Grewal, Bhajan ORCID: 0000-0003-2977-1071 (1995) Vertical Fiscal Imbalance in Australia: A Problem for Tax Structure, not for Revenue Sharing. Working Paper. Victoria University, Melbourne, Australia.

Abstract

It is argued in this paper that vertical fiscal imbalance remains a serious problem for Australian federation. The paper shows that although by conventional measures vertical fiscal imbalance may have improved in recent years, judging by its impact on the States' tax structure it is clear that the situation has deteriorated. The unhappy legacy of revenue sharing arrangements over the past fifty years is discussed and it is shown that, despite numerous alterations in these arrangements, revenue sharing has failed as a solution for the problem of fiscal imbalance, and has resulted in loss of accountability and responsibility in government, and in institutional waste. The States' struggle for access to the field of income tax since the 1950s is outlined and the perceived impediments to such an access are considered in the light of the 1991 report of the Commonwealth-State officers' working party on tax powers.

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