In the long history of our democracy (and it is very long on world standards) there has been an ebb and flow of power.
In colonial times power resided mainly in the colonial (state) capitals. London was too far away. Then in 1901 there was a shift of power to the central government (then in Melbourne). Then in 1925 the High Court stopped than trend and power moved back to the states. In 1942 under threat of Japanese invasion power moved back to the centre, where it has stayed by and large until now. In 1942, the states were forced to give up income tax, which the Commonwealth has kept ever since. I suspect things are about to change and some power is about to move back to the states.
This is due to the way the GST has been framed.
In an article on Wednesday I crunched a lot of figures which should not be repeated here. There is some argument of the detail but the central thesis remains. Prime Minister John Howard, in his eagerness to get the GST up gave away too much. He gave away all the GST revenue to the states.
Continue reading “2000_02_february_gst to the states”