Part 1: Australian Government Budget Outcome
Overview
In 2011-12, the Australian Government general government sector recorded an underlying cash deficit of $43.7 billion (3.0 per cent of gross domestic product (GDP)). The fiscal balance was in deficit by $44.5 billion (3.0 per cent of GDP).
In cash terms, the Final Budget Outcome for 2011-12 was a $661 million improvement compared with the underlying cash deficit estimated at the 2012-13 Budget, with total cash receipts (excluding Future Fund earnings) $356 million higher than expected and total cash payments $305 million lower than expected.
Tax receipts are recovering from their post-financial crisis lows, but still remain low as a proportion of GDP by historical standards, with accumulated losses continuing to flow through the tax system. Tax receipts in 2011-12 were around $26 billion (7.8 per cent) below the level that was forecast in the 2008-09 Budget before the crisis. The tax-to-GDP ratio is expected to continue to recover through 2012-13, while remaining well below the pre-crisis projection.
Tax receipts for 2011-12 were broadly in line with the forecast at the 2012-13 Budget, with total tax receipts around $290 million (0.1 per cent) higher than forecast.
Australian Government general government sector net debt was $147.3 billion (10.0 per cent of GDP), which was $4.8 billion higher than estimated at the time of the 2012-13 Budget. The change was primarily driven by the higher‑than‑expected market value of Commonwealth Government Securities (CGS), owing to lower than expected yields. Australian Government general government sector net financial worth was -$358.3 billion at the end of 2011‑12. Net worth was -$247.2 billion at the end of 2011-12.
Table 1: Australian Government general government sector budget aggregates
| 2010-11 Outcome $b |
2011-12 Estimate at 2012-13 Budget $b |
2011-12 Outcome $b |
|
|---|---|---|---|
| Receipts(a) | 302.0 | 330.0 | 329.9 |
| Per cent of GDP | 21.6 | 22.3 | 22.5 |
| Payments(b) | 346.1 | 371.3 | 371.0 |
| Per cent of GDP | 24.7 | 25.1 | 25.3 |
| Future Fund earnings | 3.7 | 3.0 | 2.6 |
| Underlying cash balance(c) | -47.7 | -44.4 | -43.7 |
| Per cent of GDP | -3.4 | -3.0 | -3.0 |
| Revenue(a) | 309.9 | 336.4 | 338.1 |
| Per cent of GDP | 22.1 | 22.8 | 23.0 |
| Expenses | 356.1 | 373.7 | 377.7 |
| Per cent of GDP | 25.5 | 25.3 | 25.7 |
| Net operating balance | -46.2 | -37.3 | -39.6 |
| Net capital investment | 5.3 | 4.7 | 4.9 |
| Fiscal balance | -51.5 | -42.0 | -44.5 |
| Per cent of GDP | -3.7 | -2.8 | -3.0 |
| Memorandum item: | |||
| Headline cash balance | -51.1 | -48.4 | -47.0 |
- Includes Future Fund earnings.
- Equivalent to cash payments for operating activities, purchases of non-financial assets and net acquisition of assets under finance leases.
- Excludes Future Fund earnings.
Underlying cash balance
The 2011-12 underlying cash deficit was $43.7 billion, an improvement of $661 million compared with the estimate at the 2012-13 Budget. This was the result of higher cash receipts (excluding Future Fund earnings) of $356 million and lower cash payments of $305 million.
Table 2: Summary of Australian Government general government sector cash flows
| 2011-12 Estimate at 2012-13 Budget $b |
2011-12 Outcome $b |
|
|---|---|---|
| Cash receipts | ||
| Operating cash receipts excluding Future Fund earnings | 326.3 | 326.8 |
| Future Fund earnings | 3.0 | 2.6 |
| Total operating receipts | 329.4 | 329.4 |
| Capital cash receipts(a) | 0.6 | 0.5 |
| Total cash receipts | 330.0 | 329.9 |
| Cash payments | ||
| Operating cash payments | 360.3 | 360.5 |
| Capital cash payments(b) | 10.9 | 10.5 |
| Total cash payments | 371.2 | 371.0 |
| Finance leases and similar arrangements(c) | 0.1 | 0.0 |
| GFS cash surplus(+)/deficit(-) | -41.4 | -41.2 |
| Per cent of GDP | -2.8 | -2.8 |
| less Future Fund earnings | 3.0 | 2.6 |
| Underlying cash balance(d) | -44.4 | -43.7 |
| Per cent of GDP | -3.0 | -3.0 |
| Memorandum items: | ||
| Net cash flows from investments in financial assets for policy purposes |
-7.0 | -5.9 |
| plus Future Fund earnings | 3.0 | 2.6 |
| Headline cash balance | -48.4 | -47.0 |
- Equivalent to cash receipts from the sale of non-financial assets in the cash flow statement.
