GST billions yet we’re still the basket case

2601 basket case 1 OKBy ERWIN CHLANDA

 

An equal per capita distribution of GST would be the total amount of GST divided by Australia’s population figure.

 

If that were the way it was worked out, the current moaning and gnashing of teeth by the Northern Territory Government over recent losses of GST revenue would turn to apoplectic outrage.

 

Territorians are doing much better than anyone else from the GST, yet that didn’t save us from the present financial fiasco. From calculations by the Commonwealth Grants Commission (CGC) it can be concluded that our need for help with borrowings is, per head of population, more than 100 times greater than that of South Australia.

 

The Federal Treasurer divvies up the GST cake. He gets advice from the CGC which aims at equipping states to provide an “average level of service” while following “average revenue raising policies”.

 

Explains the CGC: “While the NT raises close to the average revenue (per capita), its large GST requirement is due to its very high assessed spending requirement compared to the average.

 

“Conversely, while Western Australia has the second highest spending requirement (per capita), its relatively low GST requirement reflects its much higher than average capacity to raise revenue.”

 

2601 Grants Commission GST table 2

 

CGC data for 2018/19 allow the following calculations: The citizens who are “net givers” to the GST bucket are the Western Australians ($1397 each), New South Welshmen ($400) and Victorians ($32).

 

The “net takers” are Tasmanians ($2056 each), South Australians ($1305), Canberrians ($477), Queenslanders ($274) and – are you sitting down? – Northern Territorians ($8622).

 

That means we get more than twice as much, per capita, as the other “net takers” put together.

 

Who gets what is ultimately decided after a lot of haggling at the Council of Australian Governments (COAG), but by and large what underpins the allocations is Horizontal Fiscal Equalisation (HFE).

 

The CGC gives this example for HFE from the “expenditure requirements” side of the ledger: “The average spending on a remote Indigenous person aged 45 to 64 years is $10,481, whereas the average spending on a similar non-Indigenous person is $1,652.

 

“A State or Territory with more remote Indigenous people will be assessed to have higher spending needs.”

 

On the other end of the scale is “revenue raising capacity” where WA, with its usually massive mining production, tops the list.

 

Applying HFE, the CGC has worked out the Territory needs $2109m more that it can raise for “average level of services”.

 

Explains the CGC: “Two of the main reasons for the redistribution are Indigenous status ($703m) and remoteness and regional costs ($765m).”

 

The first is a worry because more and more people around Australia are declaring themselves as being Indigenous, as Bob Beadman points out. That means while the NT still has, by a country mile, the greatest percentage of Aborigines, it is shrinking.

 

In any case, the sustained swindle by NT governments of either persuasion has been spending on whitefellers the money Canberra is giving us for blackfellers, as Mr Beadman convincingly argues.

 

“States and Territories can use GST revenue for any purpose, that is, it is untied,” says the CGC.

 

Comparisons with other states show the Territory’s parlous position on borrowing.

 

In a table for 2018/19 called “drivers of difference from an equal per capita distribution of GST” (that’s the total of GST divided by the Australian population figure), the CGC calculates “total expense and investment” which include “the impact of net borrowing”.

 

The CGC says, for example, WA needs a top-up of $1908m, SA $187m and Tasmania $400m.

 

The NT needs $2503m.

 

Translate that to a per capita figure and you get $737 for WA, $112 for SA, $759 for Tasmania and a staggering $11,807 for the Northern Territory. That’s 105 times the South Australian figure.

 

 

UPDATE 2.50pm:

 

The CGC has provided the following slightly different figures for the last paragraph which should read: “Translate that to a per capita figure and you get $728 for WA, $108 for SA, $762 for Tasmania and a staggering $10,159 for the Northern Territory. That’s 94 times the South Australian figure.

