Statement 4 (continued)
Overview
Relative to the 2014‑15 Budget, expected tax receipts, excluding policy, have been downgraded by around $14.0 billion in 2015‑16 and $51.7 billion over the four years to 2017‑18. Excluding GST, tax receipts have been downgraded by around $14.1 billion in 2015‑16 and $51.9 billion over the four years to 2017‑18. As GST is paid to the States, tax receipts excluding GST represent the tax receipts available to the Australian Government.
Since the 2014‑15 Budget, the fall in commodity prices has had a significant impact on both business profits and wages with material implications for nominal GDP. The forecast for nominal GDP has been revised down significantly, by around $172 billion over the four years to 2017‑18, which has weakened the outlook for tax receipts. Excluding policy decisions, company tax has been revised down by $6.8 billion (9.0 per cent) in 2015‑16 and $19.9 billion over the four years to 2017‑18 since the 2014‑15 Budget. Lower forecasts for wage growth have also led to lower expectations for taxes from individuals and superannuation funds totalling around $4.9 billion (2.4 per cent) in 2015‑16 and $20.6 billion over the four years to 2017‑18.
The rapid fall in the iron ore price has been the largest single contributor to write‑downs to Government tax receipts over the past year. Since the 2014‑15 Budget, forecasts of iron ore export values have been reduced by around $90 billion over the four years to 2017‑18. This contributes to lower nominal GDP and has reduced forecast tax collections by around $20 billion over the same period. Most of this downgrade is from taxes paid by mining companies but there are also effects on taxes paid by other businesses, taxes on wages and other sources of revenue.
Total tax receipts as a per cent of GDP are expected to increase from 22.3 per cent in 2015‑16 to 23.4 per cent by 2018‑19, an increase of 1.0 percentage points (Table 1). Excluding GST the tax‑to‑GDP ratio is expected to increase by 0.9 percentage points.
| Actual | Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|---|
| 2013‑14 | 2014‑15 | 2015‑16 | 2016‑17 | 2017‑18 | 2018‑19 | |||
| Total taxation receipts ($b) | 338.4 | 351.5 | 370.1 | 396.4 | 422.8 | 452.5 | ||
| Growth on previous year (%) | 3.7 | 3.9 | 5.3 | 7.1 | 6.6 | 7.0 | ||
| Per cent of GDP | 21.4 | 21.9 | 22.3 | 22.7 | 23.0 | 23.4 | ||
| Tax receipts excluding GST ($b) | 287.3 | 297.5 | 313.1 | 335.5 | 358.3 | 384.3 | ||
| Growth on previous year (%) | 3.2 | 3.5 | 5.3 | 7.1 | 6.8 | 7.3 | ||
| Per cent of GDP | 18.2 | 18.5 | 18.9 | 19.2 | 19.5 | 19.8 | ||
| Non-taxation receipts ($b) | 22.0 | 25.9 | 27.8 | 26.0 | 30.8 | 35.8 | ||
| Growth on previous year (%) | ‑10.9 | 17.8 | 7.7 | -6.5 | 18.4 | 16.0 | ||
| Per cent of GDP | 1.4 | 1.6 | 1.7 | 1.5 | 1.7 | 1.8 | ||
| Total receipts ($b) | 360.3 | 377.3 | 398.0 | 422.5 | 453.6 | 488.2 | ||
| Growth on previous year (%) | 2.6 | 4.7 | 5.5 | 6.2 | 7.4 | 7.6 | ||
| Per cent of GDP | 22.8 | 23.5 | 24.0 | 24.2 | 24.7 | 25.2 | ||
Since the 2014‑15 Budget, total receipts, including non‑tax receipts, have been revised down by $8.5 billion in 2014‑15, $12.4 billion in 2015‑16 and $49.7 billion over the four years to 2017‑18.