Legislative Council Thursday 24 June, 2021

Ms WEBB, on behalf of Ms FORREST, question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

I refer to the occasional paper GST and the Commonwealth Grants Commission's assessment of health expenditure needs, specifically chart 3 on page 10, titled 'Assessed and GFF Actual Health Expenditure'. With regard to the 2019-20 year:

(1) Is the CGC assessed amount in the table based on an average of the three years 2015-16 to 2017-18 as suggested on page 6 of the paper?

(a) If not, what are those figures based on?

(2) Is the GFS actual amount based on actuals for the 2019-20 year?

(a) If not, what is the basis?

(3) Is the GFS actual amount before or after the adjustments referred to in the first paragraph on page 7 of the paper?

(4) If the two measures cover different data sets in different time periods, how is it possible to draw meaningful conclusions?

(5) Are any additional caveats required to assist a lay reader interpret that data, for example, to understand if our actual spending in the 2019-20 was greater than the assessment based on the 2015-16 to 2017-18 years?

ANSWER

Madam Deputy President, I thank the honourable member for the question. The answer, the assumption and methodology applied in the preparation of the report have been independently determined by the secretary of the Department of Treasury and Finance.

(1) The CGC assessed expenditure as shown in chart 3 reflects a single year expenditure assessment. That is the 2019-20 assessed expenditure is based on the 2019-20 data. The assessed expenditure for individual years is subsequently used to calculate the three-year averages that the CGC uses to recommend GST relativities.

(2) The 2019-20 Government Finance Statistics (GFS) data is collected by the Australian Bureau of Statistics from state and territory governments' 2019-20 Annual Financial Statements. Therefore 2019-20 GFS data reflects actual 2019-20 general government expenditure.

(3) The ABS GFS data does not reflect any adjustments made by the CGC for the purpose of its assessments.

(4) The CGC assessed expenditure and ABS GFS data sets cover the same period.

(5) As stated in the response to question 1, the 2019-20 assessed expenditure reflects a single year assessment and is not the average of 2015-16 to 2017-18. The CGC's individual expenditure and revenue category assessments are not intended to inform the states on how much they should be spending in each expenditure category or how much revenue they should be raising. Rather, their primary function is to enable the CGC to recommend the distribution of the GST consistent with the principle of Horizontal Fiscal Equalisation.