Source: https://www.treasury.tas.gov.au/BudgetPapersHTML/Budget2016/BP1/2016-17-BP1-5-General-Government-Revenue.htm
Timestamp: 2019-09-15 16:25:37
Document Index: 746396225

Matched Legal Cases: ['art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5']

2016-17 Budget Paper No 1 - Chapter 5 - General Government Revenue
· Total General Government Sector revenue is estimated to be $5 573.7 million in 2016‑17, an increase of $265.9 million above the 2015‑16 Budget estimate of $5 307.8 million.
· Over the Budget and Forward Estimates period, revenue growth is estimated to be an average annual rate of 1.1 per cent (measured from the 2015‑16 Estimated Outcome). This is below the long‑run trend of 4.6 per cent per annum, primarily due to lower growth forecasts for GST revenue and reduced Government business returns compared to the 2015-16 Budget.
· Key components of General Government Sector revenue in 2016‑17 include:
- GST Revenue is estimated to be $2 299.2 million, an increase of $53.1 million above the 2015‑16 Budget of $2 246.1 million;
- Australian Government Payments for Specific Purposes are estimated to be $1 221.6 million, an increase of $122.6 million above the 2015‑16 Budget of $1 099.0 million; and
- Taxation Revenue is estimated to be $1 055.6 million, an increase of $28.5 million above the 2015‑16 Budget of $1 027.1 million.
· The Budget position has been significantly adversely affected by the loss of over $500 million in GST receipts over the Budget and Forward Estimates.
· Tasmania's share of revenue from Grants, including GST and Australian Government Grants for Specific Purposes, equates to 65.2 per cent of total General Government sector revenue.
· The current Federal Financial Relations environment presents a range of risks to Tasmania's Grant funding over the Forward Estimates period.
This chapter provides an overview of Revenue for the 2016‑17 Budget and Forward Estimates. Table 5.1 lists the major General Government Sector revenue sources.
3 634.6)
3 537.7)
3 563.5)
3 639.0)
1 055.6)
1 075.9)
1 106.8)
1 138.7)
352.9)
368.9)
96.5)
263.8)
261.5)
191.2)
182.2)
153.8)
153.1)
156.3)
154.4)
5 497.3)
5 485.2)
5 585.0)
In 2016‑17, Total General Government Sector revenue is forecast to be $265.9 million higher than the 2015‑16 Budget. From the 2015-16 Estimated Outcome to 2019‑20, Total General Government Sector revenue is expected to grow by an average 1.1 per cent per annum which is below the long‑run trend of 4.6 per cent per annum. Lower than average growth over the 2016-17 Budget and Forward Estimates is mainly the result of reduced returns from Government businesses, and low growth in Australian Government Grants and other own-source revenue (including Sales of Goods and Services and Fines and Regulatory Fees) compared to historical averages.
Chart 5.1 shows the composition of Total General Government Sector revenue over time.
Tasmania's most significant source of funding is Grants revenue (including GST and Australian Government Grants), which comprises 65.2 per cent of total revenue in 2016‑17.
State Own‑Source Revenue accounts for 34.8 per cent of total revenue. The largest source of State Own‑Source Revenue is Taxation, followed by Sales of Goods and Services. Major revenue risks and sensitivities are discussed in chapter 1 of this Budget Paper. The major variances in revenue compared to the 2015‑16 Budget are discussed in the Policy and Parameter Statement in chapter 4 of this Budget Paper.
Chart 5.1: Composition of Total Revenue, 2004‑05 to 2019‑201
1. Data reflects actual outcomes for 2004‑05 to 2014‑15 and the original Budget estimates for 2015‑16.
2. Other Australian Government Grants includes Specific Purpose Payments and National Partnership Payments.
3. Other includes: Sales of Goods and Services; Fines and Regulatory Fees; Interest Income; Dividend, Tax and Rate Equivalent Income; Other Revenue; and Other Grants and Subsidies.
Grants primarily reflect transfers of funding from the Australian Government and are estimated to be $3 634.6 million in 2016-17. This is an increase of $181.3 million above the 2015-16 Budget of $3 453.3 million.
2 394.3
3 537.7
3 639.0
1. Estimates of Specific Purpose Payments and some National Partnership Payments may differ from those published in the Australian Government's 2016‑17 Budget due to the need to finalise State estimates before the release of the Australian Government Budget.
