This paper explains how the Commission assesses state investment needs by using schools investment as an example. It provides a step-by-step guide to the assessment method and highlights the influence of user-populations and what states collectively spend on infrastructure types.
In recommending a distribution of the GST among the states, the Commonwealth Grants Commission considers Commonwealth payments that are available to the states to fund services and invest in infrastructure.
The amount of GST a state or territory needs depends on its economic, social and demographic characteristics. The research paper looks at state GST needs over a decade and the main reasons for changes. The paper provides an overview of the drivers of states' fiscal capacities and the impact that changes in states' circumstances can have on GST needs.