Budget explainer: the federal-state battle for funding


Adam Webster, University of Oxford

There seems to be an ever present struggle for a share of the revenue government collects, not only between states but also between the different levels of government. The Conversation

In each year’s budget, the federal government allocates funds for federal programs (such as defence) and for some programs operated at a state level (such as school education, public transport, and hospitals). It has this role because it also collects more revenue from taxpayers than the states.

The reason for this all relates back to (at least in part) the Australian constitution.

The division of power between the federal and state governments

The federal parliament can only legislate (that is, make laws) in certain areas, known as “heads of power”, most of which are listed in sections 51 and 52 of the Constitution. This gives the federal parliament the power to legislate with respect to matters such as defence, external affairs, immigration, invalid and old-age pensions, and marriage.

In contrast, there is no equivalent limit on the legislative power of the states. The states may legislate in any area. However, section 109 of the constitution provides that where there is an inconsistency between a federal law and a state law, the federal law will prevail. In simple terms, this means that if the federal parliament has made a law dealing with a particular matter, state governments are unable to legislate in ways that conflict with the federal law.

The federal government’s control of revenue

The state and federal governments all have the power to collect tax, subject to some exceptions. Notably, section 90 of the Constitution gives the federal government exclusive power over the lucrative revenue streams of customs and excise duties (taxes on goods, such as alcohol, tobacco and fuel).

Until the Second World War, Australians paid income tax to both state and federal governments. However since 1942, the federal government has been the sole collector of income tax.

The federal government has also collected company tax for over 100 years, and the GST since 2000. The states could still collect income tax if they wanted to, but choose not to for political reasons.

Prime Minister Malcolm Turnbull tried to explore the possibility last year of both the federal and state governments collecting income tax, but this was quickly rejected by the states. While the states generate some revenue – for example through gambling, property and payroll taxes and mining royalties – they are unable to collect anywhere near the same amount as the federal government.

This creates a “vertical fiscal imbalance” between the federal and state governments. Conversely, the federal government is in the opposite position: while the federal government collects extensive revenue, its power to spend and directly fund programs is more limited.



The Conversation, CC BY-ND

Testing the government’s power to spend on certain programs

Until recently, the federal government thought it could spend money more or less as it pleased. However, the High Court clarified and restricted the federal government’s power to spend money and limited its ability to fund directly some programs.

Its power to spend was tested in 2012 and 2014 in two legal challenges to the government’s funding of the national school chaplaincy program. Prior to the legal challenges, the federal government had entered into agreements with religious service organisations – such as Scripture Union Queensland – to provide chaplains in schools.

The High Court held that (with some small exceptions) the federal government’s power to spend money is limited to where the authority to spend money is expressly conferred by legislation. The legislation authorising the spending must also be supported by one of the “heads of power” granted to the federal parliament by the constitution.

In the case of the chaplaincy program, the court rejected the arguments that the legislation could be supported by the power in one section of the Constitution to make laws for the “provision of…benefits to students” or by the corporations power in another section of the Constitution. To continue the funding of the national school chaplaincy program the federal government turned to the states for assistance.

How the federal government gives money to the states

Section 96 of the Constitution provides for the federal government to provide a significant proportion of its revenue to the states:

…the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

This distribution of revenue takes two forms – general revenue assistance (“untied funding”) and payments for a specific purpose (“tied funding”).

The untied funding that states receive from the federal government is largely made up of the money that the federal government collects from the GST. The states can spend this money as they see fit.

However, the passing on of the GST revenue is not unconditional. It’s conditional on the states giving up the collection of a number a number of states taxes.

The complex task of carving up the GST revenue between the states is left to the Commonwealth Grants Commission. The annual process always seems to leave a least one state claiming it should receive a greater share of the pie.

The federal government may also provide funding to the states for a specific purpose. The states have to consent to receiving the funding (which is not usually a problem), but it does mean that the federal government cannot impose programs on the states that they vehemently oppose.

This funding is tied to a particular project, where the federal government provides the funds and the state carries out the project. Grants such as these have been used regularly to fund education and health projects in the states. These specific purpose grants may be conditional on states meeting regular reporting requirements or achieving certain milestones.

Providing funding to the states through specific purpose grants allows the federal government to have great influence on policy areas that have traditionally been within the purview of the states.

