Australia has a long history of aiming toward equal opportunity across the country. This aim is formally embodied in the principle of horizontal fiscal equalisation (HFE) administered through the establishment of the Commonwealth Grants Commission in 1933 during the Great Depression— primarily designed to compensate state and territories which have a lower capacity to raise revenue. Australia's style of HFE is unique among Organisation for Economic Co-operation and Development (OECD) economies with its aim of equalising states' fiscal capacities to deliver the necessary public services through the redistribution of federal taxes. Today, the majority of the distributed funds are the revenues raised from the broad-based consumption Goods and Services tax introduced in 1999.
Nevertheless, what is well recognised is that living standards across Australia are not equal. People in regions away from the capital cities generally have lower incomes, poorer health outcomes, less access to services, and fewer opportunities for their children. Many factors contribute to these discrepancies, and they can reinforce each other to create a spiral of disadvantage.
Still in the face of this some communities are managing to defy those multiple barriers and improve the outlook for their regions. This inquiry report looks at how inequality in, and between, the regions, can be reduced and, in particular, how we can learn from those successes in Australia and possibly overseas.