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Statement 4: Revenue
(continued)

Variations in receipts estimates

Table 3 reconciles the 2016‑17 Budget estimates of total receipts, which include non‑tax receipts, with the 2015‑16 Budget and the 2015‑16 MYEFO estimates. These differences reflect the impact of parameter and other variations and the impact of policy decisions.

Table 3: Reconciliation of Australian Government general government receipts estimates from the 2015‑16 Budget(a)
  Estimates   Projections    
  2015‑16 2016‑17 2017‑18   2018-19   Total
  $m $m $m   $m   $m
Receipts at 2015‑16 Budget 397,980 422,461 453,595   488,233   1,762,269
Changes from 2015‑16 Budget to 2015‑16 MYEFO              
Effect of policy decisions -1,345 -917 -907   -668   -3,837
Effect of parameter and other variations -1,744 -6,216 -11,805   -14,034   -33,800
Total variations -3,089 -7,134 -12,712   -14,702   -37,637
Receipts at 2015‑16 MYEFO 394,891 415,327 440,883   473,531   1,724,632
Changes from 2015‑16 MYEFO to 2016‑17 Budget              
Effect of policy decisions 417 -1,670 225   -209   -1,238
Effect of parameter and other variations -7,280 -2,373 -3,723   -3,401   -16,777
Total variations -6,863 -4,043 -3,497   -3,611   -18,015
Receipts at 2016‑17 Budget 388,027 411,284 437,385   469,921   1,706,617

(a) Includes expected Future Fund earnings.

Since the 2015‑16 MYEFO, total receipts have been revised down by around $18.0 billion in the four years to 2018‑19, reflecting a downward revision of $16.8 billion from parameter and other variations, and a decrease of $1.2 billion from policy decisions. Excluding GST, total receipts have been revised down $4.0 billion in 2016‑17 and $19.1 billion over the four years to 2018‑19.

Chart 1 shows the revisions to estimates for total receipts since the 2015‑16 MYEFO over the four years to 2018‑19. The revisions are broken down by revisions owing to policy decisions and revisions owing to parameter and other variations.

Chart 1: Revisions to total receipts estimates since the 2015‑16 MYEFO

This chart shows that since the 2015-16 MYEFO, total receipts have been revised down by around [$4 billion] in 2016-17 and by around [$18 billion] over the four years to 2018-19. The chart decomposes the revisions into variations that stem from policy decisions and variations that stem from parameter and other variations and shows that the majority of the variations in each of the four years to 2018-19 are a result of parameter and other variations.

Source: Treasury.

X Values Policy decisions Parameter and
other variations
Total variations
2015-16 0.4 -7.3 -6.9
2016-17 -1.7 -2.4 -4.0
2017-18 0.2 -3.7 -3.5
2018-19 -0.2 -3.4 -3.6

Variations in receipts can stem from either policy changes or parameter and other variations such as recent economic conditions, the updated economic outlook, year‑to‑date tax collections and other non‑policy factors. Key economic parameters that influence receipts are shown in Table 4. Analysis of the sensitivity of the tax receipts estimates to changes in the economic outlook is provided in Budget Statement 7.

Table 4: Key economic parameters(a)
  Estimates    Projections
  2015‑16 2016‑17 2017‑18   2018-19 2019-20
Revenue parameters at 2016‑17 Budget            
Nominal gross domestic product 2 1/2 4 1/4 5   5 5
Change since 2015‑16 MYEFO - 1/4 - 1/4 0   - 1/4 na
Compensation of employees(b) 3 4 4 1/2   4 1/2 5
Change since 2015‑16 MYEFO - 3/4 0 1/4   0 na
Corporate gross operating surplus(c) 1 1/4 5 1/4 5 3/4   5 1/4 4 3/4
Change since 2015‑16 MYEFO 1 1/4 0 -1   -1 na
Unincorporated business income 4 1/2 4 5 1/2   5 1/2 4 3/4
Change since 2015‑16 MYEFO 1/2 -1 1/4 -1 1/4   -1 1/4 na
Property income(d) 1 3/4 5 6 1/4   5 5 1/4
Change since 2015‑16 MYEFO 1 3/4 -1 1/4 1 3/4   1/4 na
Consumption subject to GST 4 4 3/4 5 1/4   5 1/2 5 1/4
Change since 2015‑16 MYEFO - 1/4 - 3/4 1/2   1/2 na

