the Sydney and Newcastle areas, and the financial transactions of this undertaking form part of the State budget. The combined deficit shown in the accounts of the omnibus transport system amounted to $26,269,000 in 1973-74, an increase of $11.8m over

Table H-6 — METROPOLITAN TRANSPORT — TRAMWAYS AND OMNIBUSES: CALCULATED FINANCIAL RESULTS

State 1969-70 1970-71 1971-72 1972-73 1973-74

$ ’0 0 0 $ ’0 0 0 $ '0 0 0 $ ’0 0 0 $ ’0 0 0

New South Wales . . . — 11,133 — 18,029 — 16,684 — 21,647 — 33,282

Victoria . . . . — 2,045 — 3,997 — 5,131 — 7,842 — 14,162

Queensland (a) . . . — 3,030 — 1,277 — 1,198 — 1,937 — 2,285

South A ustralia . . . — 452 — 940 — 1,004 — 1,745 — 3,273

W estern A ustralia . . . — 2 ,0 0 1 — 2,881 — 4,915 — 6,420 — 8,514

Tasmania . . . . — 1 ,2 2 0 — 1,597 — 1,572 — 1,890 — 2,808

T otal . . . — 19,881 — 28,721 — 30,504 — 41,481 — 64,324

(— ) deficit (a) As recorded in the accounts of the B risbane City Council.

1 9 6

1972- 73, compared with an increase of $5.1m in 1972-73. The increase in the combined deficit was chiefly attributable to higher wages and additional provision for retirement benefits. Wages and associated costs increased by $11.7m in 1973-74. The full budgetary cost is not limited to the amount of the deficit, because the

Consolidated Revenue Fund is charged with such items as transport concessions, superannuation contributions and debt charges on capital no longer reflected in the accounts of the undertakings. In addition, an annual contribution is received from the Consolidated Revenue Fund towards the cash requirement for the

purchase of omnibuses. This contribution decreased by $200,000 in both 1973-74 and 1972-73. As this item is of a capital nature it has been excluded from the Commission’s assessment of the needs of the claimant States in this area. The total estimated cost of the above charges to Consolidated Revenue was $7,013,000 in

1973- 74, a decrease of $200,000 from 1972-73, compared with a decrease of $40,000 from 1971-72 to $7,213,000 in 1972-73. The total estimated budget cost as shown in Table H -6 increased by $11,635,000 in 1973-74, compared with an increase of $4,963,000 in 1972-73.

H.16 The Melbourne and Metropolitan Tramways Board operates outside the budget. In 1973-74 the Consolidated Fund made a contribution to metropolitan transport of $2,075,000 for fare concessions to pensioners and students, the same as for 1972-73. In addition, $500,000 was made available from the Drivers’ Licence

Suspense Account, compared with $620,000 in 1972-73, for debt charges and road maintenance expenses of the Board. For reasons outlined in paragraph 121 of the 36th Report (1969), the Commission includes the financial results of the Melbourne and Metropolitan Tramways Board in its assessment of the needs

of the claimant States in this area. The amounts listed above are included in Table H-6 . The Board’s deficit for 1973-74, exclusive of advances of $8,350,000 from the Works and Services Account of the State and $2,650,000 from the Vic­ torian Department of Transport, increased by $6.4m in 1973-74, compared with

an increase of $2.8 m in 1972-73.

H.17 Metropolitan transport services in Queensland are the responsibility of the Brisbane City Council, and their finances do not affect the State budget. The loss incurred by the Council’s Transport Department increased by $348,000 in 1973-74 compared with an increase of $739,000 in 1972-73.

H.18 In South Australia, the majority of the metropolitan private bus ser­ vices were transferred to the Municipal Tramways Trust on 24 February 1974, thus increasing the Trust’s activities by over 50 per cent. Since the transfer the Trust has operated the services from existing depots. Most of the previous owners

are working as depot managers, controlling the services they previously owned. The Trust incurred a deficit of $2,246,000 in 1973-74, an increase of $0.9m, compared with an increase of $0.7m in 1972-73. In addition, fare concessions reimbursed from Consolidated Revenue increased by $653,000 in 1973-74, com­

pared with an increase of $14,000 in 1972-73. The deficit incurred in 1973-74 was met by a contribution from the Consolidated Revenue Fund of $2,250,000, result­ ing in a total cost to the budget for that year of $3,277,000, compared with a budget cost of $1,704,000 for 1972-73.

H.19 In Western Australia, the Metropolitan (Perth) Passenger Transport Trust is reimbursed from Consolidated Revenue for losses which the Trust incurs in its operations. Such reimbursements increased by $1,129,000 to $5,752,000 in 1973-74, compared with an increase of $1,434,000 in 1972-73. In addition, pay­

197

ments are made from Consolidated Revenue to the Trust for fare concessions allowed to school children and pensioners. These payments increased by $945,000 in 1973-74, compared with an increase of $137,000 in 1972-73, resulting in a total cost to the budget of $8,504,000, an increase of $2,074,000 compared with an increase of $1,535,000 in 1972-73. The actual losses incurred by the Trust increased by $1,149,000 in 1973-74, compared with an increase of $1,404,000 in 1972-73.

H.20 In Tasmania, the Consolidated Revenue Fund reimburses the Metro­ politan Transport Trust for losses incurred by the Trust. The reimbursement from Consolidated Revenue increased by $828,000 in 1973-74, compared with an increase of $382,000 in 1972-73. The cost to the budget includes the Education Department’s expenditure on fare concessions, which increased by $60,000 in

1973-74 compared with a decrease of $47,000 in 1972-73.

M e t r o p o l it a n W a t e r S u p p l i e s , S e w e r a g e a n d D r a in a g e

H.21 In New South Wales, Victoria and Western Australia separately con­ stituted boards control the metropolitan water supply and sewerage systems. Although these boards operate outside the State budgets, in some cases their transactions result in a cost to the budget. For example, in New South Wales part of the debt charges on loan borrowings by the Metropolitan Water, Sewerage and

Drainage Board has been remitted by the Treasury and this has produced an annual budgetary cost of approximately $lm. In addition, the Board has received advances free of repayment obligation from the State and from local government authorities towards water, sewerage and drainage schemes in outlying parts of the Board’s area. Advances during 1973-74 amounted to $2.0m. Beginning in 1971-72, partial rebates of water and sewerage rates were introduced; subsidies paid to the

Board for these rebates in 1973-74 totalled $3.8 m, compared with $3.2m in 1972-73. In past years the Metropolitan Water Supply, Sewerage and Drainage Board in Western Australia remitted to the Treasurer only nominal sinking fund payments on advances from General Loan Fund, but full reimbursement is now being made. In Victoria, debt charges on borrowings from loan funds by the Melbourne and Metropolitan Board of Works are fully recouped.

H.22 In Queensland metropolitan water supply and sewerage are the respon­ sibility of the Brisbane City Council, which operates outside the State budget. The State Treasury, however, provides subsidies for capital works; these amounted to $7,702,000 in 1973-74.

H.23 In South Australia the Engineering and Water Supply Department controls the water and sewerage activities in both metropolitan and country areas, and the operations of the Department are wholly within the State budget. The result of the Department’s financial transactions, after taking into account working expenditure and debt charges, was a surplus of $4,422,000 in 1973-74, compared with a surplus of $4,316,000 in 1972-73.

H.24 In Tasmania the Metropolitan Water Board is responsible for the provision of water to the metropolitan water district, which comprises the cities of Hobart and Glenorchy and certain areas of the municipalities of Clarence and Kingborough. The Board also supplies bulk water to some rural areas surrounding the metropolitan water district. Further reference to this part of the Board’s activities is made in the section on Country Water Supplies, Sewerage, Irrigation and Drainage. The various metropolitan municipal authorities under the Board’s supervision are responsible for reticulation in their own areas and are reimbursed

198

by the Board, on an approved basis, for working expenses relating to their water supply schemes. In turn, the Board’s expenditure, including the advances to the metropolitan authorities, is met partly from the sales of bulk water to rural munici­ palities and industrial consumers, and partly by contributions from the municipal

authorities within the metropolitan water district, determined in accordance with provisions contained in the Metropolitan Water Act. However, there is a cost to the State budget, arising from the metropolitan section of the Clarence Municipality, which is unable to meet the full contribution due to the Board from its own

resources. The deficiency is met by payments from Consolidated Revenue by way of a statutory subsidy, reducing annually, and additional subsidies provided by the Rivers and Water Supply Commission. The combined subsidies for water amounted to $198,000 in 1973-74, compared with $142,000 in 1972-73. Sewerage in the metropolitan area is the responsibility of local authorities, but provision exists for the payment of subsidies by the State Government. Sewerage subsidies paid

in 1973-74 to the Clarence and Kingborough Municipalities were $45,000 and $14,500 respectively, bringing combined metropolitan water and sewerage sub­ sidies to $257,500 in 1973-74, compared with $187,000 in 1972-73.

