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Commonwealth Grants Commission - 16 Assessment of Own-Source Revenues (FAG) Site Search About CGC | Contact Us | Employment Home Employment Opportunities State Finances Inquiries Method Review Other Inquiries Media Releases 2001 Update Report 2002 Update Report 2003 Update Report 2005 Update Report 2006 Update Report 2007 Update Report Update Report Relative Fiscal Capacities of the States Working Papers 2008 Update Report Annual Reports Distribution Model: A Mathematical Presentation Quality Assurance Plan Report of the Indigenous Funding Inquiry 2001 Report on Indian Ocean Territories 1999 Report on Norfolk Island 1997 Report on the Operation of the Local Government (Financial Assistance) Act 1995 Home > State Finances Inquiries > 2007 Update Report > Working Papers > 16 Assessment of Own-Source Revenues (FAG) 16 Assessment of Own-Source Revenues (FAG) SECTION 3 Assessments of own-source revenues — FAG relativities 1 Section 3 summarises the assessment results for each category of own‑source revenues for the FAG relativities. 2 Table 1 shows the average and actual revenues per capita for each category for the five years of the assessment period. 3 Table 2 shows the average and assessed revenues per capita for each category for the five years of the assessment period. Assessed revenues reflect the effect of advantages and/or disadvantages in raising revenue — revenue raising disabilities. 4 Table 3 shows revenue raising capacity ratios for each category. Revenue raising capacity ratios compare each State's capacity to raise revenue given its revenue raising disabilities. Revenue raising capacities ratios are the ratio of a State's assessed per capita revenue to the standard revenue. Equivalently, they are the ratio of a State's revenue base per capita to the Australian revenue base per capita. Table 3 also shows the percentage contribution of the average revenue for each category to total own-source revenue, as a guide to the importance of the revenue raising capacity ratios for that category in shaping the overall per capita relativities. 5 Table 4 shows implied revenue raising effort ratios. They are the ratio of a State's actual revenue to its assessed revenue. Actual revenues reflect revenue raising disabilities and differences in policies. Abnormal receipts, such as special dividends required of State-owned enterprises, affect the apparent effort of the State that receives them and reduces the apparent effort of other States (because they increase average revenue and assessed revenues). 6 Following the summary tables are the assessment results for the eight categories of own source revenue for which assessments for financial assistance grant (FAG) relativities differ from assessments for GST relativities. The details include: · a description of the category; · a short description of the assessment method; · the results for 2005‑06 and comments on them; · the contribution of the assessment to grant shares; · the changes to the assessment since the 2006 Update and their effect on the distribution of FAG revenue and health care grants[1]; and · the results for all years of the assessment period. 7 The analysis of effects of the assessment on FAG revenue distribution uses an illustrative grant pool. The size of the illustrative grant pool changes from one inquiry to the next. To ensure that only the effects of changes in Commission assessments are shown, the analysis measures all grant effects using the 2006‑07 pool of FAG revenue and health care grants of $31 449.1 million from the Commonwealth of Australia's Mid‑Year Economic and Fiscal Outlook. Table 1 Actual and average revenues per capita — FAG relativities Table 1 Actual and average revenues per capita — FAG relativities (continued) Table 1 Actual and average revenues per capita — FAG relativities (continued) Table 1 Actual and average revenues per capita — FAG relativities (continued) Table 2 Average(a) and assessed revenues per capita — FAG relativities Table 2 Average(a) and assessed revenues per capita — FAG relativities (continued) Table 2 Average(a) and assessed revenues per capita — FAG relativities (continued) Table 2 Average(a) and assessed revenues per capita — FAG relativities (continued) Table 3 Revenue raising capacity ratios(a) — FAG relativities Table 3 Revenue raising capacity ratios(a) — FAG relativities (continued) Table 3 Revenue raising capacity ratios(a) — FAG relativities (continued) Table 3 Revenue raising capacity ratios(a) — FAG relativities (continued) (a) The ratio of assessed revenue per capita to average revenue per capita. Table 4 Revenue raising effort ratios(a) — FAG relativities Table 4 Revenue raising effort ratios(a) — FAG relativities (continued) Table 4 Revenue raising effort ratios(a) — FAG relativities (continued) Table 4 Revenue raising effort ratios(a) — FAG relativities (continued) (a) The ratio of actual revenue per capita to assessed revenue per capita. [1] Hereafter described as FAG revenue. 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