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Part 1: Australian Government Budget Outcome (continued)

Underlying cash balance

The 2013‑14 underlying cash deficit was $48.5 billion, an improvement of $1.4 billion compared with the estimate at the time of the 2014‑15 Budget. This was the result of lower receipts of $3.2 billion, more than offset by lower payments of $4.2 billion and lower net Future Fund earnings of $341 million.

Table 2: Summary of Australian Government general government sector cash flows

	2013‑14 Estimate at 2014-15 Budget $b	2013‑14 Outcome $b	Change on 2014-15 Budget $b
Cash receipts
Operating cash receipts	363.0	359.9	-3.2
Capital cash receipts(a)	0.5	0.5	0.0
Total cash receipts	363.5	360.3	-3.2
Cash payments
Operating cash payments	400.4	396.8	-3.5
Capital cash payments(b)	9.8	9.0	-0.8
Total cash payments	410.2	405.8	-4.3
Finance leases and similar arrangements(c)	0.5	0.6	0.1
GFS cash surplus(+)/deficit(-)	-47.2	-46.1	1.1
Per cent of GDP	-3.0	-2.9
less Net Future Fund earnings	2.7	2.3	-0.3
Underlying cash balance(d)	-49.9	-48.5	1.4
Per cent of GDP	-3.1	-3.1
Memorandum items:
Net cash flows from investments in financial assets for policy purposes	-6.6	-6.4	0.2
plus Net Future Fund earnings	2.7	2.3	-0.3
Headline cash balance	-53.7	-52.5	1.3

(a) Equivalent to cash receipts from the sale of non‑financial assets in the cash flow statement.

(b) Equivalent to cash payments for purchases of non‑financial assets in the cash flow statement.

(c) The acquisition of assets under finance leases decreases the underlying cash balance. The disposal of assets previously held under finance leases increases the underlying cash balance.

(d) Excludes net Future Fund earnings.

Receipts

Total receipts were $360.3 billion in 2013‑14, $3.2 billion lower than estimated at the time of the 2014‑15 Budget. Total receipts (excluding Future Fund earnings) were $357.2 billion in 2013‑14, $3.1 billion lower than estimated at the time of the 2014‑15 Budget.

Total tax receipts for 2013‑14 were $338.4 billion, $3.3 billion (1.0 per cent) lower than expected in the 2014‑15 Budget. Excluding GST, tax receipts were around $3.6 billion (1.3 per cent) lower than expected in the 2014‑15 Budget.

Compared with the 2014‑15 Budget, higher than expected receipts from excise and customs duties and the GST were more than offset by lower than expected receipts from the carbon pricing mechanism, company tax and superannuation fund taxes.

• Excise and customs duty receipts were $591 million (1.7 per cent) above the 2014‑15 Budget estimate, largely because of higher than expected receipts from tobacco products in the month of June. This reflects temporary factors in tobacco clearance patterns. The higher result for 2013‑14 is expected to be largely offset by lower collections in the first half of 2014‑15.
• Receipts from the GST were $391 million (0.8 per cent) above the 2014‑15 Budget estimate, consistent with stronger than expected dwelling investment. Higher than expected GST receipts will be reflected in higher payments to the States.
• Carbon pricing mechanism receipts were $2.8 billion (39.2 per cent) below the 2014‑15 Budget estimate. Much of the shortfall was offset by lower than expected payments, such that the impact on the underlying cash balance was around $0.7 billion. The shortfall was caused by two factors.
• Carbon emissions were lower than expected at the 2014‑15 Budget, reflecting information from interim emissions reports and an estimate of accrued carbon price revenue based on the audited accounts of the Clean Energy Regulator. The estimate is considered preliminary as certain emitters are not required to report in interim emissions reports, and emitters may base their interim report on the previous year's emissions. Information on actual 2013‑14 emissions will become available following the final emissions reporting in October 2014.
• Free permits were issued to eligible businesses and could either be used to extinguish a business's carbon tax liability, be sold to another business or be sold back to the Government. The use of free carbon permits to extinguish liabilities was greater than assumed at the 2014‑15 Budget, resulting in less permits purchased, and hence lower receipts. Greater use of free permits also meant that less free permits were sold back to the Government than was expected at the 2014‑15 Budget, resulting in payments being lower by an equivalent amount.
• Company tax receipts were $727 million (1.1 per cent) below the 2014‑15 Budget estimate, consistent with lower than expected monthly instalments and a higher level of refunds relating to previous income years.
• Receipts from superannuation fund taxes were $429 million (6.6 per cent) below the 2014‑15 Budget estimate.
• Receipts from total individuals and other withholding taxes were $208 million (0.1 per cent) below the 2014‑15 Budget estimate.