- Equivalent to cash payments for purchases of non-financial assets in the cash flow statement.
- The acquisition of assets under finance leases decreases the underlying cash balance. The disposal of assets previously held under finance leases increases the underlying cash balance.
- Excludes Future Fund earnings.
Receipts
Total cash receipts (excluding Future Fund earnings) were $327.3 billion in 2011-12, $356 million higher than estimated in the 2012-13 Budget.
Tax receipts for 2011-12 were $309.9 billion, $290 million (0.1 per cent) higher than estimated in the 2012-13 Budget. Excluding GST, tax receipts were around $158 million higher than expected in the 2012-13 Budget.
While tax receipts were broadly in line with the Budget estimate, there were some compositional differences. Consistent with the continued strength in the labour market, tax receipts where the outcome was above expectations compared with the 2012-13 Budget related to:
- higher than expected income tax withholding of $570 million (0.4 per cent);
- higher than expected fringe benefits tax of $251 million (7.2 per cent); and
- higher than expected superannuation funds taxation of $332 million (4.6 per cent) including a one-off payment relating to a previous income year.
In addition, receipts from GST were $132 million (0.3 per cent) above the estimate in the 2012-13 Budget.
These higher than expected tax receipts outlined above were largely offset by:
- a shortfall in company tax receipts of $876 million (1.3 per cent) below the estimate in the 2012‑13 Budget, primarily reflecting weaker than expected taxable income of companies; and
- lower than expected excise and customs duty tax receipts of around $149 million (0.5 per cent) below the 2012-13 Budget estimate, mainly reflecting weaker than expected tobacco collections.
Non–tax receipts (excluding Future Fund earnings) were $17.3 billion in 2011-12, broadly in line with the estimate in the 2012-13 Budget.
Future Fund earnings were $2.6 billion; $457 million lower than expected in the 2012-13 Budget. These earnings were below expectations as a result of the timing of dividend and interest receipts which will be received in 2012-13. This variance has no impact on the underlying cash balance as Future Fund earnings are excluded from the calculation of the underlying cash balance.
Table 3: Australian Government general government sector (cash) receipts
| 2011-12 Estimate at 2012-13 Budget $m |
2011-12 Outcome $m |
Change on 2012-13 Budget $m |
|
|---|---|---|---|
| Individuals' and other withholding taxes | |||
| Gross income tax withholding | 142,200 | 142,770 | 570 |
| Gross other individuals | 31,300 | 31,141 | -159 |
| less: Refunds | 25,600 | 25,537 | -63 |
| Total individuals' and other withholding taxation | 147,900 | 148,373 | 473 |
| Fringe benefits tax | 3,480 | 3,731 | 251 |
| Company tax | 67,460 | 66,584 | -876 |
| Superannuation funds | 7,230 | 7,562 | 332 |
| Petroleum resource rent tax | 1,510 | 1,463 | -47 |
| Income taxation receipts | 227,580 | 227,714 | 134 |
| Sales taxes | |||
| Goods and services tax | 45,729 | 45,861 | 132 |
| Wine equalisation tax | 720 | 708 | -12 |
| Luxury car tax | 440 | 435 | -5 |
| Total sales taxes | 46,889 | 47,004 | 115 |
| Excise duty | |||
| Petrol | 6,000 | 6,036 | 36 |
| Diesel | 8,200 | 8,231 | 31 |
| Beer | 1,960 | 1,938 | -22 |
| Tobacco | 5,790 | 5,449 | -341 |
| Other excisable products | 3,830 | 3,891 | 61 |
| Of which: Other excisable beverages(a) | 930 | 909 | -21 |
| Total excise duty receipts | 25,780 | 25,545 | -235 |
| Customs duty | |||
| Textiles, clothing and footwear | 650 | 655 | 5 |
| Passenger motor vehicles | 850 | 805 | -45 |
| Excise-like goods | 4,210 | 4,307 | 97 |
| Other imports | 1,400 | 1,440 | 40 |
| less: Refunds and drawbacks | 200 | 212 | 12 |
| Total customs duty receipts | 6,910 | 6,996 | 86 |
| Other indirect taxation | |||
| Agricultural levies | 437 | 421 | -16 |
| Other taxes | 2,057 | 2,263 | 206 |
| Total other indirect taxation receipts | 2,494 | 2,684 | 190 |
| Indirect taxation receipts | 82,073 | 82,229 | 156 |
| Taxation receipts | 309,653 | 309,943 | 290 |
| Sales of goods and services | 8,040 | 7,778 | -262 |
| Interest received | 4,343 | 4,267 | -77 |
| Dividends | 2,222 | 1,789 | -433 |
| Other non-taxation receipts | 5,718 | 6,098 | 380 |
| Non-taxation receipts(b) | 20,323 | 19,931 | -392 |
| Total receipts(b) | 329,976 | 329,874 | -101 |
| Memorandum: | |||
| Medicare levy receipts | 9,090 | 9,119 | 29 |
- Other excisable beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
- Includes Future Fund earnings.
