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The Primacy of Politics: Intergovernmental Fiscal Relations in the UK and Australia

Interest in Barnett formula reform is on the rise again, particularly because of changes in the parties in power in the devolved governments of Scotland and Wales, and the tighter public spending heralded by the recent Comprehensive Spending Review. This article looks at whether, and to what extent, the introduction of an alternative fiscal allocation system would remove the primacy of politics from the UK’s resultant intergovernmental fiscal relations, through examination of the Australian experience, especially the role of Special Purpose Payments.