C o u n t r y W ater S u p p l i e s , S e w e r a g e, I r r ig a t io n a n d D r a in a g e

H.25 In New South Wales the Department of Public Works operates the water supply schemes of Junee, Fish River and South-West Tablelands, which sell water in bulk to local government authorities and large industrial concerns. The Junee and South-West Tablelands Schemes incurred losses in 1973-74 which were re­ imbursed from Consolidated Revenue. The Hunter District and Broken Hill Water

Boards control water supply and sewerage services in the Newcastle and Broken Hill areas respectively, while the Cobar Water Board supplies water to the local shire authority and mining companies. In 1973-74 the Cobar Water Board received a subsidy from Consolidated Revenue and part of the loss of the Broken

Hill Water Board was met from Consolidated Revenue and part by mining com­ panies. Water supply and sewerage services in other areas of New South Wales are controlled mainly by local government authorities, which are eligible under certain conditions for government assistance by way of grants for capital works.

The estimated cost to Consolidated Revenue of debt charges on these grants has been included in the budgetary costs shown in Tables H-7 and H-8 . In addition, a number of irrigation areas and districts operate under the supervision or control of the Water Conservation and Irrigation Commission, whose administrative costs

are included in the Consolidated Revenue Fund. The revenue and operating expenses of these schemes, however, are recorded in a special Treasury working account and are not reflected in the budget. There is no liability on these under­ takings to meet interest and other debt charges, but claims are made, from time

to time, by the Treasurer in the light of the annual result of their operations.

H.26 In Victoria the State Rivers and Water Supply Commission operates within the budget and is responsible for the water supply and drainage in areas not controlled by the Melbourne and Metropolitan Board of Works. It is also the controlling and supervising authority for the provision of water in the

prescribed irrigation districts. During 1973-74 the Commission supplied water to approximately 151 towns with a total population of 311,000 persons, while a further 298 towns containing 709,000 persons were supplied by waterworks trusts or other local authorities. These undertakings operate under the supervision of

the State Rivers and Water Supply Commission. Most of their funds for capital

199

works are provided by the State Government in the form of advances. Works are also financed through loans raised under the provisions of the Water Act 1958 and from the trusts’ own resources. Under the Act, interest in excess of 3 per cent on loans raised by the trusts is recouped by the State. The Commission also

controls the construction and management of sewerage works in Victorian country areas while special acts govern the operations of other waterworks trusts such as the Geelong Waterworks and Sewerage Trust and the Latrobe Valley Water and Sewerage Board.

H.27 Country water supply and sewerage services in Queensland are provided by municipal and shire councils, which also service approximately 2 1 0 cities and towns outside the area controlled by the Brisbane City Council. Irrigation and water conservation are controlled by the Department of Irrigation and Water Supply which operates within the State budget, and net costs together with un­ recovered debt charges on Loan Fund expenditures are a charge on the budget.

Table H-7 — COUNTRY W ATER SUPPLIES, ETC.: BUDGET COSTS r«J

State

1971-72 1972-73

Increase 1972-73 compared with

1971-72 1973-74

Increase 1973-74 compared with

1972-73

$’000 $’000 Per cent $’000 Per cent

New South Wales . . . 28,334 32,035 13.1 32,838 2.5

Victoria . . . . 22,530 24,550 9.0 28,722 17.0

Queensland . . . . 6,301 8,537 35.5 10,148 18.9

South A ustralia . . . 9,535 10.251 7.5 11,877 15.9

W estern A ustralia . . . 14.703 16,387 11.5 17,487 6.7

Tasm ania . . . . 787 935 18.8 985 5.3

(a) A fter modifications.

Table H-8 — COUNTRY W ATER SUPPLIES, ETC.: BUDGET COSTS PER CAPITA (a)

State

1971-72 1972-73

Increase 1972-73 compared with

1971-72 1973-74

Increase 1973-74 compared with

1972-73

$ $ Per cent $ Per cent

New South Wales . . . 17.64 19.49 10.5 19.79 1.5

Victoria . . . . 19.71 22.46 14.0 27.98 24.6

Queensland . . . . 5.50 7.28 32.4 8.27 13.6

South A ustralia . . . 30.56 32.65 6.8 37.70 15.5

Western A ustralia . . . 40.02 48.63 21.5 50.56 4.0

Tasm ania . . . . 2.92 3.57 22.3 3.73 4.5

(a) Relates to estimated population not served by m etropolitan supply authorities.

200

H.28 In South Australia the Engineering and Water Supply Department con­ trols and operates water supplies, conservation and sewerage in the State. Irrigation and drainage schemes are administered mainly by the Department of Lands, the Renmark Irrigation Trust and the South-Eastern Drainage Board; engineering and

advisory services are provided by the Engineering and Water Supply Department. The net costs of these departments and the unrecouped debt charges on loan funds advanced to the Trust are a charge on the State budget. As indicated in paragraph 4.164, only part of the loss of the South-Eastern Drainage Board has been used to calculate South Australia’s need for this item.

H.29 In Western Australia the Public Works Department, operating within the budget, controls water supply, sewerage and irrigation in most areas not served by the Metropolitan Water Supply, Sewerage and Drainage Board. There are, however, some local water boards and mining companies which supply water

and sewerage services.

H.30 The country water supply schemes in Tasmania are largely controlled by municipal authorities which carry out both storage and reticulation. However, in some cases water is purchased in bulk from schemes operated by the Rivers and Water Supply Commission and, in the case of some municipalities adjacent to the metropolitan water district, water is purchased in bulk from the Metro­ politan Water Board. The Rivers and Water Supply Commission may recommend

to the Minister the payment of subsidies where it considers the construction of works would be beyond the financial capacity of the particular municipal authority. Each municipal proposal is examined by the Rivers and Water Supply Commission

to ensure it is economically sound. Eligibility for such assistance takes into account the municipality’s effort to raise revenue. Prior to 1 July 1973 effort was determined by a tenement and block standard system. Since that date the Rivers and Water Supply Commission has assessed the revenue requirement for each water and

sewerage scheme. Cognisance is taken of the ratio which the total amount of the annual values, of all rateable properties in the district served by the works, bears to the total amount of the capital values of those properties. The capacity of rate­ payers of the district to pay and the financial position and circumstances generally of the municipality also are considered.

H.31 Tables H-7 and H -8 above show the estimated budget costs in each State of country water supplies, sewerage, irrigation and drainage, on a total and per capita basis respectively, for the years 1971-72 to 1973-74. There are marked variations between the States in the extent to which the costs of providing these

services are a charge on Consolidated Revenue, as well as fluctuations in the rates of increase in the budget costs of these undertakings from year to year.

H a r b o u r s

H.32 The Maritime Services Board of New South Wales administers all ports in the State as well as being concerned with shipping matters generally. The financial operations of the Board are divided into two sections; all revenues and expenditures at the ports of Sydney, Newcastle and Botany Bay, except those

arising from pilotage and navigation services, are recorded in the Maritime Services Board Fund, whose transactions form part of the New South Wales budget. Operating revenues and expenditures associated with pilotage and navigation services at all ports in the State, together with other revenue and administration

expenditure at Port Kembla and the smaller ports, are recorded separately in the

201

Consolidated Revenue Fund. Also forming part of Consolidated Revenue are receipts and payments relating to coal loading works and to properties in the Observatory Hill area in Sydney which are administered by the Board on behalf of the government. In addition, harbour costs include certain Consolidated Revenue Fund charges for public works and debt charges on loan funds used for harbour works. After taking into account all of these items of revenue and expenditure in Consolidated Revenue, including estimated debt charges and the net surplus or deficit on the year’s operations of the Maritime Services Board, the estimated net budgetary cost in 1973-74 was $858,000, compared with a cost of $2,862,000 in 1972-73.

H.33 In Victoria separately constituted trusts operate the ports of Melbourne, Geelong and Portland, while other ports are controlled by the Ports and Harbors Division of the Department of Public Works. The Melbourne Harbor Trust is required by statute to pay 2 0 per cent of its wharfage and tonnage revenue to the budget. These payments, amounting to $963,000 in 1973-74 and $1,347,000 in 1972-73, are included in the total budget revenue from harbours, which amounted to $4,790,000 in 1973-74, compared with $4,280,000 in 1972-73. Expen­

diture on harbours by the Public Works Department was $5,758,000 in 1973-74 compared with $2,629,000 in 1972-73 and included payments of $1,314,000 and $785,000 in 1973-74 and 1972-73 respectively to the Portland Harbor Trust towards the maintenance of port facilities and other expenses. Additional budgetary costs by way of estimated debt charges on loan funds used on harbour works brought the total expenditure to $8,213,000 in 1973-74, compared with $4,747,000 in 1972-73. The net result of each year’s operations was a deficit of $3,423,000 in

1973-74 and a deficit of $467,000 in 1972-73.

