Part C
agency additional estimates statements
Department of the Treasury
Section 1: Overview, variations
and measures
Overview
There has been no change to the overview included in the 2003-04 Portfolio Budget Statements (page 9).
Map 2: Outcomes and output groups
Additional estimates and variations to outcomes
The Department of the Treasury is seeking $4.603 million in departmental outputs for the HIH claims support scheme restructure ($4.300 million), Comcover increase ($0.093 million) and the implementation of the Budget Estimates and Framework Review ($0.210 million) in Appropriation Bill (No. 3) 2003-04.
The Department of the Treasury is also seeking $0.027 million as an equity injection to assist in implementing the recommendations of the Budget Estimates and Framework Review in Appropriation Bill (No. 4) 2003-04.
Measures
(1) This is a cross outcome measure and will be allocated between Outcome 1, Outcome 2 and Outcome 3.
Budget estimates — enhanced quality and timeliness
The Government will provide additional funding to agencies of $88.5 million over five years (including $0.1 million in 2007-08) to implement the Budget Estimates and Framework Review (BEFR) recommendations. This funding includes capital of $7.4 million over four years.
In the 2003-04 Budget the Government made provision for $78 million over five years to improve the accuracy, responsiveness and effectiveness of agencies’ contribution to the Commonwealth’s budget estimates and framework system and to assist agencies to drive improved financial management and reporting within their organisations. The Government has provided an extra $10.5 million over five years to fund agencies to implement the BEFR recommendations.
Outcome 2 — Effective government spending and taxation arrangements
Note: All Budget Balancing Assistance measure variations are funded through Special Appropriations, under A New Tax System (Commonwealth-State Financial Arrangements) Act 1999.
Budget Balancing Assistance — amendments to the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999
The Government will amend the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 to facilitate the operation of the Act. The amendments, which have been agreed to by the States and Territories, relate to: enabling the Commissioner of Taxation to account for all goods and services tax (GST) refunds; the timing of final determinations; and introducing a mechanism for residual adjustments as States and Territories come off Budget Balancing Assistance (BBA).
Enabling the Commissioner of Taxation to account for all GST refunds when determining the amount of GST revenue to be paid to the States and Territories will overcome a technical problem in the current drafting of the Act which results in more GST revenue being paid out than is actually collected and retained. As GST revenue estimates for 2003-04 (and forward years) are consistent with how the Act was originally intended to operate, there is no financial impact from this amendment.
The amendment to the timing of final determinations will provide sufficient time for all parties to be able to make their determinations in compliance with the requirements of the Act.
The amendments will also introduce a mechanism to allow payments to a State or Territory to be adjusted, as they come off BBA, to fully account for any under or overestimate of payments in a previous financial year.
Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2003-04.
Budget Balancing Assistance — changes to Australia's duty free concessions
The Government will make changes to the duty free concessions available to passengers and Australian-domiciled crew members. These changes are described in the revenue measure Customs duty — changes to Australia’s duty free concessions in the Attorney-General’s portfolio and will have effect from the date of commencement of the Customs by-laws.
For those States and Territories receiving BBA, the Government will adjust this assistance to compensate for the decrease in GST revenue resulting from this measure. Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2003-04.
Further information can be found in the joint press release of 18 September 2003 issued by the Minister for Justice and Customs and the Minister for Small Business and Tourism.
Budget Balancing Assistance — compulsory third party schemes
The Government has amended the GST insurance provisions that apply to an insurer that makes payments or supplies in relation to compulsory third party (CTP) insurance policies, with effect from 1 July 2000. The Government has also introduced provisions that apply to payments and supplies that are made in relation to CTP compensation and other CTP non-insurance policy related matters.
The amendments ensure the correct policy outcomes are achieved for the application of GST to CTP schemes.
For those States and Territories receiving BBA, the Government will adjust this assistance accordingly. However, as the cost to GST revenue cannot be quantified, it is not possible to quantify the impact on BBA. Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2003-04.
Budget Balancing Assistance — treatment of first aid and life saving courses
The Government will allow the suppliers of eligible life saving courses to treat the courses as GST free where the supplier uses an instructor that holds a training qualification issued by one of three specified life saving organisations, with effect from 1 July 2000.
In addition, the Government will remove the restriction that only an entity that is a ‘body’ may treat the supply of an eligible first aid or life saving course as GST-free, extending the treatment to all suppliers.
For those States and Territories receiving BBA, the Government will adjust this assistance to compensate for the decrease in GST revenue resulting from this measure. Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2003-04.
Budget Balancing Assistance — variation to New South Wales’ Guaranteed Minimum Amount
The Government has agreed to include the cost of New South Wales’ GST gambling rebate to registered clubs in that States’ Guaranteed Minimum Amount, with effect from 1 July 2004. New South Wales has taken an in-principle decision to pay a rebate in 2004-05 and subsequent years to registered clubs with an annual gaming income of up to $1 million.
Under the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, the States and Territories were required to adjust their gambling tax arrangements to take account of the impact of the GST on gambling operators. As New South Wales could not lower all its taxes on gambling by the required amount, the New South Wales Government decided to pay clubs an up-front rebate to compensate clubs for the period of 2000-01 to 2003-04. It was agreed that this compensation be included in the Guaranteed Minimum Amount for New South Wales, spread over the years from 2000-01 to 2003-04.
Inclusion of the cost of the New South Wales’ new rebate from 1 July 2004 is expected to lead to an increase in the amount of BBA paid by the Government to New South Wales. Further information on Budget Balancing Assistance can be found in Budget Paper No. 3, Federal Financial Relations 2003-04.
Outcome 3 — Well functioning markets
HIH Claims Support Scheme — closure
The Government has decided to close the HIH Claims Support Scheme to new claims from 27 February 2004 and restructure the administration of the Scheme. Under the restructure, the contract management of the administrative and claims manager functions that remain after the cut-off date to new applications will be consolidated under the Department of the Treasury.
Following the closure, a facility will be provided for policyholders to make late applications where they did not know that they had a right to claim under a HIH policy.
These administrative changes have no impact on the fiscal balance. The administrative costs associated with the Scheme were funded as an up front expense when the Scheme was established in 2000-01.
Further information can be found in the press release of 21 August 2003 issued by the Minister for Revenue and Assistant Treasurer.
Other variations to appropriations
Departmental
Treasury is seeking an additional $0.093 million in departmental outputs as a result of increases to the Comcover premium. This along with a reallocation of corporate cost distribution, has an impact on Treasury’s three outcomes.
Measures — Department of the Treasury summary
Table 1.1: Summary of measures since the 2003-04 Budget
Table 1.1: Summary of measures since the 200304 Budget (continued)
Breakdown of additional estimates by appropriation bill
Table 1.2: Appropriation Bill (No. 3) 2003-04
(1) Original budget as shown in the 2003-04 Portfolio Budget Statements.
(2) Original budget as shown in the 2003-04 Portfolio Budget Statements less section 32 transfers ($3.8 million to the Department of Industry, Tourism and Resources and $2.0 million to the Inspector General of Taxation).
Table 1.3: Appropriation Bill (No. 4) 2003-04
Summary of staffing changes
Table 1.4: Average staffing level (ASL)
Variations to revenue from other sources through net annotated (Section 31) receipts
Table 1.5: Changes to net annotated appropriations (Section 31) receipts
Note: Variations of non-government revenue between outcomes are a result of revised estimates and internal reallocations.
Summary of agency savings
The saving of $1.946 million represents funding no longer required for Compensation — Companies Regulation expenses ($1.666 million) and European Bank for Reconstruction and Development Capital Injections ($0.280 million) due to parameter adjustments.
Departmental and administered revenues
Table 1.6: Departmental and administered revenues
* Original budget as shown in the 2003-04 Portfolio Budget Statements less section 32 transfers ($3.8 million to the Department of Industry, Tourism and Resources and $2.0 million to the Inspector General of Taxation)
Estimates of expenses from special appropriations
Table 1.7: Estimates of expenses from special appropriations
Estimated special account flows
Table 1.8: Estimated special account flows
(1) The revised Opening Balance for 2003-04 (reference A) is the same as the final actual closing balance for 2002-03 (reference B). This balance may have changed from that shown in the 2003-04 Portfolio Budget Statements as the actual for 2002-03 will have been updated to reflect the final budget outcome for the year.
(2) The special accounts are departmental in nature and are governed by the Financial Management and Accountability Act 1997.
This table identifies estimates of special account flows and balances. All special accounts appear under Outcome 3.