Statement 5:
Revenue
(Continued)
Appendix F: Tax expenditures
This appendix contains an overview of the cost of tax expenditures provided to taxpayers through the tax system.
Tax expenditures provide a benefit to a specified activity or class of taxpayer. They can be delivered as a tax exemption, tax deduction, tax offset, concessional tax rate or deferral of a tax liability. The Government can use tax expenditures to allocate resources to different activities or taxpayers in much the same way that it can use direct expenditure programmes.
The data reported in this appendix are largely consistent with the tax expenditure data reported in the 2009 Tax Expenditures Statement published in January 2010. With one exception, the data do not include the impact on tax expenditures of decisions in this Budget. To avoid giving a misleading impression of the tax expenditure aggregates, the Carbon Pollution Reduction Scheme tax expenditures have been removed. See the measure Carbon Pollution Reduction Scheme — deferral in Budget Paper 2 for further information.
Care needs to be taken when analysing tax expenditure data: see Section 2.5 of the 2009 Tax Expenditures Statement for a detailed discussion.
Table F1 contains estimates of total tax expenditures for the period 2006‑07 to 2013‑14.
Table F1: Total measured tax expenditures
Table F1 shows that measured tax expenditures as a proportion of GDP are projected to fall from 8.1 per cent in 2008‑09 to 7.9 per cent in 2009‑10, largely reflecting the lower than expected taxation receipts resulting from the global financial crisis.
Table F2 shows estimates of large measured tax expenditures for 2009‑10.
Table F2: Large measured tax expenditures in 2009‑10
| Tax expenditure | Estimate $m | |
|---|---|---|
Large positive tax expenditures |
||
| E5 | Capital gains tax main residence exemption — discount component | 17,500 |
| E4 | Capital gains tax main residence exemption | 14,000 |
| C5 | Superannuation — concessional taxation of employer contributions | 11,400 |
| C6 | Superannuation — concessional taxation of superannuation entity earnings | 9,800 |
| H23 | GST — Food — uncooked, not prepared, not for consumption on premises of sale and some beverages | 5,600 |
| E14 | Capital gains tax discount for individuals and trusts | 5,380 |
| H14 | GST — Health; medical and health services | 2,700 |
| H11 | GST — Education | 2,550 |
| H2 | GST — Financial Supplies; input taxed treatment | 2,120 |
| A56 | Exemption of Tax Bonus for Working Australians | 2,070 |
| A44 | Exemption of Family Tax Benefit, Parts A and B, including expense equivalent | 2,010 |
| B13 | Exemption from interest withholding tax on certain securities | 1,640 |
| C3 | Concessional taxation of non‑superannuation termination benefits | 1,500 |
| B99 | Small business and general business tax break | 1,470 |
| A23 | Exemption of 30 per cent private health insurance refund, including expense equivalent | 1,110 |
| C8 | Superannuation — deduction and concessional taxation of certain personal contributions | 1,100 |
| A22 | Exemption from the Medicare levy for residents with a taxable income below a threshold | 1,070 |
| D26 | Application of statutory formula to value car benefits | 1,050 |
| H10 | GST — Imported services | 1,050 |
| A67 | Deduction for gifts to approved donees | 970 |
| A32 | Senior Australians' Tax Offset | 950 |
| H3 | GST — Financial Supplies; reduced input tax credits | 860 |
| B109 | Income tax exemption for public and municipal authorities and other local governing bodies | 830 |
| D6 | Exemption for public and not‑for‑profit hospitals | 830 |
| B87 | Statutory effective life caps | 775 |
| D11 | Exemption for public benevolent institutions (excluding public and not‑for‑profit hospitals) | 760 |
| F6 | Exemption from excise for 'alternative fuels' | 750 |
| E31 | Small business capital gains tax 50 per cent reduction | 740 |
| F3 | Concessional rate of excise levied on aviation gasoline and aviation turbine fuel | 720 |
| A48 | Exemption of payments made under the First Home Owners Grant Scheme | 690 |
| B96 | Research and development — research and development tax concession | 640 |
Large negative tax expenditures |
||
| F21 | Customs duty | ‑2,950 |
| F7 | Higher rate of excise levied on cigarettes not exceeding 0.8 grams of tobacco | ‑1,395 |
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