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The fiscal imbalance in Australia is the disparity between the revenue generation ability of the three levels of governments in Australia relative to their spending obligations; but in Australia the term is commonly used to refer more specifically to the vertical fiscal imbalance, the discrepancy between the federal government's extensive capacity to raise revenue and the responsibility of the ...
The discussion of fiscal imbalance and equalisation was of particular importance in the drafting of the new Iraqi constitution. It was a sticking point for the drafting process—with the oil rich regions seeking to minimise the reallocation of revenue while other regions sought to maximise equalisation payments.
The vertical fiscal imbalance, alongside section 96 of the Australian Constitution has effectively extended the Commonwealth's powers beyond those enumerated in section 51 of the Australian Constitution and other explicit enumerations of Commonwealth legislative power (e.g. section 52 and section 90).
The constitutional scheme as well as judicial interpretations have created a vertical fiscal imbalance, whereby the Commonwealth has the revenue-raising abilities while the States have major spending responsibilities. For example, primarily, Australian states fund schools and hospitals.
Many public policy experts prefer the notion of "vertical fiscal asymmetry" —coined and conceptualised by Sharma (2011) [5] —over its alternative "vertical fiscal imbalance" because the former is relatively neutral [6] [7] and highlights the unfeasibility of a balance or symmetry purporting to eliminate any kind of vertical fiscal asymmetry ...
The government budget balance, also referred to as the general government balance, [1] public budget balance, or public fiscal balance, is the difference between government revenues and spending. For a government that uses accrual accounting (rather than cash accounting ) the budget balance is calculated using only spending on current ...
The federal government uses a fiscal year from Oct. 1 to Sept. 30, so companies doing a lot of business with the government may adopt a similar fiscal calendar.
It was acknowledged that this would create a situation where the Commonwealth would raise much more money than it could spend, whereas the States, being still responsible for most areas of law and of social infrastructure, would need to spend much more money than they could raise (the problem now known as "vertical fiscal imbalance"). Although ...