Australian Government, 2005–06 Budget

Estimates of revenue

Total revenue

Total revenue for 2005‑06 is expected to increase by $11.8 billion, an increase of 5.8 per cent on estimated revenue in 2004-05. Of this, taxation revenue is expected to increase by $11.1 billion (5.8 per cent) and non-taxation revenue is expected to increase by $779 million (6.3 per cent).

The revenue estimates for 2004‑05 and 2005‑06 are provided in Table 4. Descriptions of the revenue heads are provided in Appendix B.

Table 4: Australian Government general government revenue

Table 4:  Australian Government general government revenue

  1. Consistent with GFS reporting standards, excludes fringe benefits tax collected from Australian Government agencies (estimated at $390 million in 2004‑05 and $400 million in 2005-06).

Revenue estimates by revenue head

Income taxation revenue
Individuals and other withholding taxation

Estimated revenue from individuals for 2004-05, 2005‑06 and the projection years is provided in Table 5. Revenue from individuals is estimated to increase by $3.7 billion (3.4 per cent) in 2005-06, reflecting the impact of stronger employment and solid growth in the incomes of small unincorporated businesses and personal investors, partly offset by personal tax cuts.

Table 5: Individuals and other withholding taxation revenue

Table 5:  Individuals and other withholding taxation revenue

  1. Medicare levy for 2003‑04 is an estimate.

Gross income tax withholding

Gross income tax withholding revenue is expected to increase by $3.2 billion (3.2 per cent) in 2005-06. The increase reflects the flow on effect of stronger expected revenue in 2004‑05 and the impact of stronger estimated employment and slightly stronger wage growth in 2005-06. Personal tax cuts from 1 July 2005 dampen these effects on revenue.

Gross other individuals

Gross revenue from other individuals is expected to increase by $1.8 billion (7.6 per cent) in 2005-06. The increase reflects stronger expected income from dividends and small unincorporated businesses, partly offset by personal tax cuts.

Income tax refunds for individuals

Refunds for individuals are expected to increase by $1.3 billion (9.5 per cent) in 2005-06, reflecting the effect of increases in estimated revenue from gross income tax withholding and from other individuals in 2004-05. Partly offsetting this, a reassessment of the relationship between prior year revenue and current year refunds to better reflect recent outcomes has the effect of reducing refunds and increasing revenue over the forward estimates period.

Medicare levy

Revenue from the Medicare levy is expected to increase by around $360 million (6.0 per cent) in 2005-06. Movements in revenue from the Medicare levy are generally consistent with growth in revenue from personal income taxes.

Companies and other related income taxation

Estimated revenue from companies for 2004-05, 2005‑06 and the projection years is provided in Table 6.

Table 6: Companies and other related income taxation revenue

Table 6:  Companies and other related income taxation revenue

Company income taxation

Company taxation revenue is expected to increase by $7.4 billion (18.3 per cent) in 2005-06. The increase is largely the result of a stronger outlook for company profits in 2005-06. This mainly reflects the higher export prices that companies have secured for exports of coal and iron ore in the last quarter of 2004‑05 and through 2005-06.

Superannuation funds taxation

Taxation revenue from superannuation contributions and earnings income is expected to decrease by $20 million (0.4 per cent) in 2005-06. This decrease reflects the flow-on effect of a lower expected outcome for superannuation contributions and earnings taxation in 2004‑05, partly offset by higher expected earnings growth in 2005-06.

Superannuation surcharge

Revenue from the superannuation surcharge is expected to decrease by $50 million (3.9 per cent) in 2005‑06, reflecting the reduction in the surcharge rate to 12.5 per cent in 2004-05.

While the abolition of the surcharge from 1 July 2005 will result in zero revenue collected from contributions after that date, allowance has been made for some ongoing revenue from the surcharge over the forward estimates period to recognise liabilities relating to contributions made before 1 July 2005.

Petroleum resource rent tax

Estimated revenue from the petroleum resource rent tax is expected to decrease by $110 million (7.5 per cent) in 2005-06, reflecting lower than expected production of natural gas and crude oil.

Excise and customs revenue

Estimates for 2004-05, 2005‑06 and the projection years are provided in Table 7 for excise and customs revenue.

Table 7: Excise and customs revenue

Table 7:  Excise and customs revenue

Excise duty

In 2005-06, revenue from excise duty on petroleum and other fuel products is expected to increase by $360 million (2.6 per cent). The increase results from higher estimated revenue from diesel fuel ($320 million), reflecting an increase in expected activity in agriculture and mining; and from higher estimated revenue from unleaded petrol excise ($40 million), reflecting stronger demand from the energy and transport sectors.

Revenue from crude oil excise is expected to decrease by $30 million (4.6 per cent) in 2005-06, reflecting the effect of a lower expected crude oil price in $A.

Other excise revenue is expected to increase in 2005‑06 by $150 million (1.9 per cent), reflecting moderate increases in expected demand for spirits and other alcoholic beverages, with demand for tobacco and beer expected to move in line with population growth.

Customs duty

Customs duty revenue is expected to decrease by $643 million (11.3 per cent) in 2005-06, reflecting the impact of a number of policies designed to increase trade between Australia and the rest of the world. These policies include the measures announced in this Budget, noted above, as well as the impact of tariff reductions for passenger motor vehicles and textiles, clothing and footwear from 1 January 2005, and the effect of the Australia-United States Free Trade Agreement.

Indirect taxation revenue

Revenue estimates for 2004-05, 2005‑06 and the projection years are provided in Table 8 for the various categories of sales tax. Information about the goods and services tax can be found in Budget Paper No. 3, Federal Financial Relations.

Table 8: Indirect taxation revenue

Table 8:  Indirect taxation revenue

Revenue from the wine equalisation tax is expected to increase by $10 million (1.4 per cent) in 2005-06, reflecting a slight increase in expected underlying demand.

Revenue from the luxury car tax is expected to increase by $10 million (3.3 per cent) in 2005-06, reflecting underlying demand conditions.

Other taxation revenue

Revenue estimates for fringe benefits tax, agricultural levies and other taxes in 2004-05, 2005‑06 and the projection years are provided in Table 9.

Table 9: Other taxation revenue

Table 9:  Other taxation revenue

Other taxation revenue is estimated to increase by $279 million (5.7 per cent) in 2005-06, largely reflecting increased estimated revenue from the fringe benefits tax.

Revenue from fringe benefits tax is expected to increase by $300 million (9.8 per cent) in 2005-06, reflecting the effect of slightly higher expected wage growth.

Revenue from agricultural levies, broadcasting licence fees and other levies and taxes for 2005‑06 is expected to be largely unchanged from 2004‑05 levels.

Non taxation revenue

Revenue estimates for 2004‑05 and 2005‑06 and the projection years are provided in Table 10 for the various categories of non-taxation revenue.

Table 10: Non-taxation revenue

Table 10:  Non-taxation revenue

Non-taxation revenue is expected to increase by $779 million (6.3 per cent) in 2005-06, largely reflecting:

  • increased interest revenue, largely reflecting higher estimated cash balances —underpinned by strong surpluses in 2004‑05 and 2005-06; and
  • increased dividends from the Reserve Bank of Australia, largely from higher than expected net interest income, and an increase in realised gains on foreign investments and foreign currency transactions.

Miscellaneous