Australian Government, 2013-14 Budget
Budget

Statement 5: Revenue (Continued)

Overview

Since the 2012‑13 Budget, tax receipts have been revised down by around $17 billion in 2012‑13. This brings the total write‑down in tax receipts over the five years since the 2008‑09 Budget to around $170 billion. Since the 2012‑13 MYEFO, tax receipts have been revised down by around $60 billion over the four years to 2015‑16.

Tax receipts have been significantly affected by weaker than expected nominal GDP growth. Weaker commodity prices and the persistently high Australian dollar, which has put pressure on domestic prices, have hit company profits across most of the economy, including the resources sector. This has had a significant impact on the level of company tax receipts expected in 2012‑13 and over the forward estimates.

Lower than expected capital gains tax and resource rent taxes have compounded the fall in company tax receipts. Income tax withholding and consumption taxes have been revised down to a lesser extent, as wages are expected to grow modestly and consumption growth is expected to remain solid.

While Australian Government receipts continue to recover from their GFC trough, their growth continues to be significantly slower than previously expected. The tax‑to‑GDP ratio in 2013‑14 is estimated to be 22.2 per cent, 1.8 percentage points lower than the average of the five years prior to the GFC of 24.0 per cent.

Table 1: Australian Government general government receipts
  Actuals   Estimates   Projections
  2010‑11 2011‑12   2012‑13 2013‑14 2014‑15   2015‑16 2016‑17
Total taxation receipts ($b) 280.8 309.9   326.3 354.9 377.8   405.8 431.5
Growth on previous year (%) 7.6 10.4   5.3 8.8 6.5   7.4 6.3
Per cent of GDP 20.0 21.0   21.5 22.2 22.5   23.0 23.2
Tax receipts excluding GST ($b) 235.0 263.9   278.6 304.6 324.9   350.0 372.8
Growth on previous year (%) 8.3 12.3   5.6 9.3 6.7   7.7 6.5
Per cent of GDP 16.7 17.9   18.3 19.1 19.4   19.8 20.0
Non-taxation receipts ($b) 21.2 19.9   24.1 21.1 23.4   23.1 22.1
Growth on previous year (%) -10.6 -5.9   21.0 -12.3 10.8   -1.3 -4.2
Per cent of GDP 1.5 1.4   1.6 1.3 1.4   1.3 1.2
Total receipts ($b) 302.0 329.9   350.4 376.0 401.2   428.9 453.6
Growth on previous year (%) 6.1 9.2   6.2 7.3 6.7   6.9 5.8
Per cent of GDP 21.5 22.4   23.0 23.5 23.9   24.3 24.4

Total receipts, including non‑tax receipts, have been revised down by $16.6 billion in 2012‑13, $16.6 billion in 2013‑14 and $47.8 billion over the four years to 2015‑16 (see Table 4). Relative to the 2012‑13 MYEFO, tax receipts have been revised down by $12.9 billion in 2012‑13, $16.5 billion in 2013‑14, and $46.7 billion over the four years to 2015‑16 (Table 2).

Table 2: Reconciliation of Australian Government general government taxation receipts from the 2012‑13 Budget and the 2012‑13 MYEFO
  Estimates   Projections
   2012‑13
$m
2013‑14
$m
2014‑15
$m
   2015‑16
$m
Tax receipts at 2012‑13 Budget 343,107 371,409 392,852   415,459
Changes from 2012‑13 Budget to 2012‑13 MYEFO -3,897 -16 -3,616   -3,921
Tax receipts at 2012‑13 MYEFO 339,209 371,393 389,236   411,538
Changes from 2012‑13 MYEFO to 2013‑14 Budget          
Effect of policy decisions -58 93 5,341   8,986
Effect of parameter and other variations -12,855 -16,633 -16,825   -14,714
Total variations -12,912 -16,539 -11,485   -5,729
Tax receipts at 2013‑14 Budget 326,297 354,854 377,751   405,809

Abstracting from policy decisions, tax receipts excluding GST have been revised down by $12.3 billion in 2012‑13, $15.9 billion in 2013‑14 and $58.2 billion over the four years to 2015‑16 (Table 3) relative to the 2012‑13 MYEFO. Company tax is the single largest contributor to the write‑downs. Lower than expected capital gains tax and resource rent taxes have compounded the fall in company tax receipts.

The lower estimated carbon price is expected to reduce receipts from the carbon pricing mechanism when it moves to a floating price. The largest impact is in 2015‑16 with a smaller impact in 2013‑14 and 2014‑15 associated with advance auctions of permits. The prices received at advance auctions of floating price permits, commencing in 2013‑14, are expected to reflect average EU‑ETS market futures prices. The budgetary impact of lower carbon price receipts are largely offset by policy changes and estimates variations associated with the Clean Energy Future Plan (see Box 2 of Budget Statement 3).

Table 3: Reconciliation of Australian Government general government taxation receipts excluding GST from the 2012‑13 MYEFO
  Estimates   Projections
   2012‑13
$m
2013‑14
$m
2014‑15
$m
   2015‑16
$m
Tax receipts excluding GST at 2012‑13 MYEFO 290,959 320,393 335,536   355,138
Changes from 2012‑13 MYEFO to 2013‑14 Budget          
Effect of policy decisions -57 94 5,332   8,957
Effect of parameter and other variations -12,306 -15,884 -15,936   -14,085
Total variations -12,362 -15,789 -10,605   -5,129
Tax receipts excluding GST at 2013‑14 Budget 278,597 304,604 324,931   350,009

The revenue position has been enhanced by a range of measures, including increasing the Medicare levy to help fund DisabilityCare Australia, protecting the integrity of the income tax base, improving the sustainability of the superannuation system and better targeting tax expenditures. Collectively, policy measures add $14.4 billion to tax receipts over the four years to 2015‑16 (see Table 2).

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