The federal system of government created by the constitution divides power between the federal and state governments. While at times this might seem inefficient, it also provides checks and balances on government spending.

Adam Webster, Departmental Lecturer in Law and Public Policy, Blavatnik School of Government, University of Oxford

This article was originally published on The Conversation. Read the original article.

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Australian Politics: 29 September 2013 – The Slow Death of the Greens?


The federal election is over and the Coalition is now in government. Already there is a growing dissatisfaction with the new Abbott-led government over a wide-ranging series of issues including nepotism, asylum seeker policy, the environment, a lack of governance, etc. There is also continuing debate within the various opposition parties concerning their future direction, policies, etc. Yet for the Greens, the future is questionable, with some believing the party to be in serious decline – even among those within the party.

The link below is to an article reporting on the turmoil within the Greens party.

For more visit:
http://www.smh.com.au/federal-politics/political-news/milnes-greens-marching-to-slow-death-20130928-2ulgp.html



Australian Politics: 21 July 2013


The new hardline regime concerning asylum seekers has been implemented with the first boat arriving since the announcement of the changes by Kevin Rudd and Labor. The Coalition is supporting some of the changes, which for Labor should be an alarm bell, meaning it has gone too far to the right.

For more visit:
http://www.theaustralian.com.au/national-affairs/first-asylum-boat-arrives-under-rudds-hardline-png-solution/story-fn59niix-1226682406568



The link below is to an article that looks at some of the divergent interest parties contesting this year’s federal election.

For more visit:
http://www.easternriverinachronicle.com.au/story/1650949/something-for-everyone-how-niche-parties-are-taking-over-australias-political-landscape/

Australian Politics: 20 July 2013



The Palmer United Party is just one of many political parties contesting the upcoming federal election. Clive Palmer, founder of the party, intends to be Prime Minister after the election – but what is he like? The link below is to an article reporting on the man behind the party.”>

For more visit:
http://www.smh.com.au/national/the-palmersaurus-party-20130715-2pyvl.html

Ever wondered what life is like for a former Prime Minister? The link below is to an article reporting on life after politics for former Prime Minister Julia Gillard.

For more visit:
http://www.smh.com.au/national/life-after-politics-for-julia-gillard-the-whirl-is-her-oyster-20130719-2q9ra.html

Australian Politics: 13 July 2013


The race to fill seats that will fall vacant at the next federal election is heating up as time runs out for the process to be completed. For more visit the link below:

http://www.theaustralian.com.au/national-affairs/alp-enforcers-back-down-on-preselections/story-fn59niix-1226678879974

The race for Lalor is beginning to become a little clearer with various candidates withdrawing from the preselection process. For more visit the link below:

http://bigpondnews.com/articles/TopStories/2013/07/13/Clutterham_withdraws_from_Lalor_race_887660.html

Australia: Gillard Survives While Labor Dies


The ALP has completed its quest for personal destruction by sticking with Julia Gillard and Kevin Rudd ruling himself out as leading the ALP ever again. It is a sad day for the ALP, except for the fact that the ALP doesn’t realise it is. In my view they have ensured they will be in opposition following the federal election, completely ignoring the views of those they are asking to vote for them. I anticipate that the ALP will now suffer an enormous hiding unless ALP supporters can somehow see past the disregard that the party has shown to them and votes for a Prime Minister they don’t want.

The link below is to an article covering the latest dramas unfolding in Canberra throughout the day:

For more visit:
http://www.theaustralian.com.au/national-affairs/in-depth/martin-ferguson-joins-labor-exodus-following-failed-leadership-coup/story-fnhqeu0x-1226603503254

Australia: Katter’s Australian Party – Chainsaw Massacre


The link below is to an article that reports on one of Bob Katter’s candidates for the upcoming Australian federal election and his destruction of ALP signs with a chainsaw.

For more visit:
http://www.theaustralian.com.au/news/breaking-news/katter-apes-newman-with-volunteer-cabinet/story-fn3dxiwe-1226591225804

Pastor, Church Official Shot Dead in Nigeria


Muslim militants of Boko Haram blamed for killings in Borno state.

JOS, Nigeria, June 10 (CDN) — Muslim extremists from the Boko Haram sect on Tuesday (June 7) shot and killed a Church of Christ in Nigeria (COCIN) pastor and his church secretary in Maiduguri, in northeastern Nigeria’s Borno state.