2. To the State includes National Health Reform and Students First education reforms funding.
· General Purpose Payments (GPPs), which are 'untied' payments that can be used at the State's discretion. The GST distribution is the only GPP received by Tasmania in 2016‑17; and
GST Revenue is the largest single source of revenue for Tasmania representing 41.3 per cent of Total General Government Sector revenue in 2016‑17.
The Commonwealth Grants Commission (CGC) makes annual recommendations to the Australian Government Treasurer regarding each jurisdiction's relativity.
Tasmania has a higher per capita GST need than all other jurisdictions except the Northern Territory and is a major beneficiary of the equalisation process, receiving $1 billion, or approximately 70 per cent, more GST revenue in 2016-17 than its per capita share. This reflects the relatively higher cost of service provision in the State and the below average capacity to raise revenue. Tasmania has the second lowest assessed fiscal capacity and Western Australia has the strongest assessed fiscal capacity.
Further detail on the CGC's methodology is provided in the Guide to the Budget (available on the Treasury website) and the 2016 Report on GST Revenue Sharing Relativities - 2016 Update (2016 Update Report) can be found on the CGC website at www.cgc.gov.au.
The 2016 Update Report recommends state relativities used to determine the distribution of GST revenue for 2016-17. Tasmania's assessed per capita GST relativity has decreased since the Report on GST Revenue Sharing Relativities 2015 Review. Consequently, Tasmania will receive less GST revenue in 2016-17 than it would have done if the 2016-17 GST pool was distributed to the states according to the 2015-16 relativities.
The decrease in Tasmania's 2016-17 relativity primarily reflects a decline in Tasmania's relative needs compared to other jurisdictions.
For the 2016-17 Budget, Treasury has used its own financial model to forecast GST revenues, as was the case for the 2015‑16 Budget. The model incorporates the latest CGC assessments and recommended relativities, Australian Government 2015‑16 Mid‑year Economic and Fiscal Outlook forecasts of the GST pool and state populations, and state and territory own‑source revenue estimates.
Chart 5.2 below illustrates Tasmania's relativities since the introduction of the GST. The chart shows Tasmania's forecast relativities returning to trend after rising rapidly until 2015-16, primarily as a result of the additional royalty revenue generated in Western Australia and the other mining states during the mining boom.
Chart 5.2: Tasmanian GST revenue sharing relativities, 2000-01 to 2019‑201
1. CGC calculation of relativities prepared on a consistent basis, with healthcare grants (pre 2009-10) treated by inclusion and five year averaging of single year relativities (prior to 2010-11) replaced with the current three year averaging method.
1. The National GST Collections are estimates from the 2015-16 MYEFO, due to the need to finalise State estimates before the release of the Australian Government Budget.
2. 2016-17 Budget is based on the actual relativity that will apply in 2016-17 as recommended by the CGC.
GST payments to Tasmania are expected to be $2 299.2 million in 2016‑17. The growth in GST revenue to Tasmania reflects GST pool growth, partially offset by lower than average population growth and a reduction in Tasmania's GST relativity.
Tasmania's GST relativity is forecast to fall over the Forward Estimates as a result of:
· the CGC's reduced assessment of Tasmania's expenditure needs compared to other jurisdictions; and
· reductions in forecast own‑source revenue in other jurisdictions, particularly Western Australia, Queensland and South Australia, the consequence of which is the effective redistribution of this above average revenue capacity is similarly reduced.
Chart 5.3 below illustrates the difference between the 2015-16 and 2016-17 State Budget estimates of GST revenue to Tasmania over the Forward Estimates. The compound annual growth rate of GST revenue from 2016‑17 to 2019‑20 is 1.4 per cent.
Tasmania's share of the GST pool has fallen slightly from approximately 3.9 per cent in 2015-16 to 3.8 per cent in 2016-17.
Chart 5.3: GST Revenue to Tasmania, 2007‑08 to 2019‑20
1. The 2016-17 Budget includes the 2015-16 Estimated Outcome for GST Revenue.
In 2016-17, Tasmania will receive an estimated $867.1 million in Specific Purpose Payments (SPPs) and national health and education reform agreement funding. This is an increase of $71.6 million above the estimate of $795.5 million in the 2015-16 Budget. The growth in SPPs and reform funding primarily reflects an increase in National Health Reform and Education funding under the Students First education reforms. It is noted that estimates of Specific Purpose Payments and some National Partnership Payments may differ from those published in the Australian Government's 2016‑17 Budget due to the need to finalise State estimates before the release of the Australian Government Budget.
SPPs are an ongoing funding arrangement between the Australian Government and the States for service delivery in a particular sector. There are currently three SPPs in operation: the National Skills and Workforce Development SPP; the National Disability Services SPP; and the National Affordable Housing SPP.
Reform funding arrangements, namely the National Health Reform Agreement and the Students First education reforms, replaced the former Health and Education SPPs as of July 2012 and January 2014 respectively. Further detail on National Health Reform is discussed in Appendix 5.1.
In 2016‑17, Tasmania will receive an estimated $354.5 million of funding in NPPs, an increase of $51 million above the $303.5 million estimated for 2015‑16. This primarily reflects increases in funding under the Land Transport Infrastructure program for roads and the bringing forward of Royal Hobart Hospital Redevelopment funding.
Table 5.4 details the Payments for Specific Purposes that Tasmania will receive from the Australian Government in 2016‑17 and over the Forward Estimates period.
Table 5.4: Commonwealth Payments for Specific Purposes1 (continued)
Reducing Elective Surgery Lists4
John L Grove ‑ LGH4
Enhancing Subacute Care ‑ Better Access to Community Based Palliative Care Services
Essential Vaccines4
Total Housing National Partnerships
Pay Equity for the Social and Community Services Sector4
Assist Preparation Towards Launch of the NDIS
Land Transport Infrastructure Projects
Off-Network Projects ‑ Road
IIP Bridges Renewal Program
Asset Recycling Fund ‑ New Investments
Developing Demand Driven Infrastructure for Tourism Industry
Sustainable Rural Water Use and Infrastructure4
National Whale Stranding Action Plan5
National Bushfire Mitigation
2. The Forward Estimates do not reflect the policy change in the 2016-17 Australian Government Budget to increase indexation to 3.56 per cent for the 2018 to 2020 calendar years as that information was not available at the time of finalising the 2016-17 Budget.
3. From 2017‑18 to 2019-20, the Australian Government has agreed to continue funding for Public Hospital services using activity based funding, capped at 6.5 per cent per annum nationally. However, given there is uncertainty with the quantum of funding under the new arrangements, funding based on previous growth trends has been assumed.
4. Some NPPs have been renegotiated in 2015-16 or have been rolled forward resulting in additional year(s) funding.
5. Funding for the National Whale Stranding Action Plan is $31 825 in 2016-17. This amount does not appear due to rounding.
State Taxation revenue is the main source of own-source revenue, which comprises 18.9 per cent of total revenue in 2016-17.
In 2016‑17, State Taxation revenue is forecast to be $28.5 million higher than the 2015‑16 Budget, primarily due to increases in Payroll Tax and Conveyance Duty. The increase in Payroll Tax is due to forecast growth in employment and average weekly earnings while Conveyance Duty is forecast to rise due to expectations of a continuing improvement in the property sector.
State Taxation revenue is forecast to grow by $83.1 million (or by a compound annual growth rate of 2.6 per cent) from 2016‑17 to 2019‑20, due mainly to growth in tax bases for Payroll Tax and Land Tax (there is no change in the rate structure of either tax).
Table 5.5 provides details of the components of the State Taxation estimates. Definitions of the State taxes, including relevant legislation, can be found in the Glossary section of the Guide to the Budget.
Conveyance duty2
Insurance duty3
Table 5.5: State Taxation (continued)
Motor tax4
1 138.7
1. Fire service levies are reported as a tax for the purposes of the Uniform Presentation Framework. However, all revenues go directly to the State Fire Commission.
2. Conveyance duty is forecast to reduce slightly in 2017-18 due to an expected return towards trend levels of large commercial property transactions, which have been higher than usual in 2015-16 and 2016-17.
3. Insurance duty estimates from 2017-18 onwards assume a continuation of the rate for duty on Motor Accident Insurance Board Premiums (MAIB) premiums that was introduced from 1 October 2012. This reflects the decision made by the Government, following the loss of over half a billion in GST revenues, to defer the proposed reduction in duty on compulsory third party premiums that was to commence on 1 July 2017, until the Budget is in a stronger position.
4. Motor tax estimates from 2017-18 onwards assume a continuation of the rates for motor tax on light motor vehicles that were introduced from 1 October 2012. This reflects the decision made by the Government, following the loss of over half a billion dollars in GST revenues, to defer the proposed reduction in motor tax that was to commence on 1 July 2017, until the Budget is in a stronger position.
Chart 5.4 shows that the 2016-17 Budget and Forward Estimates have increased compared to the levels forecast in the 2015‑16 Budget. This increase has been largely driven by a forecast rise in Conveyance Duty due to expectations of a continuing improvement in the property sector.
Chart 5.4: State Taxation Revenue, 2008‑09 to 2019‑20
1. This includes the 2015-16 Estimated Outcome for State Taxation Revenue. The increase in the 2015-16 Estimated Outcome compared to the 2015-16 Budget is due mainly to higher than expected Conveyance Duty revenue, which has been driven by a higher than usual level of large commercial property transactions.
Table 5.6: Estimated Major Tax Expenditures
Land Tax2
Table 5.6: Estimated Major Tax Expenditures (continued)
1. The Payroll Tax base is all wages paid in Tasmania. Estimates are based on the expected growth in payroll tax revenue.
2. The Land Tax base is all freehold land in Tasmania in 2015‑16. Estimates are based on the expected growth in Land Tax revenue. Land classified as principal place of residence (PPR) and primary production land (PPL) is charged a nil rate of Land Tax. Property used for religious, charitable or educational purposes is exempt from Land Tax.
3. The Conveyance Duty tax base is comprised of concessional or exempt properties transferred in 2014‑15. Estimates are based on the expected growth in conveyance duty revenue. Not all exempt transactions are recorded and not all valuation data is available, therefore the estimates are likely to be understated.
Revenue from the Sales of Goods and Services is estimated to be $352.9 million in 2016-17, a decrease of $4.9 million below the 2015-16 Budget of $357.8 million.
38.7)
Health and Human Services2
69.9)
Primary Industries, Parks, Water and Environment3
40.8)
41.8)
138.5)
145.1)
148.2)
149.5)
360.2)
367.4)
369.6)
1. The information provided in this section may differ from the Sales of Goods and Services for each agency in Government Services Budget Paper No 2 due to the elimination of inter-agency transactions during the consolidation process.
2. The decrease in Department of Health and Human Services in 2016-17 is primarily due to the reclassification to Other Revenue to more accurately align with the Department’s Financial Statements, and the cessation of one‑off revenue beyond 2015‑16.
3. The increase in 2016-17 and the Forward Estimates primarily reflects the recognition of revenue associated with the new Three Capes Track.
Revenue from Fines and Regulatory Fees is estimated to be $96.5 million in 2016-17, an increase of $400 000 above the 2015-16 Budget of $96.1 million. Table 5.8 details the major components of Fines and Regulatory Fees.
Commitment to Increase Fines Revenue
Making Criminals Pay2
Other Fines3
Vehicle Inspection Services Fees4
Quarantine Fees5
Other Regulatory Fees6
45.7)
1. The information provided in this section may differ from the Fines and Regulatory Fees for each agency in Government Services Budget Paper No 2 due to the elimination of inter-agency transactions during the consolidation process.
2. The reduction in Making Criminals Pay over the Budget and Forward Estimates reflects Parliament's decision not to proceed with the Government's policy proposal to impose levies on convicted criminals.
3. Other Fines is primarily comprised of fines collected by Department of Justice, Inland Fisheries Service and Department of Police, Fire and Emergency Management.
4. Vehicle Inspection Services Fees are estimated to be $46 000 in 2016-17, increasing to $49 000 in 2019‑20. This amount does not appear in the Table due to rounding.
5. The movement in Quarantine fees is due to a new TT-Line Company Pty Ltd offshore clearance arrangement, which has resulted in a reduction in revenue.
6. Other Regulatory Fees includes: the Tasmanian Economic Regulator; the Community Support Levy; and various other fees collected by agencies, such as recreational fishing licence fees. The reduction in Other Regulatory Fees in 2017‑18 and over the Forward Estimates period primarily reflects changes in the Road Safety Levy. Unless extended, the Road Safety Levy will cease in December 2017.
Interest Income is estimated to be $16.5 million in 2016-17, a decrease of $200 000 compared to the 2015‑16 Budget estimate of $16.7 million. The decrease reflects reduced interest rates.
Dividend, Tax and Rate Equivalent Income is estimated to be $263.8 million in 2016-17, an increase of $50.4 million compared to the 2015-16 Budget of $213.4 million.
This has largely been driven by the payment of a Special Dividend by TT-Line Company Pty Ltd in 2016‑17 and an increase in its Income Tax Equivalents.
Chart 5.5: Dividend, Tax and Rate Equivalent Income, 2008‑09 to 2019‑201
1. Data reflects actual outcomes for 2008‑09 to 2014‑15 and the original Budget estimates for 2015‑16.
Hydro Tasmania 3
83.5)
46.0)
129.4)
149.3)
106.4)
TT-Line Company Pty Ltd8
Hydro Tasmania9
Motor Accidents Insurance Board10
Tasmanian Networks Pty Ltd11
40.6)
Tasmanian Ports Corporation Pty Ltd12
TT-Line Company Pty Ltd13
TOTAL DIVIDEND TAX AND RATE EQUIVALENT INCOME
1. All Dividend, Tax and Rate Equivalent Income is reported on an accrual basis for all years.
2. The reductions in Dividends payable by Aurora Energy Pty Ltd across the Forward Estimates period reflect lower profit estimates based on the Tasmanian Economic Regulator's draft 2016 retail price determination.
3. Hydro Tasmania is expected to make a loss in 2015-16 due to low inflows, the Basslink outage and the strategies adopted as part of the Energy Supply Plan, which will result in nil dividends in 2016-17. As it is expected that Hydro Tasmania will be rebuilding its water storages, dividends are not expected to be paid until 2019‑20.
4. The decrease in Dividends from the Motor Accidents Insurance Board from 2016‑17 onwards reflects the year to date downturn in global investment markets and the impact of this on its five‑year rolling average dividend policy, and changes to its dividend payout ratio as announced in the 2014-15 Budget.
5. The decline in Dividends from Tasmanian Networks Pty Ltd from 2017‑18 onwards reflects the forecast decrease in distribution revenue over the period as well as higher interest expense due to increased debt levels.
6. The nil Dividend from Tasmanian Ports Corporation Pty Ltd in 2016‑17 reflects the effect on profitability of the significant program of non-commercial community asset maintenance expenditure that the corporation has been undertaking. That program will be substantially concluded in 2016-17, signaling a progressive return to profitability, supported by increasing freight volumes. Dividends return to more normal levels from 2018‑19.
7. The Tasmanian Public Finance Corporation is expected to provide additional discretionary dividends of $4 million per year from 2016-17 to 2018-19.
8. The Special Dividends from TT-Line Company Pty Ltd reflect an initial injection of $40 million in 2016‑17 and a second expected special dividend of $40 million in 2017‑18 to the Vessel Replacement Fund. This Fund will be held by Government and will have a specific legislative framework that will set out how the funds will be managed and applied. Other contributions to the Fund, from either the TT-Line Company Pty Ltd or the Government will be made over time as capacity emerges.
9. The movements in Income Tax Equivalents from Hydro Tasmania across the Budget and Forward Estimates period reflect Hydro Tasmania's progressive return to profitability in the wake of the combination of historic low inflows, the Basslink outage and the strategies adopted as part of the Energy Supply Plan.
10. The increase in Income Tax Equivalents from the Motor Accidents Insurance Board from 2016‑17 onwards reflects favourable revisions to its claims expense and investment portfolio.
11. The decrease in Income Tax Equivalents from Tasmanian Networks Pty Ltd across the Budget and Forward Estimates period is the result of reduced profitability due to lower forecast distribution revenues, higher interest expense and higher depreciation reflecting the increased proportion of short-life assets in its asset base.
12. The increase in Income Tax Equivalents from Tasmanian Ports Corporation Pty Ltd across the Budget and Forward Estimates period reflects the progressive return to profitability as the community asset maintenance program concludes and forecast freight volumes increase.
13. Increased patronage and operational cost savings are driving favourable Income Tax Equivalents for TT-Line Company Pty Ltd until 2018-19. No Income Tax Equivalents are expected in 2019-20 as a shipping income tax exemption is applicable.
Other Revenue is anticipated to be $153.8 million in 2016-17, an increase of $10.4 million above the 2015‑16 Budget of $143.4 million.
Mineral Royalties2
Health and Human Services4
30.6)
1. The information provided in this section may differ from Other Revenue estimates for each agency in Government Services Budget Paper No 2 due to the elimination of inter-agency transactions during the consolidation process.