H.34 In Queensland separately constituted harbour boards control the larger ports of Bowen, Bundaberg, Cairns, Gladstone, Mackay, Rockhampton and Towns­ ville. Although these boards operate outside the budget, their operations affect the budget because part of the annual debt charges on loan borrowings is met by the budget. Brisbane harbour and a number of small outports in Queensland are controlled by the Department of Harbours and Marine but their financial trans­ actions are recorded in the Harbour Dues Fund, which is outside the budget. The net budgetary cost of harbours was estimated to be $1,754,000 in 1973-74 and

$1,157,000 in 1972-73.

H.35 The Department of Marine and Harbors in South Australia manages and controls all harbours in the State, although a number of wharves and jetties are privately owned and operated either through the enactment of special legisla­ tion or under licence granted by the Minister. In 1973-74 the cargo handled at these wharves and jetties represented 56 per cent of the total passing through the State’s ports. The private operators pay conservancy dues and pilotage to the Department; in most cases wharfage is paid at special rates but tonnage rates are paid only in certain circumstances. In 1973-74 earnings increased by

$2,710,000, mainly due to an increase in harbour charges operative for almost a full year. This resulted in a net surplus of $110,000 for 1973-74, compared with a net cost to the budget of $1,206,000 in 1972-73.

H.36 In Western Australia separately constituted authorities, whose financial transactions are outside the budget, operate the ports of Fremantle, Albany, Bunbury, Esperance, Geraldton and Port Hedland. However, there is some effect on the budget when there is an over-payment or short-payment by these

202

authorities of debt charges on loan funds. There were under-payments of $18,000 and $351,000 in 1973-74 and 1972-73 respectively. All other ports in Western Australia are controlled by the Harbour and Light Department, which operates within the budget. The estimated total net budget cost of harbours was $1,101,000

in 1973-74, compared with $1,214,000 in 1972-73.

H.37 Control of harbours in Tasmania is vested in marine boards which are mainly financially self-supporting. However, in 1973-74 Consolidated Revenue Fund assistance of $16,000 was given for Port Huon and $22,500 to the Circular Head and King Island Marine Boards. The corresponding figures for 1972-73 were

$30,000 and $78,000 respectively.

E l e c t r ic it y

HAS The Electricity Authority of New South Wales is responsible for the development and regulation of electricity supply and the administration of the rural electrification and traffic route lighting subsidy schemes. The Electricity Commission of New South Wales is the major generating authority and is respon­

sible for bulk sales of electricity to local governing bodies, the railways and certain large industrial concerns. In turn, the Commission purchases about 10 per cent of its power requirements from the Snowy Mountains Hydro-electric Authority

and also interchanges power with the State Electricity Commission of Victoria. It is also responsible for developing power resources and extending and con­ solidating the main transmission network in rural areas. Because of the high cost of the rural electrification program, local suppliers receive subsidies from the

Electricity Authority which are based on the estimated cost of a new scheme and the number of consumers to be served, but subject to certain maximum limits. By statute, the Authority is reimbursed for the cost of these subsidies, one-half being paid by the Electricity Commission and the other half from Loan Fund.

In 1973-74 the cost of each half was $674,000 compared with $742,000 in 1972-73. In addition, the Authority receives from Consolidated Revenue a contribution towards its administrative expenses, 50 per cent of which is recouped by Con­ solidated Revenue from the Electricity Commission. In 1973-74 the net contribu­

tion from Consolidated Revenue was $550,000, compared with $443,000 in 1972-73. The total budgetary cost of the contribution from Consolidated Revenue and the Loan Fund allocation amounted to $1,224,000 in 1973-74, compared with $1,185,000 in 1972-73.

H.39 In Victoria it is the responsibility of the State Electricity Commission to co-ordinate and extend the supply of electricity throughout the State. The Com­ mission retails electricity to individual consumers; it also supplies bulk electricity to certain large consumers, to 11 municipal authorities, and to several border municipalities and irrigation settlements. Supply has now been extended through

nearly all of the State. The Commission meets all expenditures, including depreci­ ation and debt charges, from its own revenue and in addition pays royalties on brown coal production. These royalty payments amounted to $564,000 in 1973-74, compared with $586,000 in 1972-73. The Commission also makes a statutory

payment to the budget based on 4 per cent of its gross revenue from sales for the previous year. The payments were $9,720,000 and $9,260,000 in 1973-74 and 1972-73 respectively.

H.40 The State Electricity Commission of Queensland is a statutory authority with administrative powers for general control, organisation and planning of the

203

efficient development of electricity supplies in the State. It is also empowered to operate generating stations and transmission lines, and to sell bulk electricity. Planning for the establishment of a central generating authority, with inter­ connecting transmission lines between the regional authorities, is in progress, but at present electricity supply is mainly composed of three regional schemes which generate and transmit electricity within their own particular areas. The Southern Electric Authority is responsible for bulk supplies to the Brisbane City Council, the Wide Bay-Burnett Regional Electricity Board and the Dalby Town Council; the Capricomia Regional Electricity Board is responsible for the central region and the Northern Electricity Authority supplies bulk electricity to Cairns, Townsville and Mackay Regional Electricity Boards. Subsidies and loans for electrical works in remote areas are made available by the State Treasury. Debt charges on these advances were fully recouped in 1973-74.

H.41 Although some electric power in South Australia is generated by local authorities and private organisations, the main source of electric power is the Electricity Trust of South Australia. The Trust is responsible for unification and co-ordination of the State’s electric power supply and for ensuring that economic and reliable power is available to consumers. It supplies electricity in bulk and also sells direct to consumers. The Trust operates outside the budget but is provided with some funds from the General Loan Fund, on which it pays debt charges to the Treasury. In addition, Consolidated Revenue makes available to the Trust certain funds to be paid as subsidies to approved electricity undertakings in country areas to meet tariff reductions. The payment in 1973-74 from Consolidated Revenue for this purpose was $551,000 compared with $511,000 in 1972-73. The Electricity Trust is required to make a contribution to Consolidated Revenue in the form of a quarterly levy related to its revenue from the sale of electricity in the previous quarter. The Electricity Trust of South Australia Act Amendment Act which was passed during 1973-74 increased the levy from 3 per cent to 5 per cent. The levy amounted to $3,755,000 in 1973-74 and $2,242,000 in 1972-73.

H.42 In Western Australia the State Electricity Commission, which operates outside the budget, has the responsibility for co-ordinating all power under­ takings and encouraging and promoting the use of electricity in the State. The Commission supplies power to the southern half of the State, which includes 90 per cent of the State’s consumers. Consumers outside the Commission’s system are supplied by local authorities, private concessionaires or mining companies. In the North-West of the State the Public Works Department operates several electricity undertakings with the consent of the State Electricity Commission, and the financial transactions relating to these operations have been included in the budget. How­ ever, the Commission has been gradually acquiring control of and responsibility for electricity supplies in these outlying areas. Unrecouped debt charges on account of electricity supply were $167,000 in 1973-74 and $178,000 in 1972-73.

H.43 Tasmania is the only State in which hydro-electric works provide the major source of power. Authority to develop and reticulate electricity for all purposes is vested in the Hydro-Electric Commission which generates and distri­ butes electricity in the State. The Commission operates outside the budget but receives loan funds from the Treasury on which it pays debt charges; it also receives a subsidy from Consolidated Revenue for the supply of electricity to certain islands. This subsidy amounted to $43,000 in 1973-74 and $31,000 in

1972-73. The Hydro-Electric Commission (Contributions) Act requires the Com­ mission to make annual contributions to Consolidated Revenue at a rate of 5 per

204

cent of the total revenue from retail sales of energy in the preceding financial year. The contributions for 1973-74 and 1972-73 were $1,362,000 and $1,251,000 respectively.

F o r e s t r y

H.44 All States are engaged in forestry operations but in general these activities are only partially recorded in the various State budgets.

HAS In New South Wales the Forestry Commission is responsible for forestry operations. The Commission pays receipts from royalties, licences, permits and timber inspection fees into Consolidated Revenue, together with net proceeds from the Commission’s timber-getting activities. The total amount paid into Con­

solidated Revenue from these sources in 1973-74 was $10,204,000, compared with $9,069,000 in 1972-73. The main items of expenditure charged against Consolidated Revenue are departmental expenses, estimated debt charges and, under the Forestry Act, the transfer to a Special Deposit Account of funds to finance renewal and maintenance of the State’s forestry resources. In 1973-74 total expenditure was

$15,951,000 resulting in a net budgetary cost of $5,747,000. This compares with a total expenditure of $14,178,000 in 1972-73, resulting in a net budget cost of $5,109,000.

