PURPOSE 2 — EQUITABLE LEVEL OF SERVICES
14. The second purpose for which financial assistance is provided is ‘to improve
the capacity of local governing bodies to provide their residents with an equitable level of
services’. Although ‘equitable level of services’ is not specifically defined, in the context of
Section 6 of the Act we have interpreted it as referring to horizontal equalisation.
15. This interpretation is supported by the 1994 review which said the
Commonwealth’s notion of equity was that ‘Poorer communities or those where services
are more expensive to provide are seen as more deserving of Commonwealth funds.’ It also
concluded that the Commonwealth’s notion of equity was encapsulated within the concept
of horizontal equalisation. The general consensus among LGBs is that this purpose is about
16. The current arrangements attempt to implement equalisation using three
· Horizontal Equalisation;
· Effort Neutrality; and
· Other Grant Support.