Revenue

Total accrual revenue in 2005-06 is expected to be $4.1 billion higher than forecast at the 2005-06 Budget, comprising $1.6 billion in non-tax revenue and $2.5 billion in tax revenue, driven by the effect of a higher than expected company tax revenue outcome in 2004-05, and stronger than expected employment growth. The increase in non-tax revenue largely reflects Telstra’s special dividend.

Policy decisions since Budget have reduced revenue by $81 million in 2005-06 and $129 million in 2006-07. Major policy measures reducing revenue over the four year period 2005-06 to 2008-09 include:

• $26.5 million in 2005-06 ($63 million over four years) from additions to the listing of prescribed private funds which will assist in promoting private philanthropy; and
• $3.5 million in 2005-06 ($59 million over four years) owing to changes to market-linked and other life‑expectancy income streams which will provide retirees with smoother and more stable income payments and a greater degree of certainty with respect to pension planning.

A full list of revenue measures announced since the 2005-06 Budget is provided at Appendix A.

Detailed Australian Government general government sector revenue estimates for 2005-06, compared with the estimates published in the 2005-06 Budget, are provided in Table 7. ¹ Detailed cash estimates are listed in Table F3 (Appendix F).

Table 7: Australian Government general government sector revenue

Total taxation revenue in 2005-06 is expected to be $2.5 billion higher than forecast at the 2005-06 Budget. The upward revision has been driven by higher expected revenue from wage and salary earners and companies, and reflects the effect of a higher than expected company tax revenue outcome in 2004-05, and stronger expected employment growth.

Estimated revenue from gross income tax withholding for 2005-06 has increased by $890 million since the 2005-06 Budget, reflecting the flow-on effects of stronger than expected employment growth in 2004-05 and continuing strong employment growth in the first quarter of 2005-06.

Company taxation revenue in 2005-06 is expected to be $700 million higher than the 2005-06 Budget estimate, largely as a result of a higher than expected outcome in 2004-05.

Higher than expected oil prices and the effect of new fields on petroleum production have led to increases in expected revenue from petroleum resource rent tax, which has been revised up by $780 million in 2005‑06 since the 2005-06 Budget, partly offset by the negative impact higher oil prices have had on oil‑related excises which have been revised down by $480 million.

Expected revenue from other taxes has increased by $594 million since the 2005-06 Budget, principally as a result of a change in the accounting treatment of the passenger movement charge and the import processing charge from non-taxation revenue.

Non-taxation revenue in 2005-06 is expected to be $1.6 billion higher than the 2005-06 Budget estimate, including a $774 million increase in special dividends announced as part of the implementation of Telstra’s capital management programme and a $412 million increase in interest received by the Australian Office of Financial Management on term deposits.

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¹ For a description of the revenue heads, refer to Appendix B of Budget Statement 5, Budget Paper No.1, Budget Strategy and Outlook 2005-06.