H.46 The Forestry Commission in Victoria operates in a similar fashion to its counterpart in New South Wales. Gross receipts from rents, royalties and sale of products are paid into the budget; in 1973-74 these collections amounted to $8,775,000, compared with revenue of $7,439,000 in 1972-73. Expenditure charged

to the budget in 1973-74 was made up of departmental expenses of $6,331,000, grants to the Forestry Fund to finance expenditure on forestry activities of $3,872,000, and debt charges of $3,349,000. The result was a net cost to the budget of $4,777,000 in 1973-74. For 1972-73 total expenditure was $12,037,000 and the

net budget cost was $4,597,000.

H.47 In Queensland forestry transactions are recorded in the accounts of the Forestry and Lumbering Fund; any surplus in this Fund is applied to principal and interest charges on loan indebtedness to the Treasury. The surplus on the Fund’s operations in 1973-74 of $2,705,000 fell short of the annual interest and

estimated sinking fund charges by $2,790,000. The administrative costs of the Forestry Department for 1973-74 amounted to $4,215,000. The total charge to the budget for forestry in 1973-74 was therefore $7,005,000, compared with $5,387,000 in 1972-73.

HAS in South Australia the Woods and Forests Department controls forestry activities. While the Department’s financial transactions are outside the State budget, it makes a contribution to Consolidated Revenue from any surplus which it earns. In 1973-74 this contribution amounted to $1,920,000, compared with

$1,800,000 in 1972-73. After taking into consideration the shortfall in debt charges of $118,000, a net contribution of $1,802,000 was made to the South Australian budget from the Department’s funds in 1973-74. This compares with $1,832,000 in 1972-73.

H.49 The gross revenue collected by the Forests Department in Western Australia is paid into Consolidated Revenue, and under the Act nine-tenths of net revenue is transferred to the Forests Improvement and Reforestation Fund. In 1973-74 the gross revenue was $6,001,000 and the transfer to the Fund was

205

H.50 In Tasmania revenue earned from royalties, rents and sales by the Forestry Commission in each year is paid into Consolidated Revenue, and in the following year is transferred to the Forestry Fund to finance forestry expenditure. In 1973-74 the amount paid into Consolidated Revenue was $3,259,000, compared with $2,517,000 in 1972-73, and the amount transferred to the Forestry Fund was

$2,517,000, compared with $2,127,000 in 1972-73. Estimated debt charges on loan expenditure on forestry charged to Consolidated Revenue amounted to $1,456,000 in 1973-74, compared with $1,331,000 in 1972-73, while interest of $550,000 calculated on loan expenditure as at 30 June 1963 (that is, ten years prior to the commencement of the 1973-74 financial year) was recouped from the Forestry Commission. In 1972-73 interest amounting to $500,000 was recouped. The final net cost to the budget in 1973-74, including unrecouped sinking fund charges estimated at $190,000, was $164,000, compared with a net cost of $442,000 in

1972-73.

$2,727,000. This, together with other items of expenditure such as salaries and debt charges, resulted in a net deficiency for the year of $370,000. In 1972-73 the net deficiency was $361,000, the transfer to the Fund was $2,240,000 and the gross revenue paid into Consolidated Revenue was $5,040,000.

H o u s i n g

H.51 In all States there are separately constituted housing authorities whose function is to provide low-cost housing, either for rental or purchase, to persons of limited means. Generally the housing authorities in each State operate indepen­ dently of the budget, but in several States there are some budgetary costs arising from housing activities. The principal funds available to the housing authorities were usually provided under the respective Commonwealth-State Housing Agree­ ments until 1970-71, but allocations from State loan funds were also made. In

1971- 72, the Australian and State Governments agreed on arrangements under which housing allocations would be met by the States out of their approved Loan Council programs, which were higher on that account than they would otherwise have been. In 1973, the Australian Government entered into an agreement with each State under which the States will receive advances for welfare housing purposes during the five years 1973-74 to 1977-78, these advances to be outside,

and in addition to, the State Loan Council programs.

H.52 In New South Wales, payments are made from Consolidated Revenue to the Housing Commission to assist in providing housing for elderly persons. The amount allotted for this purpose was $80,000 in each of the years 1973-74 and 1972- 73. In addition, $1,000,000 of the proceeds from poker machine licences was allotted to the Housing Account, the remainder being paid to the Hospital Fund.

H.53 In Victoria, the financial transactions of the Housing Commission take place outside the budget. However, the unrecouped debt charges associated with loan fund expenditure on slum reclamation are a cost to the budget. These charges amounted to $1,040,000 in 1973-74 and $990,000 in 1972-73.

H.54 In Queensland, there was a net contribution to the budget of $419,000 in 1973-74 as a result of over-recoupment of debt charges on loan funds advanced for housing. This compared with a budgetary cost of $486,000 in 1972-73.

H.55 In South Australia there is no budgetary cost from housing. In Western Australia, the sole cost is the reimbursement to the State Housing Commission

206

by the Treasury of rent subsidies granted to certain occupants of houses in the North-West. In 1973-74 the cost of the rent subsidy was $208,000 compared with $147,000 in 1972-73.

H.56 In Tasmania, profits of the Housing Department are paid into Con­ solidated Revenue in the year following that in which they are earned, while the cost of rental rebates is met from Consolidated Revenue in the year in which it is incurred. In 1972-73 these transactions resulted in a budgetary cost of $426,000.

The Housing Department recorded a loss for 1972-73, consequently no revenue was paid into Consolidated Revenue in 1973-74. Therefore the budgetary cost for 1973-74 was $725,000, being the cost of rental rebates in that year. An additional cost to the budget arises from the housing activities of the Agricultural Bank,

which pays profits into the Consolidated Revenue Fund but receives a contribution from the Fund for interest payments on payments on bank borrowings for housing purposes outside the State works and housing program. The net effect of all housing activities in Tasmania in 1973-74 was a budgetary cost of $738,000, com­

pared with a cost of $443,000 in 1972-73.

207

APPENDIX 1

M eetings and Appearances The Commission held public Hearings in— Brisbane—on 9, 10 and 11 December 1974; Adelaide—on 11 and 12 February 1975;

Canberra—on 14 April 1975; and confidential Hearings in— Canberra—on 15 July 1975.

Representation at the various Hearings was as under:

Brisbane Hearings

Government of Queensland—The Honourable Sir Gordon Chalk, K.B.E., M.L.A., Treasurer; Mr L. A. Hielscher, Under Treasurer; Mr J. Leech, Deputy Under Treasurer. Australian Treasury—Miss K. Gleeson, Chief Finance Officer. Government of South Australia—Mr T. A. Grant, Research Officer. Government of Tasmania—Mr D. Goodwin, Senior Research Officer.

Adelaide Hearings

Government of South Australia—The Honourable D. A. Dunstan, Q.C., M.P., Premier and Treasurer; Mr E. J. Carey, Under Treasurer; Mr R. D. Barnes, Deputy Under Treasurer; Mr J. T. Hill, Senior Finance Officer. Australian Treasury—Mr L. J. Buckland, Senior Finance Officer. Government of Queensland—Mr L. J. Midson, Research Officer. Government of Tasmania—Mr D. E. Kirby, Economist.

Canberra Hearings— April 1975

Australian Treasury—Sir Frederick Wheeler, C.B.E., Secretary; Mr R. Daniel, Deputy Secretary; Mr A. R. G. Prowse, First Assistant Secretary; Mr P. J. Emery, Assistant Secretary.

Government of Queensland—Mr L. A. Hielscher, Under Treasurer; Mr J. Leech, Deputy Under Treasurer. Government of South Australia—Mr R. D. Barnes, Deputy Under Treasurer. Government of Tasmania—Mr J. Addison, Research Officer.

Canberra Hearings— July 1975

Australian Treasury—Mr P. J. Emery, Assistant Secretary; Mr J. B. Ayre, Senior Finance Officer. Government of Queensland—Mr L. A. Hielscher, Under Treasurer; Mr V. C. Doyle, Assistant Under Secretary (Budget). Government of South Australia—Mr J. T. Hill, Senior Finance Officer. Government of Tasmania—Mr L. V. Beilis, Deputy Under Treasurer; Mr M.

McVilly, Chief Budget Officer.

