Statement 5: Revenue (Continued)
This appendix contains an overview of the size 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 are consistent with the data reported in the 2012 Tax Expenditures Statement (2012 TES) published in January 2013. The data do not include the impact of decisions in this Budget on tax expenditures.
Care needs to be taken when analysing tax expenditure data: see the 2012 TES for a detailed discussion.
Table E1 contains estimates of total tax expenditures calculated on a revenue foregone basis (see 2012 TES) for the period 2009‑10 to 2016‑17.
As shown in Table E1, superannuation is forecast to become the largest group of tax expenditures. The Government has announced a range of policies designed to reduce the growth of superannuation tax expenditures over the next 10 years, including reducing the concession on contributions for very high income earners in the 2012‑13 Budget, and better targeting the tax exemption for earnings on superannuation assets supporting retirement income streams in this year's Budget.
| Year | Housing $m |
Superannuation $m |
Other
tax expenditures $m |
Total $m |
Tax expenditures as a proportion of GDP (%) |
|---|---|---|---|---|---|
| 2009‑10 (est) | 40,000 | 24,089 | 49,842 | 113,931 | 8.8 |
| 2010‑11 (est) | 35,500 | 27,450 | 52,032 | 114,982 | 8.2 |
| 2011‑12 (est) | 31,000 | 30,262 | 50,072 | 111,334 | 7.5 |
| 2012‑13 (proj) | 30,000 | 31,846 | 53,174 | 115,020 | 7.6 |
| 2013‑14 (proj) | 29,500 | 34,645 | 55,436 | 119,581 | 7.5 |
| 2014‑15 (proj) | 30,000 | 39,615 | 58,881 | 128,496 | 7.7 |
| 2015‑16 (proj) | 30,500 | 44,815 | 61,961 | 137,276 | 7.8 |
| 2016‑17 (proj) | 31,000 | 50,655 | 64,792 | 146,447 | 7.9 |
Table E2 shows estimates of large measured tax expenditures for 2012‑13.
| Tax expenditure | Estimate $m | |
|---|---|---|
| Large positive tax expenditures | ||
| C6 | Superannuation — concessional taxation of superannuation entity earnings | 17,100 |
| E6 | Capital gains tax main residence exemption — discount component | 16,500 |
| E5 | Capital gains tax main residence exemption | 13,500 |
| C5 | Superannuation — concessional taxation of employer contributions | 13,150 |
| H29 | GST — Food; uncooked, not prepared, not for consumption on premises of sale | |
| and some beverages | 6,200 | |
| E17 | Capital gains tax discount for individuals and trusts | 4,180 |
| H16 | GST — Education | 3,550 |
| H19 | GST — Health; medical and health services | 3,000 |
| H2 | GST — Financial Supplies; input taxed treatment | 2,850 |
| A43 | Exemption of Family Tax Benefit, Parts A and B | 2,050 |
| I6 | CPM uncovered sectors — Agriculture | 1,970 |
| B16 | Exemption from interest withholding tax on certain securities | 1,730 |
| A21 | Exemption of 30 per cent private health insurance rebate, including expense | |
| equivalent | 1,570 | |
| C3 | Concessional taxation of non-superannuation termination benefits | 1,500 |
| D14 | Philanthropy — Exemption for public benevolent institutions (excluding public and | |
| not-for-profit hospitals) | 1,410 | |
| B91 | Statutory effective life caps | 1,335 |
| A20 | Exemption from the Medicare levy for residents with a taxable income below a | |
| threshold | 1,300 | |
| A64 | Philanthropy — Deduction for gifts to deductible gift recipients | 1,120 |
| D11 | Philanthropy — Exemption for public and not-for-profit hospitals and public | |
| ambulance services | 1,100 | |
| I1 | CPM uncovered sectors — Deforestation | 1,090 |
| C8 | Superannuation — deduction and concessional taxation of certain personal | |
| contributions | 1,050 | |
| H21 | GST — Health; residential care, community care and other care services | 960 |
| H3 | GST — Financial Supplies; reduced input tax credits | 940 |
| D19 | Application of statutory formula to value car benefits | 930 |
| F8 | Concessional rate of excise levied on aviation gasoline and aviation turbine fuel | 930 |
| H6 | GST — Water, sewerage and drainage | 880 |
| B93 | Deduction for capital works expenditure | 825 |
| H5 | GST — Child Care Services | 820 |
| B101 | Research and development — Non-refundable tax offset | 800 |
| B4 | Income tax exemption for local government bodies | 720 |
| H10 | GST — Importation threshold | 650 |
| A32 | Senior Australians' and Pensioners' Tax Offset | 610 |
| Large negative tax expenditures | ||
| F25 | Customs duty | -2,960 |
| F10 | Excise levied on fuel oil, heating oil and kerosene | -555 |
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