A complete review of the methodology underlying the CGC’s advice to Government on the relative fiscal capacity of States and Territories is conducted every five years. The purpose of the review is to determine the most appropriate methods and data for measuring State and Territory relative fiscal capacity.
A multi-year work program has been developed and agreed in consultation with stakeholders, with the final report due to the Commonwealth Treasurer in February 2020. The CGC is also working with stakeholders to understand the impacts of the recommendations from the Productivity Commission Inquiry into horizontal fiscal equalisation.
Feedback is being sought on the draft assessment papers outlining proposed assessment methods. Submissions were due by 31st August 2018.
The update process is conducted annually and provides recommendations to the Commonwealth Treasurer on the relative fiscal capacity of the States using the latest review methods. Calculations are updated using the latest reliable data for the previous three financial years.
The 2018 Update Report was provided to the Commonwealth Treasurer in March 2018. The recommended relativities will be used to determine the distribution of GST revenue among the States in 2018-19.