With the approach of the Council of Australian Governments meeting in Canberra on Friday, it is timely to recall the extent to which the states and territories are benefiting from the GST.
From 2004-05 onwards, all states and territories will be better off financially than they would have been had the previous Commonwealth-State financial arrangements been maintained.
Over the five year period from 2003-04 to 2007-08, the States and Territories are expected to receive total GST receipts of $183.9 billion.
Strong growth in the economy has seen GST revenues increase much faster than originally projected. As a result, all states and territories are better off sooner than was expected when the Ministerial Council for Commonwealth-State Financial Relations first met in March 2000 (except Queensland, which was better off in 2002 03, as predicted).
Updated revenue estimates outlined in the 2004-05 Commonwealth Budget Papers show that in total the states and territories will be almost $9 billion 'better off' as a result of the GST by 2007-08.
The states and territories have for many years sought access to a source of growth revenue so they can undertake the long-term planning needed to meet the demands of a growing population.
To address this concern the Commonwealth decided to give all of the GST revenue to the states and territories.
Strong economic growth and the boom in GST revenue means that the states and territories have more than enough money to fund hospitals, schools, roads and other community services to the highest standard.