New South Wales used to be Australia’s economic engine. Now, it’s set to receive equalization.
New South Wales (NSW), with a third of Australia’s population and its largest financial centre, Sydney, was once the economic engine of the country. But next year, the state will receive $1 billion more in funding as part of national equalization—increasingly, NSW is a “have-not” state.
The rapid rise of resource revenues in the frontier territories, along with slower growth in the country’s southeast, have contributed to the imbalance. It’s a familiar story for Canadians: Ontario, with 38 per cent of the population and the country’s main financial centre, tipped into “have-not” status in late 2008. And much like some politicians in Western Canada, leaders in Queensland and Western Australia aren’t pleased about the increasing burden of NSW and Victoria (the latter, with a quarter of the country’s population, has long been the country’s greatest recipient).
Upon hearing his state will only receive 93 cents of every GST dollar it collects next year, Queensland Treasurer Andrew Fraser accused the southeast of “burglary.” Western Australia, meanwhile, is getting only 72 cents per dollar, because it produces 36 per cent of the nation’s exports and is booming. It can afford to share, said the Commonwealth Grants Commission in its annual report.