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The Forum > Article Comments > Some Labor states would rather rob the poor > Comments

Some Labor states would rather rob the poor : Comments

By Saul Eslake, published 21/3/2006

How odd that the Labor governments of NSW and Victoria should baulk at handing over some of their riches to poorer states.

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Yes ,and some Labor states like Tasmania have used the GST to create bloated bureaucracies that add nothing to private productivity or services to the public.

When the resources bubble bursts,so will Australia's present prosperity.Time to cut Govt waste and taxes.
Posted by Arjay, Tuesday, 21 March 2006 9:17:15 PM
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All this argument just goes to show it makes little sense to live in NSW, let alone Sydney, where you need to be in the highest personal income tax bracket, to enjoy a lifestyle equal to those paying less than half the tax elsewhere.

When one also considers the various vertical equalisation schemes in recent abundance, I guess the government is trying to move us all out to less populated areas, no longer wants us to marry or even reproduce.
Posted by Seeker, Tuesday, 21 March 2006 11:12:33 PM
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Non-GM farmer makes a good point – we have got to expect complaints from Labor politicians in NSW and Victoria, as they have a vested interest in not divulging wealth beyond their constituency. It is the Federal Government’s role and the Grants Commision’ s role to hear their arguments and weigh them up against opposing arguments.

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I like the idea of a separate state for north Queensland – Capricornia – but I can’t see the advantage in it.

Perseus pushes this idea of new states, with the prime motive of better services and quality of life for regional people. This is an honourable motive. But…

“The metropolitan states will gain certainty that the money allocated to the new regional states by the Commonwealth will actually be spent there.”

It seems to me, with past or current residence in regional north Queensland, central Qld and WA, that funding is spent pretty well equally, on a per-capita basis, in regional and metropolitan areas. So I can’t see that getting certainty that monies will be spent in smaller areas (new states) would be significant. I can’t see that regional states would necessarily help rural people.

“The delivery of services to the regions from new state capitals will eliminate many of the costs that are currently incurred by trying to deliver the same services from a distant metropolitan capital.”

But new states would require the duplication of bureaucracy and service infrastructure, which would pretty well cancel out any current inefficiencies inherent in distant administration.

"The overheads and congestion based inefficiencies involved with service delivery from greenfield sites in the regional state capitals will be much lower than the overheads and congestion costs currently incurred in metropolitan based service delivery."

Would they? What about the costs of setting up those services? What about less efficient economies of scale for smaller operations?

Quality of life in NQ for example is on par with SEQ, as is life in Mt Isa, Hughenden or Riversleigh station and in the coastal cities. I am inclined to feel that the very notion of an underprivileged rural sector is flawed.
Posted by Ludwig, Tuesday, 21 March 2006 11:12:37 PM
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Scrap the G S T. Problem solved
Posted by aspro, Wednesday, 22 March 2006 12:09:00 AM
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Saul, you underline a couple of points that concern me, but appear to shrug them off at the same time.

>>I would readily acknowledge that the 'transparency' objective has become lost in the mists of time<<

Does this not raise a critical problem that we - and pretty well every government in a Western democracy - have yet to come to grips with? That there seems to be no mechanism whatsoever to regularly assess whether a particular law or government practice has outlived its usefulness?

There should be a mandatory sunset clause on every financial initiative, one that recognizes that governments so quickly rely upon the revenue streams available to them, that they lose sight of both the original objective, and also the reasons behind the terms of the agreement in the first place.

In this particular case, it is not the need for some form of equalization that concerns me - it is always possible for relative disadvantage to be cited, witness the phalanx of charities and beggars that clutters every city pavement - but the obligatory manipulation of the rules that immediately follows any settlement. And then continues, even after the rules lose their relevance.

You state that the objective is that "State governments [should] provide (or, at least, to finance the provision of) 'core' public services such as education, health, law & order, and public transport"

- which sort-of assumes that this is the destination of the funds "equalized" from rich to poor.

But if a State decides that it doesn't need to provide roads any longer (or schools, or hospitals) and that the private sector should take the strain instead, why should the Grants Commission not have some kind of say in the relativities involved... or put it another way, if not them, who?

The way I hear it from the comments so far is that they are highly constrained in their terms of reference, which pretty well ensures the status quo.
Posted by Pericles, Wednesday, 22 March 2006 8:11:15 AM
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Those of us who live in North Qld need a seperate State. While others haggle over GST distribution Qld's decentralised population has tried coalition and Labor government to achieve infrastructure for North Qld, without much success since the building of the Burdekin Falls Dam in 1987. All our schools and hospitals have been allowed to run down over a 40 year period.

If the New South Welshmen here would like more of the GST funding, that's fine with me, so long as you and your hoard's of immigrants stay in NSW. So many people from NSW and Victoria come up to and already under resourced Noth Qld for what it believed to be a seachange, our infrastructure such as it is has almost completely broken down under the strain. There is no tropical paradise here, as there once was, keep your GST money and your people.
Posted by SHONGA, Wednesday, 22 March 2006 12:32:27 PM
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