Australian Taxation Office
Section 1:  Overview, Additional Estimates and Variations to Outcomes
Overview
There has been no change to the overview to that included in the 1999‑2000 Portfolio Budget Statements.
Additional Estimates and Variations to Outcomes
The following variations contributed to a net increase in Departmental Appropriations of $118.066 million for the Australian Taxation Office.
GST — Exclusion of Food from GST
In May 1999, the Prime Minister announced a Post Budget Agreement concluded between the Government and the Australian Democrats on the exclusion of basic food from the GST.
Additional departmental appropriation of $60 million per year will be required by the Australian Taxation Office to cover increased administration costs arising from the partial removal of food from the GST base. 
Diesel Fuel and Alternative Fuels Grant Scheme
The Government’s A New Tax System (ANTS) initiatives included a reduction in the effective diesel excise paid by heavy on‑road transport. As the result of a Post Budget Agreement reached between the Government and the Australian Democrats a restructured diesel fuel package will be adopted which addresses environmental issues.
The new arrangements will:
•	Amend the Customs and Excise Act to implement changes to the Diesel Fuel Rebate Scheme and extend both the range of eligible uses and magnitude of benefits available under the Scheme, and
•	Introduce the Diesel and Alternative Fuels Grants Scheme Act 1999 which will provide a grant for certain on‑road transport. The grant will be available for the use of diesel fuel, and also the use of other fuel alternatives to diesel fuel.
The cost of implementing the new arrangements will require an increase in departmental appropriations of $43.720 million and an equity injection of  $20.0 million in 1999‑00.
IT Outsourcing Effect on ANTS initiatives announced at Budget
The recent announcement of the outsourcing of the ATO’s IT infrastructure has resulted in a reduction in equity of  $12.988 million and an increase in departmental appropriation of $6.5 million in 1999‑00.
IT Outsourcing Effect on the GST initiative
The recent announcement of the outsourcing of the ATO’s infrastructure has resulted in a reduction in equity of $18.177 million and an increase in departmental appropriation of $10.274 million in 1999‑00.
Interest Revenue
The estimated interest revenue relating to devolved banking has been revised and this has led to an increase in departmental appropriations of $3.153 million in 1999‑00.
Capital User Charge
The movements between equity and appropriations has led to a reduction in required supplementation of Capital User Charge of $5.581 million in 1999‑00.
1998‑99 Carryover
The carryover from 1998‑99 of $24.260 million is included as an equity injection.

	Australian Taxation Office
Commissioner:  Mr Michael Carmody		
							
	Overall Outcome
Strong, sustainable economic growth and the improved wellbeing of Australians		
							
	Outcome 1
Effectively managed and shaped systems that support and fund services for Australians and give effect to social and economic policy through the tax system		
							
	Output Group 1.1
Australian Taxation Office
Total Price of Outputs:  $3,353.81 million
Agency Outcomes Appropriation:  $1,633.81 million
Total Administered Expenses:  $ 1,720.20 million		

Output 1.1.1
Contribute to policy advice and legislation		Output 1.1.2
Provide revenue		Output 1.1.3
Provide transfers		Output 1.1.4
Support other agencies	

Australian Taxation Office — Appropriations 1999‑2000
Table 1.1:  Summary of Measures since the 1999‑2000 Budget
Measure	Outcome	Output Groups Affected	Appropriations ($’000)
1999‑2000	Appropriations ($’000)
2000‑2001	Appropriations ($’000)
2001‑2002	Appropriations ($’000)
2002‑2003	
			Admin Expenses	Agency Outputs	Total	Admin Expenses	Agency Outputs	Total	Admin Expenses	Dept Outputs	Total	Admin Expenses	Dept Outputs	Total	
GST — exclusion of food from
GST — expense	
1	
1.1	
— 	
60,000	
60,000	
—	
60,000	
60,000	
—	
60,000	
60,000	
—	
60,000	
60,000	
Diesel fuel and alternative fuels grant
scheme — expense	
1	
1.1	
—	
43,720	
43,720	
670,654	
87,035	
757,689	
701,995	
90,176	
792,171	
744,170	
90,176	
834,346	
Diesel fuel and alternative fuels grant
scheme — Capital	
1	
1.1	
—	
20,000	
20,000	
—	
—	
—	
—	
—	
—	
—	
—	
—	