 

 

 

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13 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Evelyne Roullet
    Posted January 17, 2019 at 1:19 pm

    I agree with you Janet, bandaids government not only is all wrong, but it underlines the paternalistic colonialist ideas.
    This mentality characterises the restriction of the freedom and responsibilities of subordinates or dependants in their supposed interest.
    We look after you doctrine of cultural hierarchy and supremacy, as you are incapable to look after yourselves, we keep you in the gutters and we all have a jobs.

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  2. Janet Brown
    Posted January 17, 2019 at 11:16 am

    Jack, I do not have to walk a mile in anyone’s shoes.
    It is clearly obvious that bandaid government mentality is all wrong.
    What happened to outcomes and audits. Never happened. Throw more money at is the battle cry.
    Regards of the fact that billions of dollars has only exacerbate the problem.
    Money for nothing comes to mind.
    Yet for governments to get that money some of us work hard to pay taxes, fees, levies and so forth. Our borrowings are through the roof. Time for outcome audited funding checks.

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  3. Jack
    Posted January 10, 2019 at 4:47 pm

    Great to see you have all walked a mile in their shoes. Negativity breeds negativity. Where is the positivities of Aboriginal people?

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  4. NW
    Posted January 10, 2019 at 11:23 am

    @ James T Smerk: It’s not just 25 year olds in Sydney (but I get where you’re coming from).
    There are plenty of mixed race people who have grown up in Darwin (often referred to disparagingly in remote areas as “urban blackfellas”) who have probably had nil or minimal exposure to traditional culture.
    They have had the same opportunities and access to other services as other residents.
    As a direct result of their own lifestyle choices, they now cry poor bugger me and exploit special measures employment in the NT Government, business loans, race-specific health services, and sporting teams based on their “colour”.
    South Africa got widely canned for exactly that!
    Meanwhile, those suffering genuine disadvantage get whatever dollars trickle down. The system is broken – assess and fund on real need, not skin colour or a sliver of ancestry.

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  5. Hal Duell
    Posted January 10, 2019 at 8:56 am

    Wow! Deep thanks to Erwin’s paper for publishing all this.
    The incompetence of successive NT governments is laid out for all to see, but so what? They are hardly alone. Look at the US. Look at Europe. Hell, look at the Globalist World in its incompetent entirety.
    Thirty years ago when the USSR’s communist model fell apart, I read an opinion piece somewhere which suggested that if the noise from that collapse (communism) was loud, even louder will be the noise when the other shoe (capitalism) drops.
    This goes to the crux of why I appreciate The Donald. His is the most honest face America could be presenting to the world at this point in time. So look at it closely, and marvel at how we got here.
    And then fasten your seat belt.

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  6. Paul Parker
    Posted January 10, 2019 at 7:22 am

    Steve Brown Re: Posted January 9, 2019 at 5:07 pm “the sloth and dependence created by a truly socialist system, thanks to an over supply of untied, directionless funding.”
    Left out is the gross lack of liability and public accountability provided by Commonwealth to Aboriginal Landrights (NT) corporate owner Land Trusts and their managers the Land Councils.
    No other private corporate land owners are provided funds with such lack of accountability.
    No other private or corporate land owners and managers receive million of dollars providing them assets without leases, without risk of loss.
    The Commonwealth maintains lack of accountability spending million on maintenance and workers, all on this privately owned land without conventional leases.
    The Commonwealth clearly prepared waste public funds directly and indirectly, with its ongoing promotion and protection of racism.
    The Commonwealth needs to amend its ALR(NT) to ensure these corporate land owners hold same rights, must satisfy same responsibilities, face same public accountability, as other Australians and other private landowners.
    The Commonwealth’s racist barriers to accountability for ALR(NT) corporate owners is the main reason these communities are effectively incapable of being self-sustainable.
    Australians voted overwhelmingly in 1967 to remove barriers, particularly government barriers, to equality of opportunity.
    The Commonwealth maintains same barriers today.
    The 1967 referendum was to ensure equality of legal rights and legal responsibility, no more, no less.

