Inquiry into Commonwealth payments to Victoria

On 28 February 2012, the Legislative Council agreed to the following motion:

That this House —

(1) notes that Australia experiences one of the highest mismatches of expenditure responsibilities and revenue raising capacity (vertical fiscal imbalance) of any federation in the world which means the States are heavily reliant on Commonwealth financial transfers; and

(2) requires the Economy and Infrastructure References Committee to inquire into, consider and report by 30 November 2012 on the level and nature of the following Commonwealth recurrent funding —

(i) National Partnership Payments – time limited funding that is provided for a specific project, program or reform.
(ii) Financial Assistance Grants to Local Government – provided through the state to local governments as general-purpose revenue.
(iii) Commonwealth Own Purpose Expenditure – payments made by the Australian Government in the conduct of its own general government sector activities and includes expenses for the purchase of goods and services and associated transfer payments.
(iv) Direct Outlays – the Commonwealth’s operations or activities undertaken in Victoria.

and in respect of each —

(a) whether the current share of funding Victoria is receiving is satisfactory relative to its population share and its contribution to the Australian economy, and the extent and nature of changes in that share over time;
(b) whether the adequacy of Victoria’s share varies across each of the different areas of government service delivery and economic activity;
(c) if the requirements imposed on funding are reducing the scope for innovation and service delivery efficiencies;
(d) whether the costs of administration and associated reporting under funding agreements are appropriate; and (e) the future of programs at the expiry of funding agreements.