Breakdown of Additional Estimates by Appropriations Bill
Table 1.2:  Appropriation Bill (No 3) 1999‑2000
	1998‑99 Estimated Expenses
$’000	1999‑00 Budget

$’000	1999‑00 Revised

$’000	Additional Estimates 

$’000	Reduced Estimates 

$’000	
Departmental Outputs
Outcome 1
Effectively managed and shaped systems that support and fund services for Australians and give effect to social and economic policy through the tax system	

1,166,619	

1,515,746	

1,633,812	

118,066	

—	
Total	1,166,619	1,515,746	1,633,812	118,066	—	

Table 1.3:  Appropriation Bill (No 4) 1999‑2000
	1998‑99 Estimated Expenses
$’000	1999‑00 Budget

$’000	1999‑00 Revised

$’000	Additional Estimates 

$’000	Reduced Estimates 

$’000	
Equity Injections and Loans						
Equity Injections	—	99,734	88,569	—	(11,165)	
Loans	—	—	—	—	—	
Carryover from previous years	—	—	24,260	24,260	—	
Administered Capital	—	—	—	—	—	
Total	—	99,734	112,829	24,260	(11,165)	

The Underlying Outlays for 1998‑99 is $2,162 million.
Note:  Underlying outlays is a cash concept and, as this figure is cash, it is not directly comparable with the other accrual figures in this document. This information is being provided to give additional information to support the transition from cash to accrual budgeting.

Table 1.4:  Staff Years (Number)
	1999‑00
Budget	1999‑00
Revised	Variation	
Outcome 1	16,289	16,608	319	

Section 2:  Revisions to Outcomes and Outputs
Outcomes and Output Groups
The Australian Taxation Office (ATO) has not made any changes to its outcome or outputs since the 1999‑2000 Portfolio Budget Statements.
Revised Performance Information and Level of Achievement — 1999‑2000
The ATO has not made any changes to its Performance Information since the 1999‑2000 Portfolio Budget Statements.

Section 3:  Budget Financial Statements
The budget financial statements will form the basis of the financial statements that will appear in the Australian Taxation Office 1999‑2000 Annual Report, and form the basis for the input into the Whole of Government Accounts.
Budget Statement of Revenues and Expenses (Budget Operating Statement)
This statement provides a picture of the expected financial results for the ATO by identifying full accrual expenses and revenues, which highlights whether the ATO is operating at a sustainable level.
Budget Statement of Assets and Liabilities (Budget Balance Sheet)
This statement shows the financial position of the ATO. It enables decision-makers to track the management of the ATO’s assets and liabilities.
Budget Cash Flow Statement
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
Capital Budget
This statement shows all proposed capital expenditure funded either through the Budget as appropriations or from internal sources.