(a) Current prices, per cent change on previous years. Changes since the 2015‑16 MYEFO are percentage points and may not reconcile due to rounding.

(b) Compensation of employees measures total remuneration earned by employees.

(c) Corporate GOS is an Australian System of National Accounts measure of company profits, gross of depreciation.

(d) Property income measures income derived from rent, dividends and interest.

na not applicable.

Since the 2015‑16 MYEFO, parameter and other variations have reduced forecast tax receipts by $3.7 billion in 2015‑16, $4.6 billion in 2016‑17 and $13.5 billion over the four years to 2018‑19 (Chart 2). Excluding GST, parameter and other variations have reduced forecast tax receipts by $3.9 billion in 2015‑16, by around $4.6 billion in 2016‑17 and by around $14.2 billion over the four years to 2018‑19.

Chart 2: Parameter and other variations to tax receipts since the 2015‑16 MYEFO

This chart shows the revisions to tax receipts, excluding policy, since the 2016-17 MYEFO by source of revenue and by year. In 2016-17, downgrades to personal income tax of around $2.4 billion are shown to be the largest contributor to the $3.7 billion downward revision to tax receipts, partially offset by increases to other indirect taxes.

Source: Treasury.

X Values Personal income tax Company tax Other income taxes Goods and services tax Other indirect taxes Total
2015-16 -0.9 -2.4 -1.3 0.2 0.7 -3.7
2016-17 -2.7 -0.9 -2.0 0.0 0.9 -4.6
2017-18 -3.5 1.3 -1.8 0.1 0.8 -3.1
2018-19 -4.9 3.0 -1.4 0.4 1.0 -2.0

In aggregate, tax receipts are expected to grow by 3.1 per cent in 2015‑16 and 5.0 per cent in 2016‑17. The primary contributors to growth are income taxes on individuals and companies, and indirect taxes, reflecting growth in wages, profits and consumption respectively. At a disaggregated level, different heads of revenue are expected to grow at different rates, with some expected to experience negative growth.

Individuals and other withholding taxation receipts

Gross income tax withholding (ITW) receipts are forecast to grow by 4.7 per cent in 2015‑16 and 4.4 per cent in 2016‑17. Since the 2015‑16 MYEFO, ITW receipts are expected to be around $1.0 billion lower in 2015‑16 and $7.9 billion lower over the four years to 2018‑19. This fall in expected tax is primarily driven by revisions to total wages forecasts and targeted personal income tax cuts.

Gross other individuals taxes refers to taxes payable by individuals other than those collected through withholding systems, including PAYG instalments paid directly by individuals and assessments after tax returns are lodged. These amounts primarily reflect tax on income such as unincorporated business profits, capital gains and interest.

Gross other individuals taxes are expected to grow by 9.0 per cent in 2015‑16 and 5.7 per cent in 2016‑17. Since the 2015‑16 MYEFO, receipts are expected to be around $400 million higher in 2015‑16 and $3.2 billion lower over the four years to 2018‑19, reflecting lower expected growth in unincorporated business income over the forward estimates. In addition, the Budget includes new policy to increase the tax discount for unincorporated small businesses, which lowers estimated tax receipts. These reductions in receipts have been partly offset by higher expected realisation of capital gains, based on the latest tax return data.

