Geographical inequalities and sub-national funding in Australia
This case study is the result of a review of intergovernmental transfers and other sub-national funding in Australia and to what extent these funding streams are designed and able to reduce geographical inequalities.
The long-standing and entrenched nature of horizontal equalisation within the Australian Federation has arguably contributed to the relative absence of strong grievances fuelled by spatial disparities. In this regard, the Australian system can be seen as a relatively successful model for reducing geographic inequalities.
The aim of this review is to draw out lessons for England, and the UK more broadly, in terms of how funding mechanisms can be used to better address spatial inequalities. The review is mostly based on desk research of academic and policy publications, complemented by interviews with several key informants in Australia, including academic experts and policymakers at the federal and state level.
The review highlights several key issues relevant for the UK and English context, including the key role of horizontal fiscal equalisation in mitigating geographical inequalities, the importance of robust institutions protecting sub-national government autonomy, and bi-directional coordination and engagement between national and sub-national governments.