Table 3.1:  Budget Statement of Revenue and Expenses
	Estimated
Actual	Revised Budget	Estimated	
	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Agency Revenue and Expenses						
Revenues						
Revenue from government						
Ordinary annual appropriations (net appropriations)	
1,149,507	
1,633,812	
1,701,407	
1,600,953	
1,586,961	
Revenue from other sources						
Sales of goods and services	45,106	79,417	78,382	75,591	73,524	
Other revenue from other sources	
—	
2,500	
2,500	
2,500	
2,500	
Total Revenue	1,194,613	1,715,729	1,782,289	1,679,044	1,662,985	
Expenses						
Employees	795,583	1,048,581	1,049,526	1,001,026	988,715	
Depreciation and amortisation	62,598	57,084	96,034	113,295	125,315	
Other costs of providing goods and services	
485,185	
599,651	
628,186	
549,180	
506,945	
Other	283	45	45	45	45	
Total Expenses	1,343,649	1,705,361	1,773,791	1,663,546	1,621,020	
Extraordinary Item	(13,794)	—	—	—	—	
Operating Result Before Capital User Charge	
(135,242)	
10,368	
8,498	
15,498	
41,965	
Capital User Charge	—	—	2,331	7,037	14,387	
Accumulated Results at Year End	
(135,242)	
10,368	
6,167	
8,461	
27,578	
Net contribution to government						
Administered Revenue and Expenses						
Revenue						
Income tax	106,738,865	109,359,308	111,115,861	115,265,139	122,932,299	
Sales tax **	15,215,131	16,308,281	2,106,509	841,000	877,000	
Excise duty **	8,402,528	18,421,793	18,502,931	19,290,548	20,123,305	
Other taxes fees and fines	3,624,403	3,629,939	3,980,019	4,240,277	4,399,898	
Other sources of non‑taxation revenue	
99,426	
502,000	
502,000	
452,000	
442,000	
Appropriations*	1,116,394	1,720,200	2,948,622	3,078,930	3,254,286	
Total Revenue	135,196,747	149,941,521	139,155,941	143,167,894	152,028,788	

Table 3.1:  Budget Statement of Revenue and Expenses (continued)
	Estimated
Actual	Revised Budget	Estimated	
	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Expenses						
Net write‑down of assets	295,545	626,000	566,000	596,000	613,000	
Other goods and services expenses	
73,817	
160,200	
830,854	
862,195	
904,370	
Total Expenses	369,362	786,200	1,396,854	1,458,195	1,517,370	
Operating Result	134,827,385	149,155,321	137,759,087	141,709,699	150,511,418	
Abnormal items						
Adjusted Operating Result	134,827,385	149,155,321	137,759,087	141,709,699	150,511,418	
Transfer from Capital	2,541	—	—	—	—	
Cash transfer to consolidated revenue	
(130,762,571)	
(148,396,321)	
(133,161,087)	
(143,453,699)	
(152,099,418)	
Accumulated results after transfers	
4,067,355	
759,000	
4,598,000	
(1,744,000)	
(1,588,000)	
*	The diesel fuel rebate appropriation in 1998‑99 is for the period from 20 October 1998.
**	Refundable payments have been included from 1999‑00.

Table 3.2:  Budget Statement of Assets and Liabilities
	Estimated
Actual	Revised Budget	Estimated	
	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Agency Assets and Liabilities						
Debt						
Loans	500	499	499	499	499	
Leases	53,218	44,560	35,643	27,370	2,0253	
Total Debt	53,718	45,059	36,142	27,869	20,752	
Provisions and Payables						
Employees	293,894	309,521	332,544	348,644	364,809	
Suppliers	39,071	64,071	64,020	64,020	64,020	
Total Provisions and Payables	332,965	373,592	396,564	412,664	428,829	
Equity						
Accumulated results	(154,197)	(143,829)	(137,662)	(129,201)	(101,623)	
Reserves	(6,173)	(548)	5,077	10,702	16,327	
Capital	24,260	112,829	152,337	174,157	196,620	
Total Equity	(136,110)	(31,548)	19,752	55,658	111,324	
Total Liabilities and Equity	250,573	387,103	452,458	496,191	560,905	
Financial Assets						
Cash	32,815	38,047	122,518	200,836	332,567	
Receivables	25,205	10,475	10,475	10,760	11,045	
Accrued revenue	—	—	100	100	100	
Other financial assets	3,040	3,016	2,992	2,498	2,292	
Total Financial Assets	61,060	51,538	136,085	214,194	346,004	
Non‑financial Assets						
Land and Buildings	1,490	1,466	1,442	1,418	1,393	
Infrastructure, plant and equipment	
90,795	
114,433	
90,263	
85,545	
60,636	
Intangibles	83,358	205,716	210,668	181,034	138,872	
Other	13,870	13,950	14,000	14,000	14,000	
Total Non‑financial Assets	189,513	335,565	316,373	281,997	214,901	
Total Assets	250,573	387,103	452,458	496,191	560,905	
Administered Assets and Liabilities						
Provisions and payables						
Other	209,997	209,997	209,997	209,997	209,997	
Total provisions and payables	209,997	209,997	209,997	209,997	209,997	
Equity						
Total accumulated results	4,453,037	5,212,037	9,810,037	8,066,037	6,478,037	
Total capital	—	—	—	—	—	
Total Equity	4,453,037	5,212,037	9,810,037	8,066,037	6,478,037	
Total Liabilities and Equity	4,663,034	5,422,034	10,020,034	8,276,034	6,688,034	