2. The decrease in Mineral Royalties across the Budget and Forward Estimates relates to revised estimates based on advice from Mineral Resources Tasmania.
3. The increase in Education primarily reflects $4.7 million in increased school revenues in line with 2015-16 actual receipts and the reclassification of $1.3 million of School Banking revenue from Sales of Goods and Services to Other Revenue.
4. The increase in Health and Human Services primarily reflects the reclassification of agency revenue from Sales of Goods and Services to Other Revenue.
5. Other includes: Director of Public Prosecutions, Office of the Ombudsman, Royal Tasmanian Botanical Gardens, Tasmanian Audit Office and Tourism Tasmania.
Appendix 5.1: Federal Financial Relations
The states and territories are dependent on funding from the Australian Government for the provision of important services such as health, education, infrastructure and housing. The Australian Government seeks to provide this funding as a part of achieving significant national policy reform.
The following section highlights a number of current major reforms involving the Australian Government and the states and territories that may impact on funding to the State in the future. These reforms were recently given increased impetus following a Council of Australian Government (COAG) meeting held on 1 April 2016.
The National Health Reform Agreement (NHRA) determines Australian Government public hospital funding to each state and territory (state) predominantly on the basis of units of activity performed and costed at the nationally efficient price. It also includes some limited block funding calculated on the basis of national efficient costs where services or functions are more appropriately funded through block grants.
At the Council of Australian Governments (COAG) meeting on 1 April 2016, all jurisdictions agreed to extend the NHRA funding arrangements for public hospitals under a Heads of Agreement that will form the basis for negotiation of a time-limited addendum to the NHRA commencing on 1 July 2017 and ceasing on 30 June 2020. The Heads of Agreement also anticipates the development of a longer-term public hospital agreement to commence from 1 July 2020.
Under the Heads of Agreement, the Australian Government will consider providing additional funding if payments realised under activity based funding are less than the block funding payment alternatives outlined in the 2014‑15 Budget from 1 July 2017. The extension of activity based funding and a funding guarantee to Tasmania was confirmed in the Australian Government's 2016-17 Budget. The funding guarantee will be formalised in a National Partnership Agreement.
The Heads of Agreement broadly preserves the current NHRA funding arrangements over the three year period. These include the Australian Government contribution rate of 45 per cent of the efficient growth in activity based services and block grants, the Medicare public patient access principles, efficient price setting and existing administrative arrangements. However, it also agrees a number of amendments.
The overall growth in Australian Government funding will be capped at 6.5 per cent per annum (amounting to an estimated additional $2.9 billion in funding for public hospital services over the period of this interim agreement). The detail of how this cap will apply is to be determined by December 2016 as part of settling the addendum.
The Heads of Agreement also commits all parties to develop and commence, by 1 July 2017, implementation of specific reforms around coordinated care for patients with chronic and complex disease; incorporation of quality and safety considerations in pricing and funding; and reducing potentially avoidable public hospital admission rates both through hospital based reform initiatives and through Australian Government reforms to primary care.
The parties have also agreed to incorporate a payment incentive for prompt provision of hospital data to enable timely reconciliation.
The Heads of Agreement between the Commonwealth and the States and Territories on Public Hospital Funding is publicly accessible on the COAG website at www.coag.gov.au.
National Taxation Reform
At the 1 April 2016 COAG meeting, leaders agreed to consider proposals to share personal income tax revenue with the states to provide them with access to a broad revenue base that grows in line with the economy, reduce the number of Australian Government grants to the states, providing them with greater autonomy and reducing administrative burden and create flexibility for states to meet their ongoing expenditure needs.
COAG agreed that this work, along with the work on broader opportunities for tax reform, including state tax reform, will be progressed by the Council on Federal Financial Relations, with a progress report to COAG at its next meeting. Tasmania will actively participate in these developments, with a view to agreeing only to changes that are in the State's best interests.
COAG also agreed at the 1 April 2016 meeting that competition and productivity reforms are important to drive Australia's economic performance and living standards. It was agreed that Treasurers develop a new competition and productivity enhancing reform agreement, for consideration at the next COAG meeting.
The draft agreement will incorporate:
· an updated set of Commonwealth-state competition principles drawing from, and expanding on, those recommended by the Harper Competition Policy Review report;
· shared national and state‑specific competition and productivity reforms;
· independent evaluation and assessment mechanisms; and
· innovation payments, based on performance, including consideration of recent reforms.