A new federation: tollways, tax and fixing the fiscal imbalance


2014-10-28_15-02-19

As the Prime Minister kickstarts debate, experts and former politicians from both sides of the divide offer their road maps for reforming the federation in a new CEDA report.

Australia should consider bolstering the GST, giving the states a portion of income tax and extending the use of tollways on city roads to help overcome the vertical fiscal imbalance, argues a report on the federation released today by the Committee for the Economic Development of Australia.

The alternative, it says, is expanding the rollout of activity-based funding in health, education and welfare policy.

The report comes as Prime Minister Tony Abbott declared in a speech on Saturday that “a century of encroachment has left the Commonwealth financially responsible for vast services that it doesn’t actually deliver and can’t control”.

A Federation for the 21st Century also recommends instituting a series of federation conventions in the lead-up to next year’s white paper, so as to broaden public interest and input into reform, as well as increasing transparency in the Council of Australian Governments and creating a new “Federation Reform Council” to take the place of the recently abolished COAG Reform Council.

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