Table 3.2:  Budget Statement of Assets and Liabilities (continued)
	Estimated
Actual	Revised Budget	Estimated	
	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Financial assets						
Cash	541,415	541,415	541,415	541,415	541,415	
Receivables	4,119,078	4,878,078	9,476,078	7,732,078	6,144,078	
Investments	2,541	2,541	2,541	2,541	2,541	
Total financial assets	4,663,034	5,422,034	10,020,034	8,276,034	6,688,034	
Total assets	4,663,034	5,422,034	10,020,034	8,276,034	6,688,034	

Table 3.3:  Budget Cash Flow Statement
	Estimated
Actual	Revised Budget	Estimated	
	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Agency Cash Flows						
Operating Activities						
Cash Received						
Appropriations	1,253,342	1,633,812	1,701,407	1,600,953	1,586,961	
Sales of goods and services	43,954	62,779	61,588	58,639	56,572	
Interest	—	2,500	2,500	2,500	2,500	
Other	—	—	50	50	50	
Total Cash Received	1,297,296	1,699,091	1,765,545	1,662,142	1,646,083	
Cash Used						
Employees	798,421	1,025,233	1,017,798	975,296	962,503	
Suppliers	410,023	577,188	630,588	551,363	508,260	
Other	—	100	—	—	—	
Total Cash Used	1,208,444	1,602,521	1,648,386	1,526,659	1,470,763	
Net Cash from Operating Activities	
88,852	
96,570	
117,159	
135,483	
175,320	
Investing Activities						
Cash Received						
Proceeds from sale of property, plant and equipment	
1,035	
15,000	
—	
—	
—	
Other	5,960	—	—	—	—	
Total Cash Received	6,995	15,000	—	—	—	
Cash Used						
Purchase of property, plant and equipment	
75,065	
194,907	
69,865	
71,948	
51,663	
Total Cash Used	7,5065	194,907	69,865	71,948	51,663	
Net Cash from Investing Activities	
(68,070)	
(179,907)	
(69,865)	
(71,948)	
(51,663)	
Financing Activities						
Cash Received						
Capital Injections	—	88,569	39,508	21,820	22,463	
Total Cash Received	—	88,569	39,508	21,820	22,463	
Cash Used						
Capital user charge paid	—	—	2,331	7,037	14,387	
Repayment of borrowings	13,768	—	—	—	—	
Total Cash Used	13,768	—	2,331	7,037	14,387	
Net Cash from Financing Activities	
(13,768)	
88,569	
37,177	
14,783	
8,076	
Net increase/decrease in cash held	7,014	5,232	84,471	78,318	131,733	
Add cash as at 1 July	25,801	32,815	38,047	122,518	200,836	
Cash as at 30 June	32,815	38,047	122,518	200,836	332,567	

