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Statement 5: Revenue (Continued)

Appendix F: Tax expenditures

This attachment 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, reduced tax rate or deferral of 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 programs.

The data reported in this appendix is consistent with the data reported in the 2010 Tax Expenditures Statement published in January 2011. The data does not include the impact of decisions in this Budget on tax expenditures.

Care needs to be taken when analysing tax expenditure data: see the 2010 Tax Expenditures Statement for a detailed discussion.

Table F1 contains estimates of total tax expenditures for the period 2007‑08 to 2014‑15.

Table F1: Total measured tax expenditures

Table F1 shows that measured tax expenditures as a proportion of GDP have fallen from 10.6 per cent in 2007‑08 to 8.8 per cent in 2009‑10.

Table F2 shows estimates of large measured tax expenditures for 2010‑11.

Table F2: Large measured tax expenditures in 2010‑11

Tax expenditure		Estimate $m
Large positive tax expenditures
E5	Capital gains tax main residence exemption — discount component	22,500
E4	Capital gains tax main residence exemption	17,500
C5	Superannuation — concessional taxation of employer contributions	14,300
C6	Superannuation — concessional taxation of superannuation entity earnings	12,200
H28	GST — food — uncooked, not prepared, not for consumption on premises of sale and some beverages	5,900
E14	Capital gains tax discount for individuals and trusts	5,490
H19	GST — health; medical and health services	2,950
H16	GST — education	2,600
B110	Small business and general business tax break	2,350
H2	GST — financial supplies; input taxed treatment	2,200
B16	Exemption from interest withholding tax on certain securities	2,040
A45	Exemption of Family Tax Benefit, Parts A and B, including expense equivalent	1,950
C3	Concessional taxation of non‑superannuation termination benefits	1,350
A24	Exemption of 30 per cent private health insurance refund, including expense equivalent	1,250
A23	Exemption from the Medicare levy for residents with a taxable income below a threshold	1,130
D18	Application of statutory formula to value car benefits	1,110
C8	Superannuation — deduction and concessional taxation of certain personal contributions	1,050
F3	Concessional rate of excise levied on aviation gasoline and aviation turbine fuel	1,000
H11	GST — imported services	1,000
H3	GST — financial supplies; reduced input tax credits	990
A33	Senior Australians' Tax Offset	960
D11	Philanthropy — exemption for public and not‑for‑profit hospitals and public ambulance services	920
D14	Philanthropy — exemption for public benevolent institutions (excluding public and not‑for‑profit hospitals)	920
B95	Statutory effective life caps	915
B4	Income tax exemption for local government bodies	820
A66	Philanthropy — deduction for gifts to deductible gift recipients	760
A49	Exemption of payments made under the First Home Owners Grant Scheme	760
H6	GST — water, sewerage and drainage	700
B106	Research and development — research and development tax concession	700
Large negative tax expenditures
F20	Customs duty	‑2,740
F7	Higher rate of excise levied on cigarettes not exceeding 0.8 grams of tobacco	‑1,530

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