208

Official inspections undertaken by the Commission during the year were:

In Queensland—Library facilities at Stones Corner, Garden City, Woodridge, Ann Street, Stafford Heights State School and The Gap State School; State Library; State Museum; State Art Gallery; Ferny Hill Pre-School Centre; Education Film Centre, Ashgrove; railways facilities at Roma Street, Corinda, Redbank Workshops and Railway Museum; water police facilities, Brisbane River; police

and school facilities at Camooweal and Croydon; hospital, police, railways, local authority and Aboriginal facilities at Norman ton; mining operations, hospital, police and school facilities at Weipa and Greenvale; police, school, hospital and council facilities at Thursday Island and Cooktown; facilities for Aborigines at

Thursday Island; primary industries and irrigation and water supply facilities in the Atherton Tableland area; school, hospital and police facilities at Momington Island; police, school and local authority facilities at Georgetown.

In South Australia—Water supply installations at Uley-Wanilla Basin, Lock, Polda, Elliston, Streaky Bay and Port Lincoln; terminus of Lock-Kimba and Morgan-Whyalla pipelines; Yeldulknie Reservoir; rail and bulk loading facilities at Thevenard and Port Lincoln; schools at Ceduna, Minnipa, Kimba and Port

Lincoln; hospitals at Murat Bay, Kimba, Whyalla, Cowell and Port Lincoln; libraries at Port Augusta, Whyalla and Port Lincoln.

The number of witnesses sworn and examined was:

Queensland ................................. 31

South Australia ......................... 22

Australian Treasury ................. 3

In addition to these Hearings and official inspections, the Commission met on 28 days since 1 October 1974 for discussions on matters arising out of the Hearings and for preparation of this Report.

209

APPENDIX J

List of W itnesses

Adam, James Robert, Mineral Development Engineer, Department of Mines, South Australia. Ayre, John Benjamin, Senior Finance Officer, Australian Treasury, Canberra. Barker, Barry Malcolm, Secretary, Totalizator Agency Board, South Australia. Barnes, Ronald David, Deputy Under Treasurer, South Australia. Berkeley, George Fitzharding, Director of Special Education Services, Queensland. Berry, Ronald Stanley, Senior Clerk (Applications Section), Department of Eands,

Queensland. Bliss, David Eeslie, Accountant, Department of Elealth, Queensland. Boland, Kenneth James, Deputy Auditor-General, South Australia. Carey, Edward John, Under Treasurer, South Australia. Carlson, Edward John, Manager, Golden Casket Art Union, Queensland. Cook, George William, Assistant Under Secretary, Department of Mines, Queens­

land.

Cook, Neville James, Valuer-General, Queensland.

Doody, Kevin Frederick, Assistant General Manager, State Government Insurance Office, Queensland.

Douglas, Colin Roy, General Manager, State Government Insurance Office, Queensland.

Doyle, Vincent Charles, Assistant Under Secretary (Budget), State Treasury, Queensland.

Emery, Peter John, Assistant Secretary, Australian Treasury, Canberra.

Evans, Hamilton John, Assistant Under Secretary, Department of Primary Industries, Queensland.

Guymer, Archibald Elwyn, Director-General of Education, Queensland.

Hale, Spencer Moray, Inspector of Police, Queensland.

Harris, Frank Randall, General Manager, Municipal Tramways Trust, South Australia.

Hazeal, John Lewis, Special Investigating Officer, South Australian Railways. Hielscher, Leo Arthur, Under Treasurer, Queensland.

Hill, John Thomas, Senior Finance Officer, State Treasury, South Australia, Johns, Robert Keith, Acting Deputy Director of Mines, South Australia.

Jones, Albert Walter, Director-General of Education, South Australia.

Killmier, Allan Neil, Acting Assistant Director of Administration, Engineering and Water Supply Department, South Australia.

Kimber, Hugh Robert Reid, Engineer for Water Supply, Engineering and Water Supply Department, South Australia.

210

Lapidge, Desmond Percy, Director of Marketing, Department of Primary Industries, Queensland.

Lawrence, Leonard George, Acting Member, Land Administration Commission, Queensland.

Leech, John, Deputy Under Treasurer, Queensland.

Lewis, Keith William, Director and Engineer-in-Chief, Engineering and Water Supply Department, South Australia.

Livingstone, Peter Gordon, Deputy Director-General of Health and Medical Services, Queensland.

McMullen, Jan William, Chief Assessor, Department of Lands, Queensland.

Madsen, Morton Frederick, Acting Commissioner of Stamp Duties, Queensland.

Midson, Leslie James, Research Officer, State Treasury, Queensland.

Minchin, Gordon Victor, Manager, Lotteries Commission, South Australia.

Moessinger, Godfrey William Patrick, Accountant, Department of Mines, Queens­ land.

Murray, Christian Auriel Fervig, Chief Railway Officer, Department of Railways, Queensland.

Norman, Edward Ernest, Executive Director of Services and Assistant Under Secretary, Department of Health, Queensland.

Olding, Raymond Knox, State Librarian, South Australia.

Prowse, Albert Richard Graeme, First Assistant Secretary, Australian Treasury, Canberra.

Rendell, Clive Henry, Accountant, Department of Lands, Queensland.

Ross, Alan Alexander, Deputy Director-General, Department of Primary Industries, Queensland.

Roe, Geoffrey Palmer, Acting Director of Lands and Chairman, South-Eastern Drainage Board, South Australia.

Rush, Douglas Bartlett, Secretary, Department of Mines, South Australia.

Rutherford, John Gainford, Insurance Commissioner and State Actuary, Queens­ land.

Ryan, Sidney Laurence, State Librarian, Queensland.

Sewell, John Allan, Auditor-General, Queensland.

Sexton, Maurice Crossley, General Manager, Totalizator Agency Board, South Australia.

Sheehy, Ralph Thomas, Chief Accountant, Department of Railways, Queensland.

Stockley, Murray Lawson, Commissioner, South Australian Railways.

Trumble, Hugh Peter Christian, Assistant Director, Administration and Finance, Department of Agriculture, South Australia.

Walker, Alexander John Kerry, Acting Director of Agriculture, South Australia.

Weinert, Ronald Milton, Executive Officer, South-Eastern Drainage Board, South Australia.

White, Richard Montgomery, Teacher on Secondment, Research and Curriculum Branch, Department of Education, Queensland.

Whitrod, Raymond Wells, Commissioner of Police, Queensland.

211

INDEX TO REPORT

Aborigines, E xpenditure on A cknowledgments . ,

Advance grants— M ethod of determ ination Recomm ended, 1975-76

Agriculture . . . . . . . .

Alcoholic drinks, Expenditure per head of population o n .................................................................................

Allowances for special difficulties . . . .

A m endm ents to State tax rates and conditions affect­ ing 1973-74 .............................................................

A ppearances, M eetings a n d ........................................

Applications fo r special grants . . . . .

A ppointm ent of m em bers of Comm ission . . .

A rt galleries, libraries, museums and other cultural activities . . . . . . . .

Assessed needs of claim ant States . . . .

A ustralian G overnm ent assistance . . . .

A ustralian G overnm ent payments to States for specific capital purposes . . . . . .

A ustralian G overnm ent payments to States for revenue purposes . . . . . . . .

A ustralian G overnm ent revenue paym ents . . .

A ustralian Schools Commission, Interim Comm ittee for . . . . . . . . .

A ustralian T reasury submissions— Budget modifications . . . . .

C om pletion grants and assessed needs . .

Land revenues . . . . . . .

Mining r o y a l t i e s ..................................................

Pay-roll tax . . . . . . .

Social services expenditure . . . .

Specific purpose grants, Treatm ent of . .

State taxation . . . . . . .

Superannuation . . . . . . .

Average earnings, A nnual increase . . . .

Average weekly earnings per employed male unit . Bank debits, A nnual v a r i a t i o n ........................................

Basic and minim um wages, Federal and State,

m etropolitan a r e a s ..................................................

Budget comparisons . . . . . .

Budget results o f the States— F or 1971-72 to 1973-74 ........................................

For 1973-74 and 1974-75 ........................................

New South Wales . . . . . .

Queensland . . . . . . .

Since 1955-56 ............................................................

South A ustralia . . . . . .

Tasm ania . . . . . . .

Victoria . . . . . . . . |

Western A ustralia . . . . . .

Building activity, Annual variation . . . .

Building m aintenance . . . . . .

Business undertakings— Assessed needs of claim ant States . . .

Country water supplies, sewerage, irrigation and drainage . . . . . . .

