Treasury
AusLink — redirection of funds from the Fuel Sales Grants Scheme
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | - | - | -265.0 | -270.0 |
The Government will cease the Fuel Sales Grants Scheme from 2006-07 and redirect funding to the new land transport infrastructure programme — AusLink. This funding will be allocated to improve roads in outer metropolitan, rural and remote areas.
See also the related expense measure AusLink — National Land Transport Network in the Transport and Regional Services portfolio.
Australian Capital Territory — Special Revenue Assistance
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | - | -14.5 | -14.9 | -15.2 |
The Government has decided that the ACT’s fiscal needs should now be considered in the same way as other States and Territories, that is, through the Commonwealth Grants Commission’s calculation of GST relativities. Accordingly, the Government will cease providing Special Revenue Assistance to the ACT from 2005-06.
The ACT will continue to receive funding to assist the ACT Government to meet the municipal costs flowing from Canberra’s role as the national capital.
Australian Competition and Consumer Commission — strengthening capacity to foster competitive, fair and informed Australian markets
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Competition and Consumer Commission | 24.0 | 8.4 | 7.1 | 7.2 |
| Related capital ($m) | ||||
| Australian Competition and Consumer Commission | - | - | - | - |
The Government will provide $46.7 million over four years and a $22 million equity injection in 2004-05 to enable the Australian Competition and Consumer Commission to effectively deal with an increased number of matters and maintain its levels of service delivery to the community.
The provision of an equity injection is a financial transaction within the general government sector and consequently has no direct impact on the fiscal balance.
Australian Energy Regulator
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Competition and Consumer Commission | 6.5 | - | - | - |
| Related capital ($m) | ||||
| Australian Competition and Consumer Commission | 1.9 | - | - | - |
The Government will provide $8.4 million in 2004-05 (including $1.9 million capital funding) to fund the establishment of the Australian Energy Regulator. The total cost of the Regulator in 2004-05 is expected to be $10.7 million, of which $2.3 million represents a transfer from existing funding of the Australian Competition and Consumer Commission.
The Regulator, expected to be established by 1 July 2004, will have initial responsibility for the economic regulation of wholesale electricity and transmission networks and key rule enforcement functions. The Regulator will exercise powers under an agreed new national energy legislative framework, and undertake the sector-specific regulatory functions previously exercised by the Australian Competition and Consumer Commission and the National Electricity Code Administrator.
The responsibilities of the Regulator are to be extended to include gas transmission by 30 June 2005 and distribution and retailing (other than retail pricing) by 2006, following development of an agreed national framework.
The Regulator will be a constituent part of the Australian Competition and Consumer Commission but will also operate as a separate legal entity.
The cost of the establishment and operation of the Regulator will be recovered from industry once an appropriate mechanism is established.
Future funding for the Regulator will be considered in the context of the 2005-06 Budget.
Australian Prudential Regulation Authority — strengthened capabilities
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Prudential Regulation Authority | 11.4 | 12.4 | 11.7 | 11.9 |
| Related revenue(a) ($m) | ||||
| Australian Prudential Regulation Authority | 7.4 | 14.4 | 11.6 | 11.9 |
| Related capital ($m) | ||||
| Australian Prudential Regulation Authority | - | - | - | - |
- A positive number for revenue indicates an increase in the fiscal balance.
The Government will provide $47.4 million over four years to the Australian Prudential Regulation Authority (APRA) to strengthen its supervisory capacity, principally in supervising large, complex and systemically important financial institutions. It will enable APRA to build up staff levels in front-line supervision and in specialist risk areas and to strengthen its capabilities as Australia’s statistical collection agency for the financial sector. This supports the Government’s commitment to increase public confidence in the Australian financial system.
The funding will also support other regulatory activities to strengthen the safety of superannuation funds and to assess whether individuals are ‘fit and proper’ to remain in the general insurance industry in view of the HIH Royal Commission’s findings.
Apart from funding for ‘fit and proper’ assessments, the cost of this measure will be recovered via increases in financial sector levies.
The Government will also provide an equity injection of $3 million in 2004-05, which will be returned to the Budget in the subsequent year. This is to cover a timing difference between expenses and the collection of superannuation trustee licensing fees announced by the Government on 28 October 2002.
The provision of an equity injection is a financial transaction within the general government sector and consequently has no direct impact on the fiscal balance.
