General Revenue Grants to the States and Territories are budgeted at $68 billion in 2018-19, and at $291 billion over the forward estimates. It is the single largest category of Commonwealth expenditure.
General Revenue Grants to the States and Territories represents 13.8% of all Commonwealth expenditure and 3.6% of GDP.
These figures do not include the additional funding foreshadowed by the Government in July 2018 as part of its proposed reforms to the GST.
It is not possible for the Commonwealth to unilaterally change the distribution of the GST receipts to the States and Territories, though it is open to the Commonwealth to offer to ‘top up’ the GST payments from other sources of Commonwealth revenue (and this is what the Commonwealth has recently offered.)
Accordingly, the General Revenue Grants model offers options to increase funding to the States and Territories, but no options to decrease it. Given the longstanding mismatch between the obligations of States to deliver services, and their – admittedly self imposed - limited capacity to raise the necessary revenue, this is as it must be. The increments are expressed as a percentage increase on the currently budgeted distributions.