Page Paragraph

77-79 4.142-4.146

110 6.1-6.4

39-40, 43 3.15-3.17, 3.32

3-4, 7-8, 108-10 9 1.1-1.6,

1.20-1.21, 5.29-5.32

95-97 4.202-4.205

12, 134 2.15, C.24

72, 73-74, 74-75 4.113, 4.118-4.121, 75-77, 77 4.124-4.128, 4.131­

4.137, 4.140-4.141

173-179 G.6-G.35

208-209 —

3-4, 29, 44 1.1-1.6, 2.59, 4.1

1-2 —

74-75 4.124-4.128

36-39, 98-107 3.11-3.14. 5.3-5.25 19-32, 106 2.36-2.62, 5.22-5.24

19 2.36

20 2.37-2.39

22-23 —

63-66 4.81-4.91

52, 54, 55, 56 4.41, 4.50, 4.56,

4.58

43 3.30

53, 54, 56 4.46, 4.50-4.51,

4.58

56 4.60

52 4.41

75, 77 4.127. 4.138

63 4.83

47. 48, 49, 51, 4.17, 4.20, 4.27,

52. 54 4.35, 4.41. 4.50

94 4.200

145 —

11, 131 2.11, C. 18

147 —

114

98, 157-159 5.1, F.1-F.6

159-172 F.7-F.43

32-33 2.63

159-162 F.7-F. 12

164-166 ! F.20-F.26

149 —

166-168 F.27-F.32

170-172 F.39-F.43

162-164 F.13-F.19

168-170 F.33-F.38

146 —

77 4.140-4.141

104-105 5.17-5.19

82-84. 105, 4.161-4.165, 5.19,

199-201 H.25-H.31

212

I ndex to R eport— continued

Page Paragraph

Electricity ............................................................ 104, 203-205 5.18, H.38-H.43

F o r e s t r y ...................................................................... 104, 205-206 5.18, H.44-H.50

G eneral approach . . . . . . 79-80 4.147-4.153

H a r b o u r s ...................................................................... 104, 201-203 5.18, H.32-H.37

Housing ...................................................................... 104, 206-207 5.18, H.51-H.56

Im pact on State budgetary accounts . . . 79-80, 191-207 4.149-4.153,

H .1-H.56

M etropolitan w ater supplies, sewerage and drain-a g e ...................................................................... 104, 198-199 5.18, H.21-H.24

M o d i f i c a t i o n s ............................................................ 80-82, 82-83, 4.155-4.160, 4.162-

104 4.164, 5.18

R a i l w a y s ...................................................................... 80-82, 104-105, 4.154-4.160, 5.18-

191-196 5.19, H.2-H.13

Tram w ays and omnibuses . . . . 104-105, 5.18-5.19, H.14-

196-198 H.20

Capital grant, i n t e r e s t - f r e e ........................................ 21 2.42

Cash benefits from public authorities . . . 12. 132 2.12, C.20

Casino tax . . . . . . . . 179, 189 G.33

Colleges of advanced education . . . . 60. 62, 72 4.72-4.73, 4.77

4.115-4.116

Community welfare payments . . . . .

Completion grants—-

69 4.102, 4.104-4.106

G rant and assessed need . . . . . 41-43 3.24-3.31, 3.33

M ethod of determ ination . . . . . 3-5, 36-40, 1.1-1.13, 3.11-3.17,

41-43 3.24-3.31

Recomm ended for 1973-74 . . . . 3, 107-108 1.1-1.4, 5.26-5.28

Concessional fares, State transport undertakings . 101-102, 191, 5.9-5.11, H.3,

196-198 Η. 14-H.20

Consumer price index, A nnual increase . . .

Country w ater supplies, sewerage, irrigation and 145 —

drainage, Finances of . . . . . . 82-84, 199-201 4.161-4.165, H.25-

H.31

Debt charges— G eneral approach . . . . . . 84-85 4.166-4.169

Unrecouped . . . . . . . 17-18. 85 2.26-2.30, 4.170

Deficits published, of the States, since 1955-56 . . D eterm ination of special grants— 149 Advance grant, 1975-76 ........................................ 3-4. 7-8, 1.1-1.3, 1.6, 1.21,

39-40. 43, 3.15-3.17, 3.32,

108-109 5.29-5.32

Completion grants, 1973-74 . . . . 7-8, 36-40, 1.18-1.21,

41-43, 3.11-3.17, 3.24-

107-108 3.31, 5.26-5.28

M ethod of . . . . . . . 36-39, 41-43 3.11-3.14,

3.24-3.33

Standard for . . . . . . . 4. 40-41 1.9, 3.19-3.21

Development and economic growth . . . . 16 2.22-2.23

Development, State, Indexes of . . . . . 143 C.36

Differences among the economies of the States . . 9, 122-143 2.1-2.3, C.1-C.36

Earnings, Average weekly and annual variation . . Economic and production data— principal items— 11-12, 131 2.11, C.18

A ustralia . . . . . . . . 112-113 —

New South W a l e s .................................................. 116 —

Queensland . . . . . . . 118 —

South A ustralia . . . . . . 119 —

Tasm ania . . . . . . . . 121 —

V i c t o r i a ..................................................................... 117 —

W estern Australia . . . . . . 120 —

Education expenditure . . . . . . 69-72, 102-104 4.107-4.113,

5.13-5.16

Electricity undertakings, Finances of . . . . 80, 203-205 4.151-4.152,

H.38-H.43

Eligible population basis— social services expenditure . 67 4.97

Employment . . . . . . . . 124-125 C.6-C.9

Entertainments taxation . . . . . . 176, 185 G. 17

Equalisation s t a n d a r d ................................................. 40-41 3.19-3.21

213

I ndex to R eport— continued

Page Paragraph

Expenditure needs, Assessment of . . . . 36-39. 99-100, 3.11-3.14, 5.4,

101-106, 107 5.8-5.21, 5.25

Expenditure, o t h e r ............................................................ 85-97, 4.170-4.205,

105-106 5.20-5.21

Factories, statistics . . . . . . . 130 C.16

Fares, concessional . . . . . . . 101-102, 191 5.9-5.11, H.3,

196-198 H .14-H.20

Farm income . . . . . . . . 125-127 C.10

Final budget results of claimant States as affected by special grants . . . . . . . 150 —

Financial assistance g r a n t s ........................................ 21-24 2.42

Financial assistance paym ents to the States . . 9, 20, 26-27 2.2-2.3, 2.37-2.39,

2 49-2 54

Financial need, Assessment o f ......................................... 36-39 3.11-3.14

Financial need, Principle o f ........................................ 36 3.9-3.10

Fines, Revenue from . . . . . . 102 5.12

Flood victims appeal, Queensland . . . . 92-93 4.193-4.194

Forecasting m argin . . . . . . . 39-40, 43 3.15, 3.32

Forestry . . . . . . . . . 104-105, 191, 5.18, H .l, H .44-H.50

205-206

Gambling, Taxes on . . . . . . . 47-51 4.15-4.37

Gaols . . . . . . . . . 77 4.138-4.139

G eneral approach— Business undertakings . . . . . 79-80 4.147-4.153

Debt charges . . . . . . . 84-85 4.166-4.169

Social services . . . . . . . 66-69 4.94-4.100

Taxation . . . . . . . . 44-45 4.4-4.5

G eneral revenue grants . . . . . . 20-24 2.37-2.42

G eneral revenue payments other than special grants . 30-32, 106 2.61-2.62, 5.22-

5.24

G ift d u t y ................................................................................ 46 4.13

G rants Commission— Application for financial assistance by local

governing bodies . . . . . . 34-35 3.1, 3.4-3.6

Applications for financial assistance by State governm ents . . . . . . . 34 3.1-3.3

G rants Commission Act, 1973-1975 — Functions of Commission . . . . . 34 3.2. 3.4

Definition of special assistance . . . . 34. 35 3.3. 3.5

Gross loan expenditure— all States . . . . j 16 2.23-2.25

H arbour undertakings, Finances of . . . . j 80, 104-105 4.151, 5.18, F.10,

I 161. 164. F.19, F.30,

166-168, 201-203 H .32-H.37

Health . . . . . . . . . 62 | 4.78-4.79

Hospitals— I

Expenditure . . . . . . . j 75-76 4.129-4.134

Hospitals and nursing homes . . . . 1 13-16, 140-142 1 2.20, C.34

M edibank . . . . . . . 6 6 4.92-4.93

Housing . . . . . . . . . i 206-207 H .51-H.56

Impact of State business undertakings on State

budgets— Country w ater supplies, sewerage, irrigation and drainage . . . . . . .

Electricity . . . . . . .

82-84, 166-168 199-201 80. 203-205

F o r e s t r y ...................................................................... 104-105. 205-206

H a r b o u r s ...................................................................... ! 80, 201-203

H o u s i n g ......................................................................i 80. 206-207 I

M etropolitan water supplies, sewerage and drain-

4.161-4.165, F.30, H .25-H .31 4.151-4.152, H.38- H.43

5.18, H.44-H.50 4.151, H.32-H.37 4.151. H.51-H.56

age

Railways

Tramways and omnibuses .

