Cash receipts
Total receipts are expected to be $8.2 billion lower than revenue in 2007‑08, including $7.8 billion in taxation receipts, and $6.5 billion lower than revenue in 2008‑09, including $6.6 billion in taxation receipts. Tax receipts are generally driven by the same factors as revenue. However, there will generally be some differences, such as from compliance activity, new tax debts arising and the repayment or write off of past tax debts. These differences will exist for all revenue heads and vary between years.
Since 2007 PEFO the difference between revenue and receipts has been revised up significantly for 2007‑08. The increase largely reflects an unusually strong rise in company debt, which has been caused by the issuing of amended assessments and penalties following ATO audits, relating to a number of income years. It is expected that receipts from these audits will be generated across a number of years. The gap between revenue and receipts is expected to fall as receivables growth returns to a more standard level in 2008‑09, increasing slightly over the projection years with growth more in line with underlying receipts.
Table 5 provides a reconciliation of the Budget's receipts estimates with those at the 2007 PEFO.
Table 5: Reconciliation of total Australian government general government
receipt estimates from the 2007 PEFO
Since 2007 PEFO, total receipts have been revised up by $5.7 billion in 2007‑08.
Taxation receipts account for $4.4 billion of the revision, with higher receipts from individuals and superannuation funds, partly mitigated by lower receipts from companies. Taxation receipts from individuals largely reflect stronger than anticipated growth in employment and individuals' non‑wage income, while superannuation funds had higher earnings in the 2006‑07 income year. This has been partly offset by a recent slowing in earnings growth in the 2007‑08 income year for companies and superannuation funds.
Since 2007 PEFO, total receipts have been revised up by $8.3 billion in 2008‑09.
Taxation receipts have been revised up by $3.0 billion from parameter and other variations reflecting the expected continued strength in individuals' incomes and higher forecast company profits, reflecting further strong rises in commodity prices. This is partly offset by recent falls in share prices reducing capital gains and higher interest expenses for business.
As outlined in the Government's fiscal strategy in Statement 1: Budget Overview, the Government is banking rather than spending revisions to taxation receipts in 2008‑09.
Further information on the difference between the accrual and cash taxation estimates is in Appendix F: Taxation revenue recognition.
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