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  7. David
    Posted January 9, 2019 at 5:59 pm

    May be some commentators need to ask contractors how they have or will be affected by cuts to spending on bush communities.
    That’s where many have made their dollars and for most, just on travel costs alone.

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  8. Steve Brown
    Posted January 9, 2019 at 5:07 pm

    The clear intention of the extra funding was to allow the NT to bring infrastructure and basic services into some kind of equilibrium with the rest of the country, along with the full expectation that in building that infrastructure we would grow and create an economy capable of contributing to, rather than relying on, the rest of the nation.
    Clearly those funded intentions have had another consequence, instead of assisting the growth of our economy as intended.
    The extra funds have been used to “staff the office”, squandered on water parks sports grounds while desperately needed infrastructure languishes.
    Basic services to communities are actually declining! All this while enormous opportunity across the spectrum of industry that should by now have been contributing to the national economy, is ignored! Ridiculous levels of government are simply suffocating all incentive, making it just to danm hard to operate here.
    The Territory has become the perfect example of the sloth and dependence created by a truly socialist system, thanks to an over supply of untied, directionless funding.
    This quite clearly has also been poorly monitored by the Feds themselves.
    How can we possibly be meeting KPIs while infrastructure and services actually shrinks in some places?
    What about those beautiful new police stations? They cost millions! Now we don’t even bother to staff them!
    Who is taking responsibility for that?
    The Federal Government must tighten up funding into the Territory and put a much greater emphasis on “proven positive outcomes”!
    Forcing responsibility!
    How do we end up killing off entire local industries by allowing and facilitating direct flights into The Rock, for instance?
    It happened because nobody in Government gives a proverbial! How do we pull funding from infrastructure like the Old South Road and the Mereenie Loop in favour of sports grounds and water parks?
    It happens because nobody gives a proverbial!
    How the hell did we ever get into such a place that those in the capital justify and enjoy facilities sports grounds water parks by three, which are free to attend?
    While at the other end of the Territory families are still looking at dirt roads, lousy unsafe water supplies, no facilities, not even a small swimming pool let alone a water park!
    How does a decent human being justify that situation?
    Sure, if we ourselves were actually contributing the dollars we squander upon ourselves … but we are not!
    Time for change, time for a much fairer level of service across the Territory and if we want extra fluffy stuff on top of that, time to pay for it ourselves!

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  9. James T Smerk
    Posted January 9, 2019 at 12:51 pm

    Also if we really do need to supply housing to people wanting to live “on the land” why not bang out a stack of demountable housing?
    They are cheap, say $50,000 as opposed to building a $600,000 standard house which takes four months and they only get two or three per community.
    Everyone has a house and everyone is happy, ordinary repairs come out of royalties or government payment, then they might not get damaged so much. There is a huge saving for the government.

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  10. James T Smerk
    Posted January 9, 2019 at 12:49 pm

    I think they shouldn’t go off the census data but more off birth stats, school records, hospital stats and prison stats.
    Here is where you will identify who really needs the help not the 25 year old living in Sydney that thinks it’s cool or trendy to start claiming when they haven’t lived a moment in the culture. All level of government need to pull their heads out of the sand and sort it out already, the money tap is constantly running on full-bull and only drips are getting to the needy few.

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  11. G Drake
    Posted January 9, 2019 at 11:52 am

    All this money spent with so little to show for it.

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  12. NW
    Posted January 9, 2019 at 11:50 am

    That’s one bloody big Basics Card!
    When we elect people with no relevant experience, skills or knowledge skill to manage such a large budget why should we expect anything different?
    Our political talent pool is officially a dried puddle.
    It’s been a fun 40+ years but time to hand back the responsibility for running the Territory.
    Get rid of (at least) one layer of pollies and departmental duplication.

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  13. Psuedo Guru
    Posted January 9, 2019 at 11:09 am

    Living remotely? Pay for it yourself.

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