Income tax refunds for individuals, which have a negative effect on receipts, are expected to grow by 2.8 per cent in 2015‑16 and 5.6 per cent in 2016‑17. Relative to the 2015‑16 MYEFO, forecast refunds are $300 million higher (a decrease in overall tax receipts) in 2015‑16 and $3.0 billion higher over the four years to 2018‑19.

Fringe benefits tax

Receipts from fringe benefits tax (FBT) are forecast to grow by 3.5 per cent in 2015‑16 and 3.8 per cent in 2016‑17. Since the 2015‑16 MYEFO, receipts are expected to be around $30 million lower in 2015‑16 and $130 million lower over the four years to 2018‑19, consistent with lower expected total wages.

Company tax

Company tax receipts are forecast to fall by 2.2 per cent in 2015‑16, owing to weaker current year collections, and grow by 6.6 per cent in 2016‑17, consistent with increasing corporate profits. Since the 2015‑16 MYEFO, receipts are expected to be around $2.4 billion lower in 2015‑16 and $2.1 billion lower over the four years to 2018‑19. This fall in expected tax is primarily due to weaker‑than‑expected collections in the current year and lowering of the company tax rate for eligible businesses from 2016‑17.

Excluding new policy decisions, company tax has been revised down by $2.4 billion in 2015‑16 and up by $1.0 billion over the four years to 2018‑19. Collections for 2015‑16 are weaker than expected at MYEFO, primarily owing to lower receipts from the mining sector. This has flow‑on impacts to company tax in 2016‑17. Higher‑than‑expected mining profits are not expected to be reflected in increased company tax collections until 2017‑18 and 2018‑19.

Significant new policies affecting company tax include a reduction in the company tax rate, commencing with a reduction for small businesses, and increasing the small business entity turnover threshold. A more competitive company tax rate will encourage investment, raise productivity, and over time raise real wages and living standards.

In addition, the tax integrity package encompasses measures to reinforce the corporate tax base by preventing multinational corporations from avoiding tax by profit shifting and fighting tax avoidance.

Superannuation fund taxes

Tax receipts from superannuation funds are expected to grow by 12.9 per cent in 2015‑16 and 11.3 per cent in 2016‑17. Since the 2015‑16 MYEFO, receipts are expected to be around $1.1 billion lower in 2015‑16 and $4.2 billion lower over the four years to 2018‑19. Lower receipts are due to higher expected foreign exchange losses, lower expected net contributions owing to weaker wages and lower forecast capital gains tax. These parameter changes more than offset additional expected receipts from superannuation policies announced in this Budget, which better target concessions. These policy changes also have impacts on individuals income taxes.

The Budget includes the introduction of a Low Income Superannuation Tax Offset (LISTO). The LISTO reduces tax on superannuation contributions for low income earners, effectively avoiding the situation in which low income earners would pay more tax on savings placed into superannuation than on income earned outside of superannuation.

Petroleum resource rent tax

Petroleum resource rent tax (PRRT) receipts are forecast to fall by over 50 per cent in 2015‑16 and remain at a similar level in 2016‑17. Since the 2015‑16 MYEFO, receipts are expected to be around $200 million lower in 2015‑16 and $850 million lower over the four years to 2018‑19, consistent with lower Australian dollar oil prices.

Goods and services tax

Receipts from GST are forecast to grow by 6.0 per cent in 2015‑16 and 5.4 per cent in 2016‑17. Since the 2015‑16 MYEFO, receipts are expected to be around $190 million higher in 2015‑16 and $1.1 billion higher over the four years to 2018‑19. The 2015‑16 estimate has been revised upward largely owing to stronger‑than‑expected collections. GST receipts are also expected to be higher as a result of the decision to apply GST to low‑value goods imported by consumers, so that they will face the same tax regime as goods that are sourced domestically.

Excise and customs duty

Excise and customs duty receipts are forecast to grow by 0.6 per cent in 2015‑16 and by 2.8 per cent in 2016‑17. These low growth rates are primarily attributable to tariff cuts as part of free trade agreements and weak growth in excise on other fuel products.