Australian Securities and Investments Commission — enhanced enforcement activities and consumer protection and corporate sector regulation
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Securities and Investments Commission | 13.5 | 14.9 | 15.4 | 16.3 |
| Related revenue(a) ($m) | ||||
| Australian Securities and Investments Commission | 13.9 | 15.3 | 15.8 | 16.7 |
| Related capital ($m) | ||||
| Australian Securities and Investments Commission | - | - | - | - |
- A positive number for revenue indicates an increase in the fiscal balance.
The Government will provide $52.5 million over four years to the Australian Securities and Investments Commission (ASIC) to strengthen its ability to meet increased demand for its core operations, enhancing its enforcement activities and its capacity to protect consumers against investment scams.
The Government will also provide funding of $7.6 million over four years to support ASIC’s role in implementing reforms of Part 9 of the Corporate Law Economic Reform Programme (CLERP 9), to strengthen its surveillance and enforcement activities, and to ensure auditor compliance with auditing standards.
The cost of these initiatives will be offset by a $12 increase in the annual review fee for proprietary companies and efficiencies created by changes to, and expansion of, the fee collection system. This is the first increase in this fee since 1997.
The review fee, which is imposed under the Corporations (Review Fees) Act 2003, is payable by proprietary companies required to undertake an annual review of their company details against information provided by ASIC. The fee increase will take effect from 1 July 2004.
The Government will provide an equity injection of $11.3 million to ASIC in 2004-05 to address cumulative operating losses in 2003-04 and previous years. The losses resulted from increases in enforcement costs, demand for services (notably in the number of complaints received), and staff costs. The provision of an equity injection is a financial transaction within the general government sector and consequently has no direct impact on the fiscal balance.
Australian Taxation Office — taxation and superannuation compliance
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | 60.3 | 95.2 | 87.0 | 83.9 |
| Related revenue(a) ($m) | ||||
| Australian Taxation Office | 251.0 | 347.8 | 291.3 | 259.2 |
- A positive number for revenue for indicates an increase in the fiscal balance.
The Government will provide additional funding of $326.4 million over four years to the Australian Taxation Office to better educate taxpayers, raise the level of voluntary compliance with taxation obligations, and undertake additional compliance activities such as reviews and audits which will result in increased revenue.
The activities will focus on areas of: employer obligations; businesses with annual turnover of between $2 million and $100 million (in particular those with an annual turnover of more than $50 million where evidence indicates financial arrangements are becoming more complex); individual taxpayer obligations in the areas of capital gains tax, rental deductions and high risk refunds; leveraging compliance through tax agents; and superannuation.
Additional revenue in superannuation guarantee payments on behalf of employees will also be recouped and the majority of the 4.6 million ‘lost’ superannuation members’ records will be matched with Tax File Numbers for the purpose of re-attaching them to their entitlements. The return of these superannuation guarantee entitlements to the individuals’ superannuation funds will be reflected in increased administered expenses.
Australia-United States Free Trade Agreement — realising competition and financial sector integration benefits
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | 0.5 | 0.4 | 0.4 | 0.4 |
The Government will provide $1.7 million over four years to enable the Department of the Treasury to fulfil its commitments and obligations under the financial services and competition-related matters chapters of the Australia-United States Free Trade Agreement.
The additional resources will enable Australian officials to participate in ongoing consultation processes, including relevant working groups, to reduce restrictions and costs faced by Australians when attempting to access United States markets.
Commonwealth-State Financial Relations — information for the public
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | - | - | - | - |
The Government will provide $3 million in 2003-04 to the Department of the Treasury to deliver a communications package which will provide the public with information on Australian Government payments to the States and Territories.
Demographics — discussion paper
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | - | - | - | - |
The Government will provide $0.5 million in 2003-04 to the Department of the Treasury to fund the publication of the discussion paper on Australia’s Demographic Challenges, released by the Treasurer on 25 February 2004. The funding will also enable public consultations on the issues raised in the discussion paper to be undertaken in each State.
As part of the 2002-03 Budget, the Government released the Intergenerational Report 2002-03 which projected that, in the absence of policy measures being taken, total expenditure by the Australian Government would significantly exceed the amount raised in taxes in 40 years’ time, as a result of ageing and other factors.