Table 3: Australian Government general government sector (cash) receipts

	2013‑14 Estimate at 2014-15 Budget $m	2013‑14 Outcome $m	Change on 2014-15 Budget $m
Individuals and other withholding taxes
Gross income tax withholding	156,700	156,211	-489
Gross other individuals	34,200	34,787	587
less: Refunds	27,100	27,407	307
Total individuals and other withholding tax	163,800	163,592	-208
Fringe benefits tax	4,090	4,077	-13
Company tax	68,000	67,273	-727
Superannuation fund taxes	6,530	6,101	-429
Minerals resource rent tax(a)	170	143	-27
Petroleum resource rent tax	1,400	1,368	-32
Income taxation receipts	243,990	242,553	-1,437
Goods and services tax	51,003	51,394	391
Wine equalisation tax	760	766	6
Luxury car tax	430	464	34
Excise and customs duty
Petrol	6,000	6,053	53
Diesel	8,990	8,940	-50
Other fuel products	3,690	3,624	-66
Tobacco	7,850	8,498	648
Beer	2,370	2,348	-22
Spirits	1,890	1,909	19
Other alcoholic beverages(b)	960	927	-33
Other customs duty
Textiles, clothing and footwear	770	789	19
Passenger motor vehicles	920	921	1
Other imports	1,650	1,631	-19
less: Refunds and drawbacks	360	319	-41
Total excise and customs duty	34,730	35,321	591
Carbon pricing mechanism	7,180	4,363	-2,817
Agricultural levies	476	495	19
Other taxes	3,074	3,012	-61
Indirect taxation receipts	97,653	95,815	-1,837
Taxation receipts	341,643	338,368	-3,275
Sales of goods and services	8,764	8,579	-185
Interest received	3,210	3,128	-81
Dividends	3,040	2,978	-62
Other non-taxation receipts	6,840	7,268	428
Non-taxation receipts	21,854	21,954	100
Total receipts	363,496	360,322	-3,174
Memorandum:
Total excise	25,720	26,075	355
Total customs duty	9,010	9,246	236
Medicare and DisabilityCare Australia levy	10,480	10,500	20

(a) Net receipts from the MRRT was $0.1 billion in 2013‑14 which represents the net receipt impact across different revenue heads. These include offsetting reductions in company tax (through deductibility) and interactions with other taxes.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

Non‑tax receipts (excluding Future Fund earnings) were $18.8 billion in 2013‑14, $169 million higher than estimated at the time of the 2014‑15 Budget. This increase largely relates to greater than expected returns of unclaimed monies which were $123 million (15.1 per cent) higher than estimated at the time of the 2014‑15 Budget.

Payments

Total cash payments were $406.4 billion in 2013‑14, $4.2 billion lower than estimated at the time of the 2014‑15 Budget. Total payments (excluding Future Fund payments) were $405.6 billion, $4.5 billion lower than estimated at the time of the 2014‑15 Budget. The outcome largely reflects decreases in:

• redemption of free carbon permits under the buy‑back facility ($2.2 billion). Permit holders are able to redeem permits, through the buy‑back facility or against a tax liability, until February 2015. Much of the impact of lower payments was offset by lower than expected receipts;
• Department of Defence spending ($438 million) due to foreign exchange effects and lower than anticipated spending on Defence operations;
• Illegal Maritime Arrival numbers and the closure of a number of Immigration Detention Network facilities ($370 million);
• demand and costs for a range of demand‑driven health programmes, including mental health, rural workforce and pharmaceutical related programmes ($362 million);
• payments in a range of national partnership agreements, including road transport ($205 million) and school education ($186 million). The lower payments largely reflect delays in achievement of milestones related to the delivery of projects;
• projected number of unemployment benefit recipients under the Job Seeker Income Support programme ($178 million);
• payments by the Australian Renewable Energy Agency, which largely reflects the Moree Solar Farm project being delayed from 2013‑14 to 2014‑15 due to slippage in finalising an agreement to connect to the New South Wales electricity network ($172 million);
• projected average payment rates under the Income Support for Seniors programme as a result of stronger than anticipated increases in asset values held by recipients of the age pension ($128 million); and
• forecast flexible and residential care subsidies resulting in lower than estimated payments in Residential and Flexible Care ($105 million).

These and other decreases were partially offset by the extinguishment of the provision for underspends in the Contingency Reserve.

Net Future Fund Earnings

The underlying cash balance excludes net Future Fund earnings. Net Future Fund earnings were $2.3 billion in 2013‑14, $341 million lower than estimated at the time of the 2014‑15 Budget. This largely reflects payables to suppliers lower than estimated at the time of the 2014‑15 Budget.

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