How the States Manage Our Money


When it comes to the fiscal management of government coffers, Victoria has done the best job in the last year. That’s what Robert Carling from the Centre of Independent Studies (CIS) reckons. He has been comparing the spending of our governments for his latest paper “Tax, Borrow, Spend — How the States Compare“.

He talks about his findings in this edition of BTalk. Although states here are managing their budgets more prudently than those in the US, we are seeing an increase in spending and debt, which could be an issue if it continues.

Queensland has seen the biggest turnaround — with a huge jump in capital expenditure in the space of six years. It has moved from being the low tax state to taxing higher than the average. Does that mean they will struggle to meet the cost of the flood and cyclone recovery programs?

Here are the results of his analysis — showing the relative strength of WA and Victoria last year, but over the last few years Tasmania has been the clear leader.

Governmen’s need to invest to enable growth, of course, but Robert’s point is that whatever the investment strategy it needs to be undertaken in combination with prudent fiscal management. Are we sure our states are exhibiting that behaviour?

First published on CBS News

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