Report Card on State Finances

Robert CarlingFebruary 19, 2017RR23

The Commonwealth government’s perilous financial position is well known, but the finances of state government also warrant our attention. In aggregate, since plunging heavily into deficit after 2007, the states’ fiscal position has improved markedly in recent years, marked by a return to net operating surpluses, much reduced fiscal deficits, and stabilization of net debt. Growth of operating expenses has been held below revenue growth. However, the aggregates mask major differences among the states. New South Wales was clearly in the strongest fiscal position in 2016, while Western Australia exhibited a sharp deterioration in several years leading up to 2016 and now suffers one of the weakest fiscal positions of all the states. The trend in other states was generally one of improvement in the three years to 2016, but South Australia, Queensland and Tasmania continue to exhibit weaknesses that set them apart from the stronger positions of New South Wales and Victoria. No state is in a position to be complacent and all of them need to keep a tight rein on operating expenses. Even New South Wales, as the strongest state, is vulnerable to an unexpected decline in property-related tax revenue and to risks associated with implementation of the state’s large infrastructure program.

Related Commentary

The mental health system may be making us sicker
Steven SchwartzApril 6, 2026CANBERRA TIMES

Australia has a mental health crisis, but not the one we think. Despite decades of...

Housing negative gearing tax
Reducing the discount would likely not have any lasting impact in lowering house prices
Robert Carling, Michael StutchburyMarch 21, 2026CANBERRA TIMES

Anyone watching the smoke signals from Canberra knows that moves are afoot to try and...

Alarm bells ringing on more interest rate pain
Michael StutchburyMarch 18, 2026DAILY TELEGRAPH
Australians were losing faith that the combination of Labor’s economic policies and the RBA monetary...

• Subscribe

Subscribe now and stay in the loop with our giving appeals, event alerts, newsletters and research updates.

We are always pleased to hear from you. If you have any questions or feedback, please contact us here: