Book contents
- Frontmatter
- Contents
- Tables and figures
- Preface
- Dedication
- Introduction
- 1 A federal republic
- 2 Federal theory and Australian federalism
- 3 The Senate and responsible government
- 4 Labor and the Australian Constitution
- 5 The referendum process
- 6 The protection of rights
- 7 The High Court and the Constitution
- 8 Intergovernmental relations and new federalism
- 9 Fiscal federalism
- 10 Towards and beyond 2001
- Bibliography
- Index
9 - Fiscal federalism
Published online by Cambridge University Press: 05 November 2011
- Frontmatter
- Contents
- Tables and figures
- Preface
- Dedication
- Introduction
- 1 A federal republic
- 2 Federal theory and Australian federalism
- 3 The Senate and responsible government
- 4 Labor and the Australian Constitution
- 5 The referendum process
- 6 The protection of rights
- 7 The High Court and the Constitution
- 8 Intergovernmental relations and new federalism
- 9 Fiscal federalism
- 10 Towards and beyond 2001
- Bibliography
- Index
Summary
Designing the fiscal provisions of the Constitution was one of the most difficult and, for many commentators at that time and today, the least satisfactory parts of Australia's constitutional design. This chapter reviews what was done and why, and explores criteria for evaluating the constitutional design of the finance provisions incorporated in chapter 4 of the Constitution entitled ‘Finance and Trade’.
Such an exercise has more than arcane historical interest because of the public brawl over vertical fiscal imbalance that derailed Hawke's New Federalism. In a notable National Press Club address of October 1991, a milestone in his successful bid for the prime ministership, Paul Keating championed the virtues of maintaining the Commonwealth's fiscal dominance. As treasurer, Keating had never been enthusiastic about proposals for reducing the Commonwealth's monopoly over income tax and had only been lukewarm in support of Prime Minister Hawke's undertaking to the State premiers. Having resigned from the Hawke ministry in order to bid for the prime ministership, Keating seized on discontent within the federal caucus about the New Federalism process and proposals that would reduce the Commonwealth's fiscal dominance over the States.
In rejecting proposals for sharing the income tax base with the States Keating claimed that the fiscal primacy of the Commonwealth, or ‘vertical fiscal imbalance’ to use technical jargon that became current usage at the time, was a design feature rather than a fault of the Constitution as the fragile consensus supporting the Special Premiers' Conference process implied.
- Type
- Chapter
- Information
- A Federal RepublicAustralia's Constitutional System of Government, pp. 214 - 238Publisher: Cambridge University PressPrint publication year: 1995