Abstract

Australia combines typically English political institutions with a federal constitution and institutions of American type and a system of constitutional modification based on the type of referendum used in Switzerland. The author frames the experience Australian fiscal federalism in this context, reconstructing the division of fiscal powers between the federal and state levels. After providing an overview of the Australian fiscal institutions, the author examines the causes and consequences of the close dependence of the individual states on transfers made by the federal government. The analysis therefore dwells on the incisive and complicated system of tax equalization among the states (and among local governments) that have arisen in Australia, especially since the 1930s. Finally, the author describes the institutions that Australia has developed to sustain the capacity of the federal system - which conserves and enhances diversity - to promote national objectives and priorities, and to respond to the challenges raised by globalization. The essay finishes with some concluding remarks.