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Wednesday, 20 September 1972
Page: 1005

The PRESIDENT - Senator Cotton,you will recollect that for reasons which are pertinent to the President I requested that matter sought to be incorporated in Hansard be handed to the President before leave would be given. As a matter of form, may T see the document?

Senator COTTON - You will see that it is difficult to read out.

The PRESIDENT - Is leave granted? here being no objection, leave is granted. (The document read as follows) -


Senator COTTON - Turning to the details of the Bill, clauses 1 and 2 are of a purely machinery nature. Clause 3 authorises the first 2 of the 3 forms of additional grants agreed to at the Premiers Conference - that is, the additional grants of $112m to be divided between all the States and the additional per capita grants to New South Wales and Victoria. The clause takes the form of an amendment to section 7 of the present Act. This section authorises the 'formula' grants, which constitute the main body of the grants payable under the Act. lt provides that the formula' grants payable to each State in each year shall be calculated by taking the grant paid under the section in the previous year and increasing it in proportion to the increases in the State's population and in average wages in Australia as a whole and by a 'betterment factor' of 1.8 per cent. The payment of these additional grants under this section thus automatically ensures that they will be 'built in' to the formula grants and escalated in future years.

Clause 4 repeals section 8 of the existing Act which authorises additional grants of $2 per capita to New South Wales and Victoria. These grants are to be replaced by the additional grants of $3.50 per capita provided for in clause 3 of the Bill. Clause 5 provides for the payment of an additional temporary grant of S3. 5m to Western Australia in 1972-73 by increasing the additional grant of $6. 5m payable in that year under section 9 of the existing Act to $10m.

The additional grants authorised by this Bill represent the second major permanent revision to the general revenue assistance arrangements settled at the June 1970 Premiers Conference, the other being the transfer of pay-roll tax and accompanying adjustments to the financial assistance grants agreed at the June 1971 Premiers Conference. The arrangements settled in June 1970 themselves represented a very substantial improvement compared with previous arrangements. In addition, over the 2 years 1970-71 and 1971-72 the Commonwealth provided special revenue assistance totalling $115. 5m, the bulk of which was paid for the purpose of assisting the States overcome budgetary difficulties caused by abnormally large increases in wage and sal ary awards. .These excessive wage and salary award increases had the effect of pushing the States finances out of balance. The permanent increases in the grants payable which this Bill seeks to authorise should contribute substantially towards overcoming the financial problems of the States.

Taking into account all the changes in the revenue assistance arrangements that were decided at and since the June 1970 Premiers Conference, it is estimated that in 1 972-73 the States will receive over $420m more in Commonwealth general revenue assistance than they would" have received had the arrangements which existed before 1970-71 continued unchanged: I commend the Bill to the Senate.

Debate (on motion by Senator O'Byrne) adjourned.

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