A Successful Transition? ACT Public Finances Under Self‐government

Abstract

Generous Commonwealth funding before self‐government in 1989 meant that the ACT enjoyed high government expenditures and low taxation compared with the states. Self‐government meant a transition to normal state funding, ultimately involving substantial reductions in Commonwealth grants. Successive governments aligned taxes with other jurisdictions, but failed to reduce expenditures, which remained well above Commonwealth Grants Commission (CGC) assessments of levels necessary to provide a standard level of services. The fiscal position — however measured — has worsened. The transition to normal funding has been unsuccessful and, without the necessary adjustments, a heavy burden will be placed on future Canberrans.