Department of the Treasury — secretariat to the Review of Horizontal Fiscal Equalisation Methodology
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | 1.3 | - | - | - |
The Government will provide $1.3 million in 2004-05 to the Department of the Treasury for a secretariat to the Review of Horizontal Fiscal Equalisation Methodology.
The majority of the States and Territories, with the support of the Australian Government, have agreed to examine aspects of the Commonwealth Grants Commission’s methodology for Horizontal Fiscal Equalisation, and to do so while maintaining the underlying principles of equalisation.
East Asia — promoting economic security
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | 0.8 | 0.8 | 0.9 | 0.9 |
The Government will provide funding of $3.4 million over four years to enhance Australia’s efforts to promote economic growth and security in East Asia.
The initiative will increase Australia’s collaborative efforts with key partners in East Asia aimed at improving regional governance, strengthening financial systems and raising regional living standards. Funding has also been provided to host regular economic fora for discussion of medium-term macroeconomic challenges that will shape the region’s growth.
Financial Reporting Council — improved accounting and auditing standards-setting arrangements
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | 3.4 | - | - | - |
The Government will provide $3.4 million in 2004-05 as part of the implementation of Part 9 of the Corporate Law Economic Reform Programme (CLERP 9). These funds will support the Financial Reporting Council in its expanded role of oversighting auditor independence and the audit standard setting arrangements, the establishment of the Financial Reporting Panel and the reconstitution of the Auditing and Assurance Standards Board.
The Financial Reporting Panel will be established to provide a non-binding mechanism for the resolution of disputes between the Australian Securities and Investments Commission and companies, as an alternative to legal proceedings, in the application of accounting standards. The Auditing and Assurance Standards Board will be reconstituted to provide a statutory basis for auditing standards-setting.
Provision has also been made in the contingency reserve for the forward years, subject to the level of ongoing funding for this measure being determined in the 2005-06 Budget.
National Strategy for Consumer and Financial Literacy
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | - | - | - | - |
The Government will provide $0.8 million in 2003-04 for expenses incurred in the establishment of the National Consumer and Financial Literacy Taskforce.
The Taskforce will map and evaluate current consumer and financial literacy programs in Australia, identify any gaps or ways of working more effectively and develop a national strategy to raise the levels of consumer awareness and financial literacy in Australia.
Further information can be found in the press release of 23 February 2004 issued by the Minister for Revenue and Assistant Treasurer.
Oil recycling — new category of grant
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | 0.9 | 1.0 | - | - |
The Government has amended the Product Stewardship (Oil) Regulations 2000 to provide oil recyclers who produce blended light fuel oil with a new grant of 9.557 cents per litre of oil recycled, with an expected cost of $2.2 million over three years (including $0.3 million in 2003-04).
The new grant fully offsets the impact of changes that took effect from 1 February 2004, when support for this activity moved from concessional treatment under the excise system to delivery under the Energy Grants (Credits) Scheme. The new grant meets the Government’s intention that oil recyclers not be disadvantaged by the removal of the excise exemption and that an equivalent level of support for this oil recycling activity continues.
Refundable Film Tax Offset — extension to episodic television
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | - | 2.0 | 4.0 | 6.0 |
The Government will provide $12 million over three years from 2005-06 to extend the application of the existing Refundable Film Tax Offset to the production of television series.
The Refundable Film Tax Offset currently provides a rebate of 12.5 per cent of eligible film production costs in cases where qualifying Australian expenditure exceeds $15 million.
Small business annual payment and lodgement of GST — compensating the States for revenue forgone
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | 330.0 | - | - | - |
The Government will fully compensate the States for the revenue impact of the decision to allow taxpayers that are voluntarily registered for GST to pay and report GST annually. Compensation in 2004-05 will cost $330 million. Future compensation will be subject to further negotiation with the States, and provisions have been made in the Contingency Reserve.
This measure will reduce compliance costs for up to 740,000 small businesses and up to 30,000 non-profit organisations. This compensation will be provided to ensure that the Government receives the States’ agreement for this measure to proceed.
See also the related revenue measure titled Small Business — annual payment and lodgement in Appendix A of Budget Paper No. 3.