Payments
Total cash payments were $371.0 billion in 2011-12, $305 million lower than estimated in the 2012-13 Budget. The reduction in payments was largely a result of lower than forecast payments for:
- a range of Industry Development and Investment and Innovative Industry programs ($266 million), with lower than expected demand for assistance, combined with slower than expected contracted payments for the Automotive Transformation Scheme;
- a range of health programs ($264 million), primarily reflecting lower than anticipated demand and costs for a range of programs including residential aged care, rural workforce programs and pharmaceutical related programs;
- Income Support for Seniors ($229 million), largely reflecting lower than projected recipient numbers and a change in the composition of income support recipients leading to a lower than expected average payment rate;
- Department of Defence support for overseas operations ($181 million), reflecting lower than expected costs relating to suppliers, freight, strategic lift, catering contracts and additional facilities;
- capital payments by the Department of Foreign Affairs and Trade ($145 million), with the largest component attributable to delays in finalising the purchasing of land overseas for a chancery relocation; and
- a range of grant programs administered by the Department of Resources, Energy and Tourism, including the Clean Energy Initiative programs ($121 million). The lower grant payments largely reflect delays in grant recipients meeting contract milestones.
These decreases in cash payments were largely offset by the provision for underspends included in the Contingency Reserve in the 2012-13 Budget, and higher than forecast payments relating to:
- Tertiary Student Assistance ($196 million) reflecting an increased overall average payment rate for Youth Allowance than was estimated in the 2012-13 Budget. This is largely explained by a greater number of higher education recipients than expected; and
- the Government’s payment to the New South Wales Office of State Revenue in full and final payment in settlement of a disputed stamp duty assessment issued under the Duties Act 1997 (NSW) following the Commonwealth’s sale of the Sydney Airport.
Fiscal balance
The 2011-12 fiscal balance deficit was $44.5 billion, a $2.5 billion deterioration on the deficit of $42.0 billion estimated in the 2012-13 Budget. The cash receipt and payment variations outlined previously have a similar impact on revenue and expenses since fiscal and cash variances are typically driven by the same factors. However, the deterioration in the fiscal balance of $2.5 billion, compared with the improvement in the underlying cash balance of $661 million, is the result of revenue and expense variations that do not have a corresponding cash impact in 2011-12 as outlined below.
Revenue
Total revenue was $338.1 billion in 2011-12, $1.7 billion higher than estimated in the 2012-13 Budget.
Accrual taxation revenue was $316.8 billion in 2011-12, $325 million above the estimate in the 2012-13 Budget, which is in line with the variation in cash receipts.
Total non-tax revenue was $21.3 billion in 2011-12, $1.4 billion higher than estimated in the 2012-13 Budget. Non-tax receipts (excluding Future Fund earnings) were $17.3 billion, in line with estimates in the Budget. The largest component of the difference in outcomes between non-tax revenue and non-tax receipts (excluding Future Fund earnings) is the change in the accounting recognition of dividends from:
- the Reserve Bank of Australia, a $500 million dividend has been recognised in 2011-12 instead of 2012-13, based on advice from the Australian National Audit Office; and
- the Australian Reinsurance Pool Corporation, reflecting a change to the timing of accrual revenue at Budget, with the full amount of $400 million being recorded in 2011-12 instead of over the forward estimates.