The Rev. David Usman, 45, and church secretary Hamman Andrew were the latest casualties in an upsurge of Islamic militancy that has engulfed northern Nigeria this year, resulting in the destruction of church buildings and the killing and maiming of Christians.

The Rev. Titus Dama Pona, pastor with the Evangelical Church Winning All (ECWA) in Maiduguri, told Compass that Pastor Usman was shot and killed by the members of the Boko Haram near an area of Maiduguri called the Railway Quarters, where the slain pastor’s church is located.

Pona said Christians in Maiduguri have become full of dread over the violence of Boko Haram, which seeks to impose sharia (Islamic law) on northern Nigeria.

“Christians have become the targets of these Muslim militants – we no longer feel free moving around the city, and most churches no longer carry out worship service for fear of becoming targets of these unprovoked attacks,” Pona said.

Officials at COCIN’s national headquarters in Jos, Plateau state, confirmed the killing of Pastor Usman. The Rev. Logan Gongchi of a COCIN congregation in Kerang, Jos, told Compass that area Christians were shocked at the news.

Gongchi said he attended Gindiri Theological College with Pastor Usman beginning in August 2003, and that both of them were ordained into pastoral ministry on Nov. 27, 2009.

“We knew him to be very gentle, an introvert, who was always silent in the class and only spoke while answering questions from our teachers,” Gongchi said. “He had a simple lifestyle and was easygoing with other students. He was very accommodating and ready at all times to withstand life’s pressures – this is in addition to being very jovial.”

Gongchi described Usman as “a pastor to the core because of his humility. I remember he once told me that he was not used to working with peasant farmers’ working tools, like the hoe. But with time he adapted to the reality of working with these tools on the farm in the school.”

Pastor Usman was excellent at counseling Christians and others while they were at the COCIN theological college, Gongchi said, adding that the pastor greatly encouraged him when he was suffering a long illness from 2005 to 2007.

“His encouraging words kept my faith alive, and the Lord saw me overcoming my ill health,” he said. “So when I heard the news about his murder, I cried.”

 

Motives

The late pastor had once complained about the activities of Boko Haram, saying that unless the Nigerian government faced up to the challenge of its attacks, the extremist group would consume the lives of innocent persons, according to Gongchi.

“Pastor Usman once commented on the activities of the Boko Haram, which he said has undermined the church not only in Maiduguri, but in Borno state,” Gongchi said. “At the time, he urged us to pray for them, as they did not know how the problem will end.”

Gongchi advised the Nigerian government to find a lasting solution to Boko Haram’s violence, which has also claimed the lives of moderate Muslim leaders and police.

The Railway Quarters area in Maiduguri housed the seat of Boko Haram until 2009, when Nigerian security agencies and the military demolished its headquarters and captured and killed the sect’s leader, Mohammed Yusuf, and some of his followers.

The killing of Pastor Usman marked the second attack on his church premises by the Muslim militants. The first attack came on July 29, 2009, when Boko Haram militants burned the church building and killed some members of his congregation.

On Monday (June 6), the militants had bombed the St. Patrick’s Catholic Church, along with other areas in Maiduguri, killing three people. In all, 14 people were killed in three explosions at the church and police stations, and authorities have arrested 14 people.

The Boko Haram name is interpreted figuratively as “against Western education,” but some say it can also refer to the forbidding of the Judeo-Christian faith. They say the word “Boko” is a corruption in Hausa language for the English word “Book,” referring to the Islamic scripture’s description of Jews and Christians as “people of the Book,” while “Haram” is a Hausa word derived from Arabic meaning, “forbidding.”

Boko Haram leaders have openly declared that they want to establish an Islamic theocratic state in Nigeria, and they reject democratic institutions, which they associate with Christianity. Their bombings and suspected involvement in April’s post-election violence in Nigeria were aimed at stifling democracy, which they see as a system of government built on the foundation of Christian scripture.

Christians as well as Muslims suffered many casualties after supporters of Muslim presidential candidate Muhammudu Buhari lost the April 16 federal election to Goodluck Jonathan, a Christian. Primarily Muslim rioters claimed vote fraud, although international observers praised the polls as the fairest since 1999.

