PM Transcripts

FOR PRESS P. M. No 33/ 1970
PREMIERS' CONFERENCE FEBRUARY 1970
COMMONWEALTH'S OFFER NEW FINANCIAL AGREEMENT
The Commonwealth today offered the States new bases for
improving State revenues in a new financial agreement.
The Commonwealth agreed in principle that there should be an
increase in the basic amount of money on which increases in State revenue
grants are calculated and offered to discuss this with the States. The
Commonwealth however, rejected the proposal that the rate of growth should
be tied to the rate of growth of income tax collections.
The Commonwealth also agreed in principle that there should
be a change in the betterment factor so that the State revenue grants should
grow more quickly year by year. This too will be discussed with the States.
The Commonwealth suggested that it should, progressively
over the term of the next agreement, assume full responsibility for a
proportion of State debt suggesting for purposes of illustration a figure
of one billion dollars.
The Commonwealth also suggested that in order to prevent
State debt growing as fast as it otherwise would do the Commonwealth
should provide a portion of the loan programme as, in effect, revenue
grants rather than loans.
The Commonwealth indicated it could not agree to vacating
part of the personal or company income tax field and said that in its
opinion income tax rates in these fields should be uniform and that personal
income tax rates should be decreased from their present levels. However
it undertook to join with the States in examining any proposals made by the
States for an alternative field of growth tax.
CA NBERRA
26 February 1970