Since the 2015‑16 MYEFO, receipts are expected to be around $550 million higher in 2015‑16 and $4.8 billion higher over the four years to 2018‑19, reflecting higher current year tax collections and the 2016‑17 Budget measure to increase the tobacco excise rate, which is aimed at improving health outcomes. The 2016‑17 Budget includes the measure for the Trans‑Pacific Partnership Agreement.

Other sales taxes

Other sales taxes include the wine equalisation tax (WET) and the luxury car tax (LCT).

WET receipts are forecast to grow by 8.6 per cent in 2015‑16 and 4.7 per cent in 2016‑17. Since the 2015‑16 MYEFO, forecast WET receipts have been revised up by $280 million over the four years to 2018‑19 as a result of higher current year collections and the wine equalisation tax rebate integrity measure.

LCT receipts are forecast to grow by 11.5 per cent in 2015‑16 in line with stronger‑than‑expected sales of vehicles subject to LCT. Since the 2015‑16 MYEFO, forecast LCT receipts have been revised up by $240 million over the four years to 2018‑19.

Non‑taxation receipts

Since the 2015‑16 MYEFO, non‑taxation receipts have been revised down by $3.1 billion in 2015‑16, primarily due to the agreement with the Victorian Government to reinvest the $1.5 billion provided for the East West Link project to fund other mutually agreed projects, and a delay in the expected receipt of proceeds from the reissue of spectrum licences previously expected in 2015‑16. Non‑taxation receipts have been revised up by $2.3 billion in 2016‑17, largely reflecting higher expected dividend receipts from the Reserve Bank of Australia and the delayed spectrum licence receipts.

Non‑taxation receipts (including Future Fund earnings) are expected to fall by 5.2 per cent in 2015‑16, largely reflecting lower expected receipts from the sale of spectrum licences. Non‑taxation receipts are expected to grow by 21.2 per cent in 2016‑17, primarily due to increased expected receipts from the sale of spectrum licences and increased State and Territory Government contributions to the National Disability Insurance Scheme (NDIS) in line with the expected increase in participants as the NDIS transitions to full Scheme.

The changes in the individual heads of revenue relative to the 2015‑16 MYEFO are shown in Table 5 and Table 6 for 2015‑16 and 2016‑17 respectively.

Table 7 shows the Australian Government general government cash receipts from 2014‑15 to 2019‑20 by head of revenue.

Table 5: Reconciliation of 2015‑16 general government (cash) receipts
  Estimates   Change on MYEFO
  MYEFO Budget      
  $m $m   $m %
Individuals and other withholding taxes          
Gross income tax withholding 175,200 174,200   -1,000 -0.6
Gross other individuals 41,600 42,000   400 1.0
less: Refunds 27,500 27,800   300 1.1
Total individuals and other withholding tax 189,300 188,400   -900 -0.5
Fringe benefits tax 4,530 4,500   -30 -0.7
Company tax 67,100 64,700   -2,400 -3.6
Superannuation fund taxes 7,730 6,630   -1,100 -14.2
Petroleum resource rent tax 1,000 800   -200 -20.0
Income taxation receipts 269,660 265,030   -4,630 -1.7
Goods and services tax 57,614 57,808   194 0.3
Wine equalisation tax 840 860   20 2.4
Luxury car tax 520 580   60 11.5
Excise and customs duty          
Petrol 6,200 6,200   0 0.0
Diesel 9,320 9,460   140 1.5
Other fuel products 2,420 2,240   -180 -7.4
Tobacco 9,150 9,410   260 2.8
Beer 2,330 2,360   30 1.3
Spirits 1,970 2,040   70 3.6
Other alcoholic beverages(a) 910 910   0 0.0
Other customs duty          
Textiles, clothing and footwear 440 470   30 6.8
Passenger motor vehicles 550 570   20 3.6
Other imports 1,370 1,550   180 13.1
less: Refunds and drawbacks 420 420   0 0.0
Total excise and customs duty 34,240 34,790   550 1.6
Agricultural levies 475 514   39 8.2
Other taxes(b) 4,881 4,925   44 0.9
Indirect taxation receipts 98,570 99,477   907 0.9
Taxation receipts 368,230 364,507   -3,723 -1.0
Sales of goods and services(b) 7,870 7,686   -184 -2.3
Interest received 3,874 2,842   -1,032 -26.6
Dividends 4,516 5,332   816 18.1
Other non-taxation receipts 10,401 7,660   -2,741 -26.4
Non-taxation receipts 26,661 23,520   -3,141 -11.8
Total receipts 394,891 388,027   -6,863 -1.7
Memorandum:          
Total excise 21,330 21,360   30 0.1
Total customs duty 12,910 13,430   520 4.0
Capital gains tax(c) 10,600 10,600   0 0.0
Medicare and DisabilityCare Australia levy 15,014 14,970   -44 -0.3