Nigeria’s population of more than 158.2 million is almost evenly divided between Christians, who make up 51.3 percent of the population and live mainly in the south, and Muslims, who account for 45 percent of the population and live mainly in the north. The percentages may be less, however, as those practicing indigenous religions may be as high as 10 percent of the total population, according to Operation World.

Report From Compass Direct News
http://www.compassdirect.org/

 

Two Christians Slain in Attack Outside Church in Pakistan


Muslim youths kill two, wound two others after dispute over teasing of Christian women.

KARACHI, Pakistan, March 22 (CDN) — Two Christians were gunned down and two others are in a serious condition with bullet wounds after Muslim youths attacked them outside a church building in Hyderabad last night, witnesses said.

Residents of Hurr Camp, a colony of working-class Christians in Hyderabad in Sindh Province, were reportedly celebrating the 30th anniversary of their Salvation Army church when a group of Muslim youths gathered outside the building and started playing music loudly on their cell phones. They also started teasing Christian women as they arrived for the celebration, according to reports.

Christians Younis Masih, 47, Siddique Masih, 45, Jameel Masih, 22, and a 20-year-old identified as Waseem came out of the church building to stop the Muslim youths from teasing the Christian women, telling them to respect the sanctity of the church. A verbal clash ensued, after which the Muslim youths left, only to return with handguns.

Witnesses told Compass by phone that the Muslim youths opened fire on the Christians, killing Younis Masih and Jameel Masih instantly, and seriously injuring Siddique Masih and Waseem. The injured men have been transferred to a hospital in Karachi, the provincial capital of Sindh.

Younis Masih is survived by his wife and four children, while Jameel Masih was married only a month ago, and his sudden death has put his family into a state of shock.

“My son had gone to the church to attend the anniversary celebrations from our family…a few hours later we were told about his death,” a wailing Surraya Bibi told Compass by telephone from Hyderabad. “I got him married only a month ago. The cold-blooded murderers have destroyed my family, but our most immediate concern is Jameel’s wife, who has gone completely silent since the news was broken to her.”

She said the local police’s indifference towards the brutal incident had exacerbated the Christians’ sorrow.

“The police were acting as if it was not a big deal,” she said. “They did not register a case until late at night, when all of us blocked the main Hyderabad Expressway along with the two dead bodies for some hours.”

Jameel Masih’s paternal uncle, Anwar Masih, told Compass that police were biased against the Christians, as “none of the accused has been arrested so far, and they are roaming the area without any fear.”

He said police had taken into custody some teenagers who had no involvement in the killings.

“This has been done just to show their senior officials that they are not sitting idle,” he said.

Anwar Masih said the families had little hope for justice, because “if we have to dishonor the dead bodies by placing them on the roads to get a case registered, what should we hope for when the investigations begin?”

He said that during their protest, some leaders of the Muttahida Qaumi Movement, a regional political party known for its secular but often violent ideology, arrived and suggested the Christians retaliate against the Muslims.

“We told them that as Christians we are not going to take the law into our hands,” Anwar Masih said.

He said that Jameel Masih’s father, Sardar Masih, and the other Christians would visit the Baldia Colony police station Wednesday morning (March 23) to see whether there has been any progress in the investigation.

“Please pray for us,” he said.

Compass made efforts to contact Hyderabad District Police Officer Munir Ahmed Sheikh to ask about progress in the case and whether any of the named suspects have been arrested by police, but the calls were unanswered.

The killing of the two Christians comes a week after another Christian, sentenced to life imprisonment on false blasphemy charges, died in Karachi Central Prison. The family of Qamar David claims he was murdered on March 15, while conflicting reports from the jail suggest that he died of heart failure.

If David died from torture, yesterday’s killings bring the number of Christians murdered in March alone to four, the most prominent among them being Federal Minister for Minority Affairs Shahbaz Bhatti, who was assassinated in Islamabad on March 2 for opposing the country’s controversial blasphemy laws.

Report from Compass Direct News
http://www.compassdirect.org

Pakistani Officials Back Muslim Land-Grabbers, Christians Say


Senior district authorities accused of supporting desecration of 150 Christian graves.

LAHORE, Pakistan, March 9 (CDN) — Christians in south Punjab Province are accusing senior district officials of supporting local Muslims who allegedly demolished 150 Christian graves and desecrated holy relics – and are now threatening Christians seeking legal redress.