Table 4: Australian Government general government sector (accrual) revenue
| 2011-12 Estimate at 2012-13 Budget $m |
2011-12 Outcome $m |
Change on 2012-13 Budget $m |
|
|---|---|---|---|
| Individuals' and other withholding taxes | |||
| Gross income tax withholding | 143,220 | 143,978 | 758 |
| Gross other individuals | 33,610 | 32,992 | -618 |
| less: Refunds | 25,600 | 25,537 | -63 |
| Total individuals' and other withholding taxation | 151,230 | 151,433 | 203 |
| Fringe benefits tax | 3,540 | 3,964 | 424 |
| Company tax | 67,950 | 66,726 | -1,225 |
| Superannuation funds | 7,390 | 7,852 | 462 |
| Petroleum resource rent tax | 1,840 | 1,293 | -547 |
| Income taxation revenue | 231,950 | 231,268 | -683 |
| Sales taxes | |||
| Goods and services tax | 47,790 | 48,849 | 1,059 |
| Wine equalisation tax | 730 | 716 | -14 |
| Luxury car tax | 440 | 440 | 0 |
| Total sales taxes | 48,960 | 50,004 | 1,044 |
| Excise duty | |||
| Petrol | 6,080 | 6,016 | -64 |
| Diesel | 8,200 | 8,203 | 3 |
| Beer | 1,960 | 1,932 | -28 |
| Tobacco | 5,790 | 5,449 | -341 |
| Other excisable products | 3,830 | 3,881 | 51 |
| Of which: Other excisable beverages(a) | 930 | 906 | -24 |
| Total excise duty revenue | 25,860 | 25,480 | -380 |
| Customs duty | |||
| Textiles, clothing and footwear | 650 | 655 | 5 |
| Passenger motor vehicles | 850 | 903 | 53 |
| Excise-like goods | 4,210 | 4,307 | 97 |
| Other imports | 1,410 | 1,441 | 31 |
| less: Refunds and drawbacks | 180 | 202 | 22 |
| Total customs duty revenue | 6,940 | 7,105 | 165 |
| Other indirect taxation | |||
| Agricultural levies | 437 | 421 | -16 |
| Other taxes | 2,307 | 2,501 | 194 |
| Total other indirect taxation revenue | 2,744 | 2,922 | 178 |
| Indirect taxation revenue | 84,504 | 85,511 | 1,007 |
| Taxation revenue | 316,454 | 316,779 | 325 |
| Sales of goods and services | 8,256 | 8,106 | -150 |
| Interest | 4,703 | 4,617 | -86 |
| Dividends | 1,669 | 2,662 | 992 |
| Other non-taxation revenue | 5,336 | 5,945 | 609 |
| Non-taxation revenue(b) | 19,964 | 21,330 | 1,366 |
| Total revenue(b) | 336,418 | 338,109 | 1,691 |
| Memorandum: | |||
| Medicare levy revenue | 9,090 | 9,119 | 29 |
- Other excisable beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
- Includes Future Fund earnings.
Expenses and net capital investment
Total expenses were $377.7 billion in 2011-12, $4.1 billion higher than estimated at the 2012-13 Budget. Total net capital investment was $4.9 billion, $102 million higher than estimated at the 2012-13 Budget.
The difference between the higher than estimated outcome for expenses and net capital investment of $4.2 billion and the lower than estimated outcome for cash payments of $305 million includes:
- increased estimates for the Natural Disaster Relief and Recovery Arrangements (NDRRA) program ($701 million), reflecting updated information on the disasters that occurred in the summer of 2012, leading to an increase in the estimates for those disasters compared with the 2012-13 Budget estimates. The total expense is recorded in the year in which the disaster occurs, rather than when the State or Territory lodges a claim for reimbursement from the Commonwealth;
- the Department of Veterans’ Affairs ($569 million), largely as a result of increases to the military workers compensation provision for future claims under the Military Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation and Compensation Act 1988, reflecting revised actuarial calculations;
- increases in personal benefits and grants payable for a number of Health programs ($549 million), largely reflecting a higher than forecast number of policy prepayments by Private Health Insurance customers and higher than expected claims for Medicare services;
- the provision of GST to the States and Territories, reflecting higher than estimated GST collections ($440 million)1;
- an increase in the provision for workers compensation and asbestos related disease claims by Comcare ($333 million), reflecting revised actuarial calculations undertaken for the 2011-12 financial statements; and
- increased accrued expenses relating to higher supplier expenditure incurred in detention centre management, detainees and refugee settlement areas, primarily as a result of the increase in irregular maritime arrivals ($208 million).
