That pesky section 96


Treasurer has stick to keep states in line
David Uren 23 December 2010 AFR

Leading state tax expert Neil Warren said the commonwealth simply had to repeat the strategy it had used to seize income-taxing powers from the states in 1942, when it resolved to reduce grants to the states by one dollar for every dollar of income tax they raised.
“The states challenged that in the High Court in 1946 and lost. Section 96 of the Constitution says the commonwealth can do whatever it likes with its grants to the states at its discretion and there is nothing the states can do about it,” Professor Warren said.

[War is the health of the commonwealth!]


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