166-168, 198-199 80. 104-105, j

12-16, 80-82, 104-105, 191-196 80, 196-198

4.151, 5.18, F.30. H.21-H.24 2.16-2.20, 4.154­ 4.160, 5.18-5.19,

H.2-H.13 4.151, H.14-H.20

214

I ndex to R eport— continued

Page

I n c o m e .................................................. 11-12, 125-127,

Income statistics . . . .

130-132 126, 129-130,

Industrial production, Australia .

145 113

Industrial structure . . . . 10-11

Inequalities among the States— Population and labour force . 10, 122-125

Industrial structure . . . 10-11, 125-130

Levels of personal income . 11-12, 130-132

Private sector expenditure . . 12, 132-135

Railway operations . . . 12-13, 135-140

Social services . . . . 13-16. 140-142

State developm ent . . . 16, 143

Instalm ent credit, finance companies . 147

Instalment credit for retail sales . 12, 134

24, 159 Interest-free capital grants . . supplies, Irrigation and drainage, country water sewerage . . . . . . 82-84, 199-201

Labour force . . . . . 10, 124-125

Land taxation and revenue . . 52-56, 100-101,

Land valuation, Engagement of consultant

174-175, 176, 177-178, 184 52-53. 55

Legal aid . . . . . 69

Libraries, museums, art galleries and activities . . . . .

other cultural

74-75

Licences, n.e.i. and all other taxation 45, 100-101.

Licensing Fund, Victoria . .

173 93

Liquor taxation . . . . 46-47, 100-101.

Loan Council borrowing programs 1974-75 175, 178, 185 18-19, 206

Loan expenditure, gross, all States . 16

Local value of production . . 11. 127-128

Lottery taxation and revenue . . 49-51, 100-101,

M edibank . . . . . .

157, 173, 188 66

Meetings of Commission and appearances . 208-209

Method of calculating special grants . 36-39, 41-43,

M etropolitan transport, Finances of .

98-100

80, 157, 161,

M etropolitan water supplies, sewerage undertakings. Finances of . .

and drainage

196-198

82-84,

Minimum wage . . . .

166-168, 198 114

Mining royalties . . . . 56-58. 159-161,

Miscellaneous revenue and expenditure

162, 164, 168-170, 203 85-97

Modifications to budgetary accounts— Basis of . . . . . 41

G eneral approach . . . * ‘ 69, 98-100 Claim ant and standard States . 51-52, 69, 89, Queensland

90. 93

69, 82, 90,

South Australia . . .

90-91 69, 81-82

Motor taxation . . . . 45. 101, 174,

M otor vehicles on register

178, 180 12, 133-134 [

Museums, libraries, art galleries and activities . . . . .

other cultural

74-75

Paragraph

2.10-2.12, C.10, C.17-C.20

2.8-2.9

2.4-2.7, C.2-C.8 2.8-2.9, C.9-C.16 2.10-2.12, C.17-C.20 2.13-2.15, C.21-C.24

2.16-2.18, C.25-C.30 2.19-2.20, C.31-C.35 2.22, C.36

2.15, C.23 2.42, F.7

4.161-4.165, H .25-H .31 2A-2.7, C.7-C.9 4.43-4.59, 5.5, G.9-

G.10, G.16, G.24, G.28 4.43-4.44, 4.55 4.103

4.124- 4.128

4.5, 5.5, G.2-G.3, G.5 4.196 4.14, 5.5, G .l l , G.25

2.31-2.35, H .5 1 2.23-2.25 2.9, C.11-C.14 4.26-4.33, 5.5, F .l,

G.2-G.3 4.92-4.93

3.9-3.14, 3.24-3.33, 5.3-5.4 4.151, F .l, F.10, H.14-H.20

4.161-4.165, F.30, H.21-H.24

4.60-4.66, F.9, F.16, F.23, F.35. H.39

4.170-4.205

3.22-3.23

4.101-4.106, 5.2-5 4 4.38-4.42, 4.102­ 4.103, 4.178-4.181, 4.184, 4.195-4.196 4.104-4.105. 4.160,

4.183, 4.185-4.187 4.106. 4.156-4.159 4.5, 5.6, G.7, G.27, G.32

2.15, C.22

4.124- 4.128

215

I ndex to R eport— continued

Page

Needs, Assessed - · · · 1 '

N on-tax revenue, territorial and all other . . ■

Off-course betting, Taxation on · ■ · ·

O m budsm an, price control and consum er affairs . O ther expenditure . · · · ■ · , ·

Payments by the A ustralian G overnm ent to or tor

the States ............................................................

Pay-roll tax— Assessed needs . . · · · · ·

Rebates . . · · · ■ · ·

State rates .......................................................................

Tax on salaries and wages of State G overnm ent e m p l o y e e s ............................................................

Transfer to the S t a t e s .........................................

Pensioners— Concessional f a r e s ..................................................

Percentage of State population . ■ · ·

Per capita (total population) basis, Social services expenditure . · · · · · ;

Personal consum ption expenditure per head ot

population . ■ · · · · ·

Personal income per head of population . · ·

Personal incom e tax payable per head of population Poker machine t a x .............................................................

Police . . · · ■ · · · ·

P o p u l a t i o n ......................................................................

Population, ‘eligible’ ............................................................

Price index, Consumer . ■ · · · ·

Price control, consum er affairs and om budsm an . -Principle of financial n e e d ...................................................

Private sector e x p e n d i t u r e .........................................

Probate duties ............................................................

Production, Industrial, A ustralia · · · ·

Production, local value of . · · · ·

Production, prim ary industries— A ustralia . . · · · · · ·

C laim ant States . · · · · ·

N on-claim ant States .........................................

Public authorities, Cash benefits from . . .

Public debt— Take-over of existing State debt . . . .

U nrecouped debt charges . . . . .

Public hospitals, utilisation of . . . .

Racing t a x a t i o n ............................................................

36-39, 98-107 101 48-49 85-88, 105-106

105-106

19-20

101, 173 51-52 175, 176, 178, 179, 190

91-92 25-26

101-102, 191, 196-198 10, 142

67

12, 132-133 11-12, 130-132 11-12, 131-132 47-48, 100-101,

173, 175, 188 76-77 10, 122-125 67

145

85-88, 105-106 4-5, 36 12 45, 173, 174.

175, 177, 181 113 11, 127

112, 127-128 118-119 116-117, 120-121 12, 132

21-24 17-18, 85 11, 140-142 48-49, 176,

186-187

Railways— D epreciation . · ■ -

Finances, im pact on State budgets

Statistics of operation .

Recomm endations of Commission

80-82

12-13, 80-82, 161, 162, 164-166, 166-168, 170, 170-172,

191-196 12-13, 135-140, 191, 195-196 43, 107-109

Registration of new m otor vehicles . . .

Retail sales of goods . . · · ·

Annual v a r i a t i o n ........................................

Instalm ent credit for . . . .

Revenue assistance arrangem ents— Additional A ustralian G overnment assistance

146

145

12, 134

26-27

216

Paragraph

3.11-3.14, 5.3-5.25 5.7 4.22-4.25 4.172, 5.21

5.20-5.21

2.36-2.39

5.6, G.2-G.3 4.38-4.42 G.13, G.19, G .26, G .30-G .31, G.35

4.188-4.192 2.45-2.47

5.9-5.11, H.3, H.14-H.20 2.7, C.35

4.96

2.14, C.21

2.10-2.12, C. 17, C. 19 2.11. C.19 4.15-4.21, 5.5, G.2-G.3, G. 12

4.136-4.137 2.4-2.7, C.2-C.9 4.97

4.172, 5.21 1.10, 3.9-3.10 2.13-2.15 4.6-4.9, G .2-G.3. G .8,

G.14, G.20-G.22

2.9, C .l l

C.13

2.12, C.20

2.42

2.26-2.30, 4.170 2.10, C.34 4.22-4.25, G.18

4.154-4.160 2.16-2.18, 4.154­ 4.160, F.10, F.17, F.24, F.30, F.36,

F.41, H.2-H.13

2.16-2.18, C.25-C.30, H .l. H.13 3.32-3.33, 5.26-5.32

2.15, C.23

2.48-2.54

I ndex to R eport— continued

Page Paragraph

Financial assistance grants . . . . 21 2.42

Interest-free capital g r a n t ........................................ 24 2.42

New arrangem ents from July 1975 . . . 28-29 2.58

O ther revenue arrangements . . . . 24 2.42

Take-over of existing State debt . . . 21-24 2.42

Revenue needs, Assessment of . . . . . 36-39 3.11-3.14

Revenue, other . . . . . . . 85-97, 101 4.170-4.205, 5.7

Road finances . . . . . . . . 60-61 4.74

R o y a l t i e s ................................................................................ 56-58, 159-162,

164, 168, 203 4.60-4.66, F.9-F.16, F.23, F.35, H.39

Rural holdings by State and type of activity . 96 —

Rural holdings, size of . . . . 11,128 2.9, C.15

Savings Bank deposits— Annual increase . . . 146 —

Schools— Enrolm ents . . . . . . . 13, 140 2.19, C.31-C.33

G rants by Schools Commission . . . . 63-66 4.81-4.91

Medical and dental services . . . . 74 4.123

Shepparton Preserving Co. Ltd. Victoria . 93 4.195

Social services—· Assessed needs of claimant States . . . 102-104 5.11-5.16

Expenditure— Aborigines . . . . 77-79 4.142-4.146

Building m a i n t e n a n c e ........................................ 77 4.140-4.141

Education . . . . . 69-72 4.107-4.116

Gaols . . . 77 4.138-4.139

Hospitals . . . . 75-76 4.129-4.134

Libraries, museums, art galleries and other cultural activities . . 74-75 4.124-4.128

P o l i c e .................................................. 76-77 4.136-4.137

School medical and dental services . . 74 4.123

T ransport of school children . . . . 73-74 4.117-4.122

South A ustralia, withdrawal from claimancy . . 3 1.4

South-Eastern D rainage Board . 82-84 4.162-4.165

Special difficulties a l l o w a n c e s ........................................ 72, 73-74,

74-75, 75-77 4.113, 4.118-4.121, 4.124-4.128, 4.131, 4.137, 4.140-4.141

Special grants— Advance g r a n t s .................................................. 3-4. 6 , 7-8,

108-109

1.1-1.6, 1.17, 1.2 0 -1.2 1 , 5.29-5.32

Applications for 3-4, 29, 34 1.1-1.6, 2.59,

3.1-3.3

Completion g r a n t s .................................................. 41-43, 107-108,

109

3.24-3.33, 5.26-5.28, 5.32

D eterm ination of amounts recommended . . 38, 39-40,

108-109

3.13, 3.15-3.17, 5.29-5.32

Determ ination of the standard for calculating 4-5, 40-41 1.8-1.12, 3.19-3.21

Paid since 1955-56 and effect on final results of claim ant States 151

Procedure for determination of . . . . 7-8, 38, 39-40,

108-109

1.18-1.21, 3.13, 3.15-3.18, 5.29-5.32

Recommended for 1973-74 . . . . 3-4, 107-108,

109

1.1-1.6 ,

5.26-5.28, 5.32

Special grants and general revenue payments . 6 . 30-32,

106-107

1.17, 2.61-2.62, 5.26-5.28

Specific purpose payments by Australian G overn­ ment— D eduction approach . 59. 61-62 4.70. 4.75-4.79

Exclusion approach . . 59, 60-61 4.70. 4.71-4.74

Inclusion approach . 59. 62-63 4.70, 4.80

Treatm ent of . 58-66 4.67-4.93

Stamp duties, changes in rates . . . . . 173, 175-176,

177, 182-183

G.3, G.15, G.23

Stamp duties on— Insurance other than life insurance . . . 46 4.10-4.11

217

I ndex to R eport— continued

Leases . . . . . .

State developm ent expenditure . . .

State governm ent employees . . .

State receipts duty . . . . .

State taxation— A m endm ents to rates and conditions ;

1973-74 ..................................................

G eneral approach . . . .

Liquor . . . . . .

Needs— Queensland and South A ustralia Other . . . . . .

Rates charged in the States . .

Stamp d u t i e s ........................................

Statutory corporation paym ents . .

Subsidies for rural electricity extensions . Succession d u t i e s ........................................

Superannuation . . . . . .

Surpluses and deficits of the States since 1955-56 Surpluses, U nused net standard . .

Take-over of existing State debt .

Tasmania, w ithdrawal from claimancy Tasm anian railways, T ransfer of .

Taxation . . . . . .

A m endments to rates . . .

Casino . . . . .

Entertainm ents . . . .

Gambling . . . .

G ift duty . . . . .

Im pact on State budgetary accounts

Land

Licences, n.e.i. and all other Liquor . . . .

Lottery revenue

M otor . .

Needs . .

Oif-course betting Pay-roll . .

Poker machine

Probate .

Racing

Rates imposed in the States .

Stamp duties . . . .

State collections . . .

Technical education, Expenditure on Territorial and other non-tax revenue

Page Paragraph

46 4.12

16, 143 2.22-2.23, C.36

10, 125 2.6, C .8

24-25 2.44

173-179

!

G.6-G.35

44-45 4.4-4.5

46-47 4.14

173 G.1-G.3

44-52 4.4-4.42

173, 180-190 G.4

46 4.10-4.12

178, 189, 203, G.29, H.39, H.41,

204, 205 H.43

203, 204-205 H.38, H.40, H.43

45-46, 173, 4.6-4.9, G.2-G.3,

177, 181 G.20-G.22

93-95, 4.197-4.201, 5.21

105-106 149 —

7, 41-43, 108 1.18, 3.24-3.31, 5.28 21-24 2.42

3, 27 1.5, 2.53

28 2.57

173-179 G.6-G.35

179, 189 G.33

100-101, 176. 5.5-5.6 , G.17

185 47-51 4.15-4.37

46 4.13

157-161, 162, F.2, F.9, F.15, F.22, 164. 166. F.29, F.35, F.41

168-170, 170-172 52-56,100-101, 4.43-4.59, 5.5. 174-175, 176, G.9-G.10, G.16, 177-178, 184 G.24. G.28

45, 100-101, 173 4.5. 5.5, G.2-G.3, G.5 46-47, 100-101. 4.14, 5.5. G .l l , G.25 175, 178, 185 49-50, 100-101, 4.26-4.33, 5.5, G.2-

173, 188 G.3

174, 178, 180 G.7, G.27, G.32

100-101, 173 5..5-5.6, G.1-G.3 47, 48-49 4.15, 4.22-4.25

51-52, 91-92, 4.38-4.42, 4.188-100-101, 173, 4.192, 5.5, G.2-G.3, G. 13, G.19, G.26, 175, 176, 178, 179, 190 G.30, G .3 1, G.35

4.15-4.18. 4.34.

173, 175, 188 4.37, 5.5, G.2-G.3,

G.12

45, 100-101, 173, 4.6-4.9, 5.5, G.2-G.3, 174, 175, 177, <3.8, G. 14, G.20-G.22 181 47, 48-49, 4.18, 4.22-4.25, 5.5,

100-101, 176, G.18

186-187 173, 180-190 G.4

173, 175, 177, G.3, G.15, G.23

182-183 154-156 —

102-103 5.13

101 5.7

218

I ndex to R eport— continued

Tertiary education, Take-over of financial respon­ sibility by the A ustralian G overnm ent . .

Third party insurance . . . . . .

Tobacco tax . . . . . . . .

Tramways and omnibus undertakings, Finances of . Transfer of non-m etropolitan railways, South A us­ tralia . . . . . . . .

Transfer of T asm anian railways . . . .

Transport of school children . . . . .

Transport of school children concessions . . .

Treatm ent of A ustralian G overnm ent specific purpose paym ents . . . . . . . .

Tuberculosis . . . . . . . .

Two-part system . . . . . . .

U nit of use— social services expenditure . . .

Universities . . . . . . . .

Unused net standard s u r p l u s e s ........................................

U tilisation of public hospitals . . . . .

Wages— Basic and minim um wages . . . .

Federal and State, m etropolitan areas . . .

W ater supplies, sewerage, irrigation and drainage finances— C ountry . . . . . . . .

M etropolitan . . . . . . .

Witnesses, List of . . . . . . .

Page Paragraph

26-27, 72 2.51-2.52, 4.115

173 G.3

179, 190 G.34

80, 196-198 4.151, H .14-H.20

3, 27 1.4, 2.55

28 2.57

73-74 4.117-4.122

101-102 5.9-5.10

58-66 4.67-4.93

62 4.78

7. 39-40 1.20, 3.15-3.18

68 4.98

61, 103 4.76, 5.14

7, 41-43, 108 1.18, 3.24-3.31, 5.28 13-16, 140-141 2.20, C.34

114 114 —

82-84, 105, 4.161-4.165, 5.19,

199-201 H.25-H.31

80, 104-105, 4.151, 5.17-5.18,

198-199 H.21-H.24

210-211 —

219