SUPPLEMENTARY SOUTH AUSTRALIAN SUBMISSION ON NEW ISSUES FOR
THE 2013 UPDATE
This submission provides South Australia’s views on:

the population section of the Commonwealth Grants Commission (the
Commission) Staff Discussion Paper on New Issues for the 2013 Update
(CGC 2012-02-S);

the comparability of State natural disaster relief expenses; and

the proposed treatment of two Commonwealth payments published in the
Australian Government’s final budget outcome 2011-12 that commenced in
2011-12.
1. 2011 Census
Estimated resident population (ERP)
South Australia acknowledges the problem that such a large intercensal discrepancy
will create for the Commission for the 2013 Update.
Three potential options are put forward in the New Issues paper to handle the
discrepancy issue:
1. Use ABS published estimates of population levels in all assessments
2. Use the ABS published estimates of population growth and 2011 estimates to
derive population levels, and using this population series in all assessments
3. Use a mixed model, using the derived estimates for capital assessments,
where population change is the major driver, but using published population
levels in all other assessments
South Australia concurs with the Commission’s long-standing position of preferring to
use Australian Bureau of Statistics (ABS) data rather than being in the business of
producing its own alternative estimates.
However, it is acknowledged that given the importance and sensitivity of population
estimates on the distribution of the GST, action should be taken to reflect anomalies
that are materially significant.
In the New Issues paper, the options put forward assume that the ABS is not
prepared to rebase population estimates and that the intercensal error is purely
attributable to the 2006 Census. Based on these assumptions the Commission has
proposed a derived series (Option 2) that effectively adjusts the 2006 ERP by the
intercensal error and uses the components of growth to arrive at the June 2011 ERP.
The ABS publication Australian Demographic Statistics, March 2012 (released on
27 September 2012) stated:
The ABS is proposing to treat the 2006-2011 intercensal error in the final
rebasing differently to the methodology used for preliminary rebasing, and
historically for other rebasing periods.
The current proposal for final ERP (to be released 20 June 2013) is for the
2006-2011 intercensal error to be evenly distributed over a 20 year period
back from June 2011 to September 1991. This will result in an historical
revision to part of the ERP series at the national, state and territory and substate levels.
The ABS treatment will be finalised in late 2012 with further details to be
released in Australian Demographic Statistics, cat. No. 3101.0, on 18
December 2012.
Given the circumstances, South Australia supports the use of derived population
estimates as outlined in Option 2 in the New Issues paper. However, we also
encourage the Commission to consider deriving population estimates by evenly
distributing the intercensal error over a longer, 10 to 20 year, time frame.
Disaggregated ERP
South Australia supports the Commission’s position of using 2011 Census based
data where available and using the 2011 Indigenous State ERP.
For sub-State Indigenous estimates, South Australia suggests that the 2006 Census
sub-State Indigenous population distributions should be used but the sub-State
population estimates should be rebased to be consistent with the 2011 Indigenous
total State ERPs.
South Australia supports the broader recommendation that the Commission mix 2011
and 2006 census based data to estimate demographic structures of States.
2. The comparability of state natural disaster relief expenses
South Australia notes that that the March 2012 Commonwealth Department of
Finance and Deregulation review of State insurance arrangements identified that the
insurance arrangements of the Northern Territory and Tasmania were not considered
appropriate. These States have been asked to seek market quotations and to
perform cost-benefit analysis to determine what appropriate insurance arrangements
would be.
The report noted the failure to clearly define or quantify essential public assets and
that most States assumed, explicitly or implicitly, that all their assets were included
as essential public assets.
South Australia agrees with the Commission’s proposal to not adjust the expenses of
Tasmania or the Northern Territory for 2010-11 because neither State would have
been likely to receive a payout in 2010-11.
The Commission notes that no adjustments will be required in later years if Tasmania
and the Northern Territory implement standard arrangements in the future. Should
they not, and they are likely to have received a payout in the relevant year, then it is
South Australia’s view that notional annual insurance premiums should be added and
notional insurance payouts should be netted off.
In relation to essential public assets and different levels of assistance the
Commission notes that it is too early to know whether the lack of proper definition
and quantification of essential public assets affect the comparability of the expenses.
As the Commission has not undertaken the necessary work, South Australia
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supports the recommendation that the Commission should make no changes to the
assessment for the differences in definition and quantification of essential public
assets.
3. Industry and Indigenous skill centres
South Australia supports the recommendation that payments for Industry and
Indigenous skill centres are non-impacting on the relativities because the payment is
passed on to third parties and do not create a State asset.
4. Mission Beach safe anchorage
South Australia supports the recommendation that the payment for Mission Beach
safe anchorage be treated as affecting the relativities as the payment relates to
planning, public safety or community development which are normal State–type
services for which the Commission makes assessments.
South Australia Department of Treasury and Finance
October 2012
Contact Officers:
Katrina Ball
Director, Intergovernmental Relations
08 8226 9698
Katrina.Ball@sa.gov.au
Mark Collins
Principal Economic Analyst,
Intergovernmental Relations
08 8226 3833
Mark.Collins@sa.gov.au
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