Health, education, infrastructure: what goes to the states and territories

By Stephen Easton

Tuesday May 12, 2015

It may be the federal budget, but about a quarter of it — $107.7 billion to be precise — flows to the state and territory governments.

Of that, $50 billion is for specific purposes, made up of $36.4 billion in National Specific Purpose Payments for skills and workforce development, community services, and affordable housing, plus $13.6 billion in National Partnership payments to accomplish specific goals over fixed timeframes.

Health and education get the lion’s share of that specific purposes money; 34.4% and 32.8% respectively. Aged and disability care and other community support services get $2.5 billion, the skills and workforce development funding totals $1.8 billion this financial year, and affordable housing gets $1.9 billion.

State and territory infrastructure gets $6.8 billion in support from the Commonwealth, and $774.9 million will go to supporting environmental management projects — everything from sustainable rural water use to whale and dolphin entanglements.

The vast majority of this financial year’s federal natural disaster relief funding — about $1.39 billion — goes once again to Queensland, to reimburse it for the costs incurred through past incidents like massive floods and successive cyclones.

Other specifically tied grants contribute to projects that come under public order and safety, recreation and culture, or transport and communication.

The other $57.7 billion going out to the provinces is general revenue assistance coming mainly from the GST, which the states and territories can spend on whatever they want. The federal government expects to be able to remit $3 billion more in GST every year over the forward estimates, citing extensions to the Tax Office’s compliance activities and the application of the tax to online purchases from overseas as the main reasons.

But the states also have to pay back the Commonwealth for the administration costs incurred by the Australian Tax Office and Customs in the process of collecting the GST, which comes to just under $680 million for last financial year.

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