| Abstract: | Abstract: The Commonwealth Grants Commission was established in 1933 to inquire into the payment of special grants to the States. It has retained this function to the present day, and has also conducted inquiries into grants to local government, the distribution of general revenue assistance to the States, and the financial position of the Territories. Although special grants had been paid for over twenty years before the establishment of the Commission, the principle upon which grants should be based had not been determined. The first members of the Commission, after debating the merits of grants based on financial need and grants based on disabilities due to federation, adopted in their third report the principle of fiscal equalization which the Commission still follows. Under this principle grants are assessed that enable each State to provide a standard level of service to its residents so long as it levies taxes at standard rates. The Commission operates as a semi-judicial body, receiving written submissions and conducting public hearings at which witnesses from the States and the Commonwealth Treasury are examined on oath. It also conducts an extensive analysis of State government finances and other information in arriving at its conclusions. Over the years many distinguished Australians have served on the Commission, and their work has contributed to the high reputation enjoyed by the Commission in carrying out its task of maintaining a balance in the fiscal position of the States. |