Table 5: Australian Government general government sector expenses by function
| 2011-12 Estimate at 2012-13 Budget $m |
2011-12 Outcome $m |
|
|---|---|---|
| General public services | ||
| Legislative and executive affairs | 1,010 | 1,003 |
| Financial and fiscal affairs | 7,663 | 7,982 |
| Foreign affairs and economic aid | 5,798 | 5,878 |
| General research | 2,789 | 2,764 |
| General services | 841 | 1,432 |
| Government superannuation benefits | 3,843 | 4,094 |
| Defence | 21,656 | 21,692 |
| Public order and safety | 4,072 | 3,999 |
| Education | 29,259 | 29,050 |
| Health | 61,168 | 62,012 |
| Social security and welfare | 126,879 | 126,747 |
| Housing and community amenities | 6,238 | 6,180 |
| Recreation and culture | 3,705 | 3,809 |
| Fuel and energy | 6,633 | 6,464 |
| Agriculture, forestry and fishing | 3,255 | 2,953 |
| Mining, manufacturing and construction | 2,114 | 2,245 |
| Transport and communication | 9,178 | 9,129 |
| Other economic affairs | ||
| Tourism and area promotion | 171 | 177 |
| Total labour and employment affairs | 4,765 | 4,783 |
| Immigration | 2,475 | 2,740 |
| Other economic affairs nec | 2,347 | 2,354 |
| Other purposes | ||
| Public debt interest | 11,510 | 11,421 |
| Nominal superannuation interest | 7,358 | 7,376 |
| General purpose inter-governmental transactions | 49,555 | 49,940 |
| Natural disaster relief | 815 | 1,516 |
| Contingency reserve | -1,426 | 0 |
| Total expenses | 373,671 | 377,739 |
Table 6: Australian Government general government sector net capital investment by function
| 2011-12 Estimate at 2012-13 Budget $m |
2011-12 Outcome $m |
|
|---|---|---|
| General public services | 468 | 191 |
| Defence | 2,408 | 2,741 |
| Public order and safety | 220 | 262 |
| Education | 7 | -2 |
| Health | 280 | 163 |
| Social security and welfare | 103 | 253 |
| Housing and community amenities | 182 | 187 |
| Recreation and culture | 71 | 41 |
| Fuel and energy | 11 | 6 |
| Agriculture, forestry and fishing | 596 | 678 |
| Mining, manufacturing and construction | 18 | 0 |
| Transport and communication | 36 | 25 |
| Other economic affairs | 146 | 305 |
| Other purposes | 203 | 0 |
| Total net capital investment | 4,749 | 4,850 |
Net debt, net financial worth and net worth
At the end of 2011-12, the level of Australian Government net debt was $147.3 billion (10.0 per cent of GDP), $4.8 billion higher than estimated at the time of the 2012-13 Budget.
Despite lower-than-expected debt issuance in 2011-12, the increase in net debt since the Budget was primarily driven by an increase in the market value of the existing stock of Commonwealth Government Securities (CGS) on issue, owing to lower yields. CGS are reported in the general government sector balance sheet in market value terms, consistent with the Australian Accounting Standards. The lower yields experienced after the Budget have resulted in an increase in the market value of CGS outstanding while the face value has not been affected.
- Net financial worth was -$358.3 billion at the end of 2011-12, compared with -$251.3 billion estimated at the 2012-13 Budget.
- Net worth was -$247.2 billion at the end of 2011-12, compared with -$141.8 billion estimated at the 2012‑13 Budget.
The change in the market value of CGS described above also impacts on net financial worth and net worth. In addition to this, changes to net financial worth and net worth after the Budget reflect a significant increase in the Government’s superannuation liability. This is the result of a large difference between the long-term discount rate used in the Budget (6.0 per cent per annum) and the actual bond rate as at 30 June 2012 (3.1 per cent per annum) used to value the superannuation liability. The use of two different rates is the usual practice, applied in previous budgets and final budget outcomes, and reduces the volatility in reported liabilities for budget reporting purposes.
Table 7: Australian Government general government sector net worth, net financial worth, net debt and net interest payments
| 2011-12 Estimate at 2012-13 Budget $b |
2011-12 Outcome $b |
|
|---|---|---|
| Financial assets | 216.3 | 221.3 |
| Non-financial assets | 109.5 | 111.1 |
| Total assets | 325.8 | 332.4 |
| Total liabilities | 467.6 | 579.6 |
| Net worth | -141.8 | -247.2 |
| Net financial worth(a) | -251.3 | -358.3 |
| Per cent of GDP | -17.0 | -24.4 |
| Net debt(b) | 142.5 | 147.3 |
| Per cent of GDP | 9.6 | 10.0 |
| Net interest payments | 6.5 | 6.6 |
| Per cent of GDP | 0.4 | 0.4 |
- Net financial worth equals total financial assets minus total liabilities.
- Net debt equals the sum of deposits held, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.
1 There will be differences in the amount of GST received and GST paid to States and Territories reflecting timing of payments between financial years (see Part 3, Table 30).
If www.budget.gov.au responds slowly or you are having trouble downloading a document, try one of the Budget Website Mirrors
Note: Where possible, Budget documents are available in HTML and for downloading in Portable Document Format(PDF). If you require further information on any of the tables or charts on this website, please contact The Treasury.