Table 3.3:  Budget Cash Flow Statement (continued)
	Estimated
Actual	Revised Budget	Estimated	
	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Administered cash flows						
Taxes fees and fines	130,911,453	147,954,321	132,599,087	143,001,699	151,657,418	
Cash received						
From appropriations	1,116,394	1,720,200	2,948,622	3,078,930	3,254,286	
Other	62,580	442,000	562,000	452,000	442,000	
Total cash received	132,090,426	150,116,521	136,109,709	146,532,629	155,353,704	
Cash used						
Cash to the Consolidated Revenue Fund	
130,762,571	
148,396,321	
133,161,087	
143,453,699	
152,099,418	
Other	1,116,394	1,720,200	2,948,622	3,078,930	3,254,286	
Total cash used	131,878,964	150,116,521	136,109,709	146,532,629	155,353,704	
Net cash from operating activities	
211,462	
—	
—	
—	
—	
Cash at the end of reporting period	
541,415	
541,415	
541,415	
541,415	
541,415	
Capital Budget
Table 3.4:  Capital Budget
	Estimated
Actual	Revised Budget	Estimated	
Capital Appropriations	1998‑99
$’000	1999‑00
$’000	2000‑01
$’000	2001‑02
$’000	2002‑03
$’000	
Total Equity Injections	—	88,569	39,508	21,820	22,463	
Previous year’s carryover	—	24,260	—	—	—	
Total Capital Appropriations	—	112,829	39,508	21,820	22,463	
Represented by:						
Purchase of non‑current assets	—	191,743	65,427	65,516	23,813	
Other Items	—	24,260				
Total	—	216,003	65,427	65,516	23,813	
Purchase of Non‑current assets						
Funded by Capital Appropriation	—	88,569	39,508	21,820	22,463	
Funded Internally by Departmental resources	
—	
103,174	
25,919	
43,696	
1,350	
Total	—	191,743	65,427	65,516	23,813	
Notes to the Financial Statements
Notes to the Agency Statements
Details of Agency items in the financial statements included in Table 3.1 to 3.4 have been prepared in accordance with Schedule 2 of the Finance Minister’s Orders for 1997‑98.
The budget statements and estimated forward years have been prepared to reflect the following matters.
Cost of Administering Goods and Services Tax
Agency statements for 1999‑00 and forward years include the estimated reduction in required equity injection and the increase in appropriations as a result of the outsourcing of the ATO’s IT infrastructure.
Costs of Administering Other Tax Reform Proposals
Agency statements for 1999‑00 and forward years include the estimated reduction in required equity injection and the increase in appropriations as a result of the outsourcing of the ATO’s IT infrastructure.
Operating Loss 1998‑99
The ATO’s operating loss for 1998‑99 was contributed to by several factors including:
	$m	
Depreciation and Amortisation	62.8	
Asset write off and losses	6.2	
EDS sale loss	41.2	
Non recovery of CSA costs	10.4	
Profit on restructure	-13.8	
Other	28.4	
Total	135.2	
Notes to the Administered Statements
Details of Administered items in the financial statements included in Table 3.1 to 3.3 have been prepared in accordance with Schedule 2 of the Finance Minister’s Orders for 1997‑98. These statements incorporate a change in revenue recognition policy from prior years. A detailed explanation of the revenue recognition policy can be found in the Portfolio Budget Statements 1999‑00.

Appendix 1
Non‑Appropriation Agency and Administered Revenue
	Actual Revenue 	Estimated Revenue 	
	1998‑99
$’000	1999‑00
$’000	
External Agency Revenue	45,106	81,917	
Total Taxation Revenue	133,980,927	147,719,321	
Superannuation Guarantee (Administration) Act 1992 — Shortfalls, penalties and fines	
86,722	
80,000	
Miscellaneous receipts	12,704	12,000	
Superannuation Industry (Supervision) Act 1993 — Unclaimed moneys	
83	
200	
GST administration charged to States	—	410,000	
Total Estimated Revenue	134,125,542	148,303,438	

Appendix 2
Estimates of Expenses from Special Appropriations
	Actual
Expenses 	Estimated Expenses 	
	1998‑99
$’000	1999‑00
$’000	
			
Refunds of Receipts — Taxation Administration Act 1953	10,363,999	11,281,714	
Less amount of Refunds deducted from Receipts items	(10,363,999)	(11,281,714)	
Diesel fuel rebate	1,027,230	1,560,000	
Superannuation Guarantee (Administration) Act 1992 — Distribution of Charges	
77,370	
40,000	
Superannuation Industry (Supervision) Act 1993 — Repayments of unclaimed moneys	
83	
200	
Taxation Administration Act 1953 — Taxation (Interest on Overpayments and Early Payments) Act 1983	
50,911	
120,000	
Total Estimated Expenses	1,155,594	1,720,200