(a) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(b) Visa application charges were reclassified in the 2015‑16 MYEFO from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The back‑casting relating to the reclassification is reflected in Statement 10 — Historical Series from 2003‑04.

(c) Capital gains tax is part of gross other individuals, company tax and superannuation funds taxes.

Table 6: Reconciliation of 2016‑17 general government (cash) receipts
  Estimates   Change on MYEFO
  MYEFO Budget      
  $m $m   $m %
Individuals and other withholding taxes          
Gross income tax withholding 184,500 181,900   -2,600 -1.4
Gross other individuals 44,900 44,400   -500 -1.1
less: Refunds 28,900 29,350   450 1.6
Total individuals and other withholding tax 200,500 196,950   -3,550 -1.8
Fringe benefits tax 4,700 4,670   -30 -0.6
Company tax 70,700 69,000   -1,700 -2.4
Superannuation fund taxes 9,080 7,380   -1,700 -18.7
Petroleum resource rent tax 1,050 800   -250 -23.8
Income taxation receipts 286,030 278,800   -7,230 -2.5
Goods and services tax 60,991 60,928   -64 -0.1
Wine equalisation tax 860 900   40 4.7
Luxury car tax 510 570   60 11.8
Excise and customs duty          
Petrol 6,400 6,450   50 0.8
Diesel 9,630 9,860   230 2.4
Other fuel products 2,430 2,230   -200 -8.2
Tobacco 9,700 10,160   460 4.7
Beer 2,330 2,390   60 2.6
Spirits 2,010 2,100   90 4.5
Other alcoholic beverages(a) 920 940   20 2.2
Other customs duty          
Textiles, clothing and footwear 300 310   10 3.3
Passenger motor vehicles 590 590   0 0.0
Other imports 1,140 1,170   30 2.6
less: Refunds and drawbacks 420 420   0 0.0
Total excise and customs duty 35,030 35,780   750 2.1
Agricultural levies 485 494   9 1.9
Other taxes(b) 5,219 5,298   79 1.5
Indirect taxation receipts 103,095 103,969   874 0.8
Taxation receipts 389,125 382,769   -6,356 -1.6
Sales of goods and services(b) 9,580 9,176   -404 -4.2
Interest received 4,007 3,262   -745 -18.6
Dividends 4,542 5,833   1,291 28.4
Other non-taxation receipts 8,074 10,244   2,170 26.9
Non-taxation receipts 26,202 28,515   2,312 8.8
Total receipts 415,327 411,284   -4,043 -1.0
Memorandum:          
Total excise 21,530 21,770   240 1.1
Total customs duty 13,500 14,010   510 3.8
Capital gains tax(c) 12,300 12,300   0 0.0
Medicare and DisabilityCare Australia levy 15,592 15,440   -152 -1.0

(a) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(b) Visa application charges were reclassified in the 2015‑16 MYEFO from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The back‑casting relating to the reclassification is reflected in Statement 10 — Historical Series from 2003‑04.

