PREDICTIONS OF THE AUSTRALIAN FEDERAL GRANTS TO THE STATES: A MODEL AND PREDICTIONS OF THE COMMONWEALTH GRANTS COMMISSION?S DISTRIBUTIONS TO THE STATES

The Australian Government uses the Commonwealth Grants Commission (CGC) to advise on how much Federal money should be re-distributed to each of the States each year. The Commonwealth Grants Commission uses a complex process of assessing how much each state needs, and their revenue raising capacity. This book provides an assessment of the CGC methods, and provides a much simpler method using a regression analysis. The method suggested provides similar results to those calculated by the CGC. The final recommendation from the book is that the CGC uses a more complex method every five years, to re-assess the base distribution to each of the States; but then use the regression method suggested in this book to provide more certainty, stability and predictability to the grant distributions for each State.