In the Kot Addu area of Muzaffargarh district, Waseem Shakir told Compass by telephone that an influential Muslim group last Nov. 6 took illegal possession of a 1,210-square yard piece of land designated as a Christian cemetery and set up shops on it. Official records state that the portion of land was allotted as a Christian cemetery, he said.

“Local Muslims demolished 150 Christians’ graves and desecrated the cross and biblical inscriptions on the graves in a bid to construct shops on the property,” said Shakir, a resident of Chak (Village) 518, Peer Jaggi Morr, Kot Addu. “Only five marlas [151.25 square yards] are all that is left for the Christians to bury their dead now.”

Shakir said that all Muzaffargarh area authorities, including the local politicians, were supporting the alleged land-grabbers even as Christians feared a mob attack.

“The situation has come to point where even the local police have warned their higher-ups that the tension could provoke a Gojra-type incident,” he said, adding that Muslim instigators were now openly trying to intimidate him and Boota Masih, who registered a case with police, into dropping the matter.

In Gojra on Aug. 1, 2009, Muslim hordes acting on an unsubstantiated rumor of blasphemy of the Quran – and whipped into a frenzy by local imams and banned terrorist groups – killed at least seven Christians, looted more than 100 houses and set fire to 50 of them. At least 19 people were injured in the melee.

Shakir said Christians had approached police and the district administration to register a case against the Muslims for desecrating their sacred relics and hurting religious sentiments, but authorities have shown little attention to their grievance. Masih registered the complaint on behalf of area Christians, but the station house officer of the Daira Deen Panah Police, Waseem Leghari, altered it to state that Muslims had only occupied a piece of the cemetery land, Shakir said.

“Leghari registered a case against the Muslims under Section 297 of the Pakistan Penal Code [trespass of a place for the dead], which is a bailable offense, despite the fact that a case under the blasphemy law should have been registered against the Muslims for desecrating the Christian holy relics,” Shakir said.

Police took no measures to arrest the 11 named suspects, he added.

“No one seems bothered over the desecration of our cross and biblical inscriptions,” Shakir said.

Section 297 of the penal code states, “Whoever, with the intention of wounding the feelings of any person, or of insulting the religion of any person, or with the knowledge that the feelings of any person are likely to be wounded, or that the religion of any person is likely to be insulted thereby, commits any trespass in any place of worship or on any place of sculpture, or any place set apart for the performance of funeral rites or as a depository for the remains of the dead, or offers any indignity to any human corpse or causes disturbance to any persons assembled for the performance of funeral ceremonies, shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both.”

Shakir said that, besides the 150 demolished graves, the illegal occupants had thrown garbage on another 50 graves. The police’s indifferent attitude towards the Christian community had been hurtful, he said, and Christians had repeatedly taken up the issue with District Police Officer (DPO) Chaudhry Manzoor and District Coordination Officer Tahir Khurshid.

They did not take the issue seriously, Shakir said.

DPO Manzoor rejected the Christians’ accusations.

“It’s not as serious a case as they are portraying,” he told Compass. “The people who have built shops on the land are not illegal occupants but the real owners.”

He said Christians were furious because the shopkeepers put some of their belongings on the graves.

“No one has desecrated any Christian holy symbol, book or grave,” he said. “Any fears that the issue could lead to another Gojra are baseless.”

Manzoor said the matter would be resolved amicably.

Napolean Qayyum, leader of the Minorities Wing of the ruling Pakistan People’s Party (PPP), told Compass that open desecration of the Christian symbols and places and the police’s alleged support of the culprits showed the prejudice of the Punjab government towards minority groups.

“An application regarding this incident is lying in the Punjab chief minister’s secretariat, but it seems the Pakistan Muslim League-Nawaz’s [PML-N] government in Punjab wants another Gojra-like incident to take place in Kot Addu,” he said, adding that it was curious that all major violence against Christians usually takes place when the PML-N is in power in the province.

Qayyum said that he had taken up the matter with the PPP leadership.

“It’s a case of blasphemy, and the culprits should have been rounded up under Section 295-A,” he said. “I have contacted Farahnaz Ispahani, the political adviser to President Asif Zardari, and she has assured me of the federal government’s support in this matter.”

He added that stern action against local police and administrative authorities was necessary to set an example for others.

Report from Compass Direct News