(c) Capital gains tax is part of gross other individuals, company tax and superannuation funds taxes.

Table 7: Australian Government general government (cash) receipts
  Actual   Estimates   Projections
  2014‑15   2015‑16 2016‑17 2017‑18   2018-19 2019-20
  $m   $m $m $m   $m $m
Individuals and other withholding taxes                
Gross income tax withholding 166,352   174,200 181,900 193,300   205,400 218,200
Gross other individuals 38,541   42,000 44,400 48,300   52,700 57,200
less: Refunds 27,033   27,800 29,350 31,250   34,350 35,700
Total individuals and other withholding tax 177,860   188,400 196,950 210,350   223,750 239,700
Fringe benefits tax 4,347   4,500 4,670 4,560   4,750 4,980
Company tax 66,174   64,700 69,000 76,700   84,600 90,700
Superannuation fund taxes 5,873   6,630 7,380 8,960   9,960 10,860
Petroleum resource rent tax(a) 1,870   800 800 800   800 800
Income taxation receipts 256,125   265,030 278,800 301,370   323,860 347,040
Goods and services tax 54,542   57,808 60,928 64,220   67,640 70,683
Wine equalisation tax 792   860 900 990   1,040 1,200
Luxury car tax 520   580 570 570   600 630
Excise and customs duty                
Petrol 6,035   6,200 6,450 6,700   7,050 7,550
Diesel 8,908   9,460 9,860 10,260   10,860 11,620
Other fuel products 2,885   2,240 2,230 2,270   2,350 2,460
Tobacco 8,848   9,410 10,160 10,990   12,310 13,490
Beer 2,310   2,360 2,390 2,450   2,490 2,580
Spirits 1,996   2,040 2,100 2,130   2,200 2,280
Other alcoholic beverages(b) 899   910 940 960   990 1,040
Other customs duty                
Textiles, clothing and footwear 645   470 310 260   280 310
Passenger motor vehicles 732   570 590 630   690 760
Other imports 1,664   1,550 1,170 890   940 1,010
less: Refunds and drawbacks 356   420 420 420   420 420
Total excise and customs duty 34,568   34,790 35,780 37,120   39,740 42,680
Agricultural levies 515   514 494 495   501 505
Other taxes(c)(d) 6,432   4,925 5,298 5,400   5,439 5,539
Indirect taxation receipts 97,369   99,477 103,969 108,795   114,961 121,238
Taxation receipts 353,494   364,507 382,769 410,165   438,821 468,278
Sales of goods and services(d) 7,103   7,686 9,176 11,954   15,499 16,709
Interest received 3,056   2,842 3,262 3,470   3,829 4,248
Dividends 4,745   5,332 5,833 3,462   3,886 4,304
Other non-taxation receipts 9,904   7,660 10,244 8,334   7,886 7,203
Non-taxation receipts 24,807   23,520 28,515 27,221   31,100 32,464
Total receipts 378,301   388,027 411,284 437,385   469,921 500,742
Memorandum:                
Total excise 23,663   21,360 21,770 22,530   23,630 25,140
Total customs duty 10,905   13,430 14,010 14,590   16,110 17,540
Capital gains tax(e) 9,100   10,600 12,300 13,900   15,900 17,500
Medicare and DisabilityCare Australia levy 14,480   14,970 15,440 16,100   16,870 17,690

(a) This includes $60 million of MRRT receipts in 2014‑15. MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) This includes $1.6 billion of carbon price receipts in 2014‑15.

(d) Visa application charges were reclassified in the 2015‑16 MYEFO from non‑taxation receipts to taxation receipts.

(e) Capital gains tax is part of gross other individuals, company tax and superannuation funds taxes. The 2014‑15 reported figure is an estimate.