South Pacific economic governance and stabilisation
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Department of the Treasury | 2.3 | 1.8 | 1.9 | 1.9 |
| Department of Finance and Administration | 1.3 | 1.3 | 1.3 | 1.4 |
| Total | 3.6 | 3.1 | 3.2 | 3.3 |
The Government will provide $14.9 million over five years (including $1.7 million in 2003-04) to the Departments of Finance and Administration and the Treasury to fund the establishment and operation of their Pacific Support Units.
Funding of $9.2 million will enable the Department of the Treasury to provide analytical, policy and administrative support to Treasury officers undertaking deployment in the Pacific region as part of the whole-of-government approach to utilise Australian expertise to improve governance, security and economic reform in Pacific Island countries.
Funding of $5.7 million will enable the Department of Finance and Administration to provide effective support to in-country operators in Papua New Guinea and other Pacific Island countries in the form of policy and administrative support, budget technical assistance and monitoring, and reporting and financial management assistance.
In-country resources from both agencies, which currently form the core of the economic and budget stabilisation team in the Solomon Islands and Papua New Guinea, are funded by Australian Agency for International Development.
State, territory and local government organisations — transitional grants as compensation for lost access to a fringe benefits tax concession
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | 23.9 | 19.4 | 19.5 | 19.5 |
The Government will provide transitional grants totalling $80 million over four years to certain organisations which had been endorsed by the Commissioner of Taxation as public benevolent institutions but were found to be ineligible for this status following a recent comprehensive review by the Australian Taxation Office. The funding will support these organisations in recognition of the loss of the fringe benefits tax (FBT) exemption of up to $30,000 of the grossed up taxable value per employee which these organisations had been accessing as public benevolent institutions.
The transitional grants recognise the potential impact on State and Territory and local governments of increases in employment costs for around 350 organisations.
The transitional grants will include support for certain public ambulance services that had been accessing an FBT exemption of up to $30,000 of grossed up taxable value per employee as public benevolent institutions. A recent court decision found that some of these organisations were ineligible for this concession. The Government subsequently announced that it would make an FBT exemption of up to $17,000 of grossed up taxable value per employee available to all public ambulance services, consistent with that available for public and not-for-profit hospitals. The grants will support organisations in the transition to the lower FBT exemption.
The Government will also provide additional funding of $2.3 million over four years to the Australian Taxation Office to administer the grants described above.
See revenue measure Fringe Benefits Tax — ensuring concessions are available for public ambulance services in the Treasury portfolio.
Superannuation — new qualifying criteria for Government Co-contribution Scheme
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | 45.0 | 50.0 | 50.0 | 50.0 |
The Government will broaden the eligibility criteria for the Superannuation Co-contribution Scheme for low-income earners, at a cost of $195 million over four years.
The broadened eligibility criteria replace the existing requirement that eligible participants receive employer superannuation contributions with a requirement that at least 10 per cent of an individual’s income is earned as an employee. For example, this will include people who earn less than $450 per month and are not eligible for employer superannuation support.
Further information can be found in the press release of 14 March 2004 issued by the Minister for Revenue and Assistant Treasurer.
See also the related expense measure titled Superannuation co-contribution implementation campaign in the Treasury portfolio.
Superannuation co-contribution implementation campaign
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Taxation Office | 8.2 | - | - | - |
The Government will provide $8.2 million in 2004-05 for the expansion of the Australian Taxation Office’s communication and marketing campaign to reach and inform eligible recipients of the Superannuation Co-contribution Scheme.
See also the related expense measure titled Superannuation — new qualifying criteria for Government Co-contribution Scheme for the Australian Taxation Office in the Treasury portfolio.
Superannuation Complaints Tribunal — relocation
| 2004-05 | 2005-06 | 2006-07 | 2007-08 | |
|---|---|---|---|---|
| Australian Securities and Investments Commission | 0.8 | 0.3 | 0.3 | 0.3 |
| Related revenue(a) ($m) | ||||
| Australian Prudential Regulation Authority | 0.8 | 0.3 | 0.3 | 0.3 |
- A positive number for revenue indicates an increase in the fiscal balance.
The Government will provide $1.7 million over four years to fund expenses associated with leasing new premises for the Superannuation Complaints Tribunal following expiry of its current lease.
The Tribunal is funded by levies on superannuation funds collected by the Australian Prudential Regulation Authority under the Financial Institutions Supervisory Levies Collections Act 1998. From 1 July 2004, these levies will be adjusted to offset the costs associated with fitting-out and leasing the new premises.