The Commission recommends how the revenues raised from the goods and services tax (GST) should be distributed to each state and territory to achieve horizontal fiscal equalisation, a central feature of the Australian federation.
The details of these references are usually negotiated between the Commonwealth, state and territory treasury departments before being formally issued by the Treasurer.
The recommendations are then considered at the annual meetings of the Treasurers of the Commonwealth, states and territories.
[3] On 31 March 2016, the commission received a reference to inquire into and report by 7 April 2016 on the per capita relativities to be used to distribute GST revenue among the states and the territories in 2016–17.
[5] The purpose of reviews is to determine the most appropriate methods and data for measuring the relative fiscal capacity of states and territories.