Some Labor states would rather rob the poor

And that is reflected in the Grants Commission's latest assessment, which reduces their share of the 2006-07 GST pool by 1.1 per cent and 1.5 per cent respectively, from what they will get from the 2005-06 pool.

Indeed, if the distribution of GST revenues in 2006-07 were to be made on the basis of the assessed revenue-raising capacities and expenditure disabilities for 2004-05 (the latest year for which data are available) alone - rather than, as the Grants Commission's terms of reference require, on the average of these relativities for the five years from 2000-01 through 2004-05 - then Queensland and WA would also be net contributors to the GST pool. Assuming the resources boom lasts for another two or three years, Queensland and WA probably will be net contributors after the boom has peaked.

The redistribution (over many years) of revenues collected by the Federal Government in accordance with the Grants Commission's principles is one of the reasons why the differences in living standards - including access to services such as education and health - are much smaller between, say, Tasmania and NSW than between, say, Alabama or Mississippi and Connecticut or Vermont in the United States, or between Newfoundland and Alberta in Canada.

In that sense, the Grants Commission's principles are part of the glue that holds the Australian federation together. It is thus both surprising and disturbing once again to hear Labor politicians, especially from Australia's richest states, suggesting that these principles should be jettisoned.