EQUALISATION ENVIRONMENT 10 Although States can access similar revenue bases and have similar responsibilities in service provision, their innate capacities to raise revenue and cost of providing an average level of services differ because of differences in their economic, social and demographic characteristics. 11 Table 2 shows the major causes of differences in innate State fiscal capacities. It illustrates the extent to which each drives differences from an equal per capita GST distribution. For example, because: Western Australia can raise so much more per capita in mining royalties at average rates, other things being equal, it warrants $2 180 less per capita in GST; its capacity to raise revenue from most other tax bases is also above average, implying it requires less GST Western Australia needs to spend so much more per capita on delivering the average level of services, other things being equal, it requires $1 197 more per capita in GST the Northern Territory has very high costs of service provision, it needs $11 661 more per capita in GST to provide the average level of services; it also needs more GST ($337 per capita) because of its below average revenue raising capacity. 12 It is the net impact of all these pluses and minuses which determine a differential GST distribution. 13 In this review, data and evidence provided to us have established that there are significant differences in the innate fiscal capacities of States which, for equalisation to be achieved, warrant a distribution of GST revenue which also differs significantly from one based on State population shares.