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State-Fed Funding: Are the states & territories the meat in the sandwich?

Article (932 words) posted on 07 May 2018 by Rosie Williams

The state and territory governments are at the coalface of all the important social problems faced by Australian society. The states are responsible for education, health, policing, emergency services, public transport, housing and homelessness yet there is comparatively little open data provided by state agencies.

With open data policies and practices varying from jurisdiction to jurisdiction, the need for access to the same data available across all jurisdictions and with similar fields is of particular significance to social questions that rely on this data for a solution.

Most open financial data is published by Commonwealth agencies. By comparison, the states have been very slow to open their budgets, tenders and grants data which means that most data on state funding actually comes form the Commonwealth budget.

The states are not backwards in coming forwards about how much of their budget comes not from their own revenue raising activities, but from the federal government. This is because the Commonwealth government took over the right to raise revenue during the WWII and left the states with very limited legal ways they can fund their expenditure.

This is why the states are so addicted to sources of revenue based around individual consumption (eg gambling/GST) - because they are prohibited from collecting income tax. Coupled with the policy goals placed on states by the federal government it becomes easy to see how the states might feel like the meat in the sandwich.

Its summarised in the NCOA report.

According to the Commonwealth government, at least half of state budgets are supplied by the Commonwealth. Far from being their own fiefdoms, quite a bit of funding the states receive is received through National Partnership Agreements which require the state governments to collect National Minimum Datasets in the process of meeting agreed indicators (many based interestingly, on SEIFA data).

These agreements cover just the kind of social challenges (domestic violence, health, housing, Indigenous welfare) that are commonly identified as in want of more open, comprehensive and better quality data to address.

These programs are funded jointly with the Commonwealth's contribution documented in the following programs:

General Revenue Assistance (GST to you and me) is untied money that the states can spend at will and constitutes the biggest program in the Commonwealth budget coming in at over $70 Billion or 12% of the entire federal budget.

Together, the other Treasury programs going to the states make up $36 Billion dollars which, all up, accounts for nearly $100 Billion dollars or a quarter of the entire Commonwealth budget spend.

You can find more information on the Commonwealth budget at my budget explorer, just click on the in the menu and then select from the following options: