The revenue estimates for 2009‑10 to 2011‑12 are constructed using the outcomes for 2008‑09, information on revenue collections in the year to date and the revised economic forecasts for 2009‑10 to 2011‑12. Revenue estimates for the projection years, 2012‑13 to 2013‑14, are based mainly on underlying trends in economic parameters.
In 2009‑10, total revenue is expected to decrease by $4.7 billion from 2008‑09, a fall of 1.6 per cent. Driving this decrease is an 11.6 per cent ($7.1 billion) fall in company tax revenues and an 11.7 per cent ($3.8 billion) fall in gross other individuals' tax revenues.
In 2010‑11, total revenue is expected to rise by $27.6 billion from 2009‑10, continuing to increase in 2011‑12 and over the remaining projection years, in line with the growth in nominal economy.
Individuals income and other withholding tax revenue
Table 6: Individuals' income and other withholding taxation revenue
Gross income tax withholding
In 2009‑10, estimated revenue from gross income tax withholding (ITW) is expected to increase by $2.9 billion, growth of 2.5 per cent, on the 2008‑09 outcome. This principally reflects growth in employment with modest wage growth, partially offset by the effect of personal income tax cuts.
In 2010‑11, ITW revenue is expected to grow more quickly, by $10.7 billion (8.9 per cent), on the back of strong employment and wage growth forecasts. In 2011‑12, the strong growth in ITW revenue is forecast to continue, with an increase of $13.0 billion or 9.9 per cent, as the strength in the labour market continues.
Over the projection period, ITW revenue growth is expected to moderate slightly as employment and wage growth largely return to trend by 2013‑14.
Gross other individuals
Revenue from gross other individuals is expected to decrease by $3.8 billion (11.7 per cent) in 2009‑10, reflecting weaker‑than‑anticipated collections in the December and March quarters.
In addition, the sharp fall in property income and capital gains realised during 2008‑09 also contributed to the downward revision of revenue from gross other individuals.
In 2010‑11 and 2011‑12, revenue from other individuals is expected to increase by $3.0 billion (10.6 per cent) and $4.2 billion (13.4 per cent), respectively. This reflects the strong growth forecast for nominal GDP in 2010‑11 and 2011‑12 resulting in tax instalments from unincorporated businesses' income increasing markedly.
In the projection years, other individuals' revenue is expected to grow by 9.7 per cent and 7.7 per cent in 2012‑13 and 2013‑14 respectively, supported by an increase in income from unincorporated businesses and capital gains.
Income tax refunds for individuals
Refunds for individuals are expected to increase by $1.6 billion (6.6 per cent) in 2009‑10, reflecting the improved outlook for the labour market and the weakness in capital gains during the downturn. In 2010‑11 individuals' refunds are expected to remain similar to the 2009‑10 estimate.
Individuals' refunds over the projection period largely follow individuals' income tax payments, growing throughout the period.
Fringe benefits tax
Revenue from fringe benefits tax (FBT) is expected to increase by $90 million (2.5 per cent) in 2009‑10, in line with employment and wage growth.
FBT is expected to increase by $340 million (9.3 per cent) in 2010‑11 and by $180 million (4.5 per cent) in 2011‑12, with strong wage and employment growth.
Growth in FBT in the projection years is 6.9 per cent and 5.6 per cent in 2012‑13 and 2013‑14 respectively. This reflects a return to trend in both employment and wage growth.
Company and other related income taxation revenue
Table 7: Company and other related income taxation revenue
- Resource rent taxes include PRRT and gross receipts from the RSPT. The $3 billion in 2012‑13 and $9 billion in 2013‑14 represents the net impact on receipts across several different revenue heads. This includes the offsetting reductions in company tax (through deductibility), crude oil excise and interactions with other taxes.
The continued weakness in the global economy, low asset prices and the recoupment of prior‑year losses are expected to suppress company profits in 2009‑10. These factors have resulted in expected company tax revenue decreasing in 2009‑10 by $7.1 billion, or over 11 per cent.
Company taxation is expected to recover strongly in 2010‑11, growing by $12.9 billion (24.0 per cent) on the back of improved forecasts of corporate profits and capital gains.
In 2011‑12, company taxation revenue growth is expected to remain strong, with an increase of $11.5 billion (17.3 per cent) from the 2010‑11 level, as the utilisation of prior‑year losses declines and company profits grow in line with the broader economy.
Company income tax is projected to grow by 2.4 per cent in 2012‑13 but decline by 2.4 per cent in 2013‑14. A recovery in company profits and losses returning to lower long‑run levels are moderated by the unwinding of instalment rate effects in the company tax system.
Policy measures to lower the company tax rate and introduce the Resource Super Profits Tax (which is deductible against company tax) have strong downward effects on company tax revenues in the projection years. Policy measures detract almost 6 percentage points from growth in this revenue head in 2013‑14.
In 2009‑10, taxation revenue from superannuation funds is expected to decrease by $3.2 billion (35.1 per cent), from a fall in discretionary contributions and weak investment incomes during 2008‑09.
In 2010‑11, superannuation funds' income tax is expected to increase by about $1.2 billion (19.7 per cent). While discretionary contributions are expected to increase, it is expected that earnings income will continue to be offset with losses carried forward.
Growth in superannuation tax is expected to be around 23.7 per cent in 2011‑12. The recovery forecast in the labour market in 2009‑10 (continuing through 2010‑11) is expected to increase employer contributions and, as the stock of capital losses begins to run down, investment incomes should once again impact positively on superannuation funds' tax.
Superannuation funds' tax is expected to continue improving in the projection years, with growth of 17.9 per cent in 2012‑13. In 2013‑14, growth slows to 5.2 per cent, as revenues are affected by the measure to provide a superannuation contributions tax rebate for low‑income earners.
While the abolition of the superannuation surcharge prevents future liabilities from accruing, a very small allowance (which has increased slightly for 2009‑10) has been made in relation to liabilities which accrued prior to 1 July 2005.
Resource rent taxes
Resource rent taxes include Petroleum Resource Rent Tax (PRRT) and the Resource Super Profits Tax (RSPT), to be introduced in 2012‑13.
PRRT is expected to fall by $620 million (29.5 per cent) in 2009‑10 due to production disruptions occurring in some major fields, and to the fall in the price of crude oil relative to the high levels of 2008. In 2010‑11 PRRT is forecast to increase by $380 million (25.7 per cent) as production recovers from earlier disruptions and crude oil and other commodity prices continue to rise from the previous year's lows.
From 2011‑12, PRRT revenue is expected to grow by 16.1 per cent, as new fields are expected to commence paying the tax.
The introduction of the RSPT in 2012‑13 will add to resource rent tax revenues in the projection years.
Sales taxation revenues
Table 8: Sales taxation revenue
Goods and services tax
GST revenue is expected to increase by $4.2 billion (9.9 per cent) in 2009‑10, primarily reflecting the improved growth in consumption subject to GST, dwelling investment and ownership transfer costs.
GST is expected to increase by $3.2 billion (6.8 per cent) in 2010‑11 and by $3.4 billion (6.8 per cent) in 2011‑12, reflecting continued strength in taxable consumption, dwelling investment and ownership transfer costs.
In the projection years, GST revenue is expected to grow in line with the nominal economy and consumption.
Other sales taxes
Other sales taxes include the luxury car tax, wine equalisation tax and residual liabilities and disputed amounts related to the abolished wholesale sales tax.
Luxury car tax (LCT) revenue is estimated to increase by $110 million (27.6 per cent) in 2009‑10 and by $50 million (10.2 per cent) in 2010‑11 in line with forecast increases in new motor vehicle sales. Sales and prices at the luxury car end have mirrored the pick‑up in cars more generally. LCT revenue is projected to increase over the projection years, reflecting the revised outlook for the economic recovery.
The underlying growth in wine equalisation tax (WET) revenue is expected to move in line with expected total alcohol consumption. WET revenue is expected to grow moderately in 2009‑10, reflecting low expected growth in the volume of wine consumption. From 2010‑11, WET revenue is expected to grow more strongly, in line with stronger growth in both prices and consumption of wine.
Excise and customs duty revenue
Table 9: Excise and customs duty revenue(a)
- The impact of the increase in the tax rate on tobacco products affects both excise and customs duty (reported within the 'excise‑like goods' category). The resulting increase in excise duty is largely offset by the expected offshore relocation in 2010‑11 of a large tobacco manufacturer, which will then fulfil its tax obligations via customs duty.
- Other excisable beverages are those not exceeding 10 per cent by volume of alcohol.
Revenue from petrol excise is expected to fall by $70 million (1.1 per cent) in 2009‑10, before falling by a further $160 million (2.5 per cent) in 2010‑11. This reflects continued falls in petrol production, resulting from manufacturers substituting away from petrol toward the production of more environmentally friendly fuel sources such as blends. This trend towards substituting to more environmentally friendly fuels is expected to continue in 2011‑12 and the projection years.
Revenue from diesel excise is expected to increase by $150 million (2.3 per cent) in 2009‑10, and by a further $140 million (2.0 per cent) in 2010‑11. This is attributable to the improved outlook for the real economy, particularly in the mining, agriculture and construction industries, which are the largest consumers of diesel.
In 2009‑10, beer excise is estimated to increase by 2.8 per cent while revenue from other excisable beverages is expected to be flat, reflecting continued subdued consumption of ready‑to‑drink beverages. Growth in both excises is expected to rise from 2010‑11 in line with the improving economy.
On 29 April 2010 the Government announced an increase in tobacco excise to reduce the prevalence of smoking. The impact of this change on excise revenues is partially offset by the expected relocation of a cigarette producer moving production overseas. The net impact on tobacco excise is a fall by 1.9 per cent in 2010‑11. Tobacco excise is expected to remain subdued in the following years as the impact of higher excise and health warnings discourage tobacco consumption.
Table 10: Excise rates(a)
- The rate of excise on crude oil and condensate is not provided in this table as it varies according to the quantity sold, the sale price, and the dates of discovery and development of the oil field.
Customs duties are expected to fall by almost $450 million (7.1 per cent) in 2009‑10 in line with the tariff reductions applying from 1 January 2010. Customs duty from general imports is expected to be significantly weaker by almost $390 million (25.5 per cent), while duty from textiles, clothing and footwear is expected to fall by $290 million (25.9 per cent) as the tariff cuts take effect.
Revenue from passenger motor vehicle imports, however, is forecast to increase slightly by $15 million, despite this year's tariff reduction, reflecting stronger imports of motor vehicles. Duty revenue from imported tobacco is also set to increase by $80 million.
Customs duty revenue is expected to rise by $940 million (16.1 per cent) in 2010‑11, owing to a tobacco manufacturer shifting production overseas in 2010. This is expected to raise tobacco customs duty by $1.2 billion (159.5 per cent), although as noted earlier this simply offsets tobacco duty lost under the excise regime.
Customs duty revenue is expected to increase in 2011‑12 and in the projection years with growth of 7.4 per cent, 4.6 per cent and 5.5 per cent respectively.
Table 11: Customs duty tariff rates
- The general tariff of 5 per cent applies to most manufactured goods. Many goods, including primary products, textiles, clothing and footwear, and other manufactured goods have free rate of duty.
- This category includes new passenger vehicles, off‑road, second‑hand cars and parts. Used vehicles are subject to an additional impost of $12,000.
Other taxation revenue
Table 12: Other taxation revenue
Other taxation revenue is expected to remain relatively steady over the forward estimates period.
Table 13: Non‑taxation revenue
Non‑taxation revenue in 2010‑11 is expected to be $5.3 billion (or 21.6 per cent) lower than 2009‑10, reflecting reductions in the Reserve Bank of Australia dividend and in fee receipts from eligible financial institutions for the Guarantee Scheme for Large Deposits and Wholesale Funding.
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