Part 3: Fiscal Strategy and Outlook (continued)
Fiscal Outlook
Budget aggregates
An underlying cash deficit of $37.4 billion (2.3 per cent of GDP) is expected in 2015‑16, improving to a deficit of $14.2 billion (0.7 per cent of GDP) in 2018‑19.
A headline cash deficit of $48.2 billion (2.9 per cent of GDP) is expected in 2015‑16, improving to a deficit of $23.8 billion (1.2 per cent of GDP) in 2018‑19.
In accrual terms, a fiscal deficit of $35.8 billion (2.2 per cent of GDP) is expected in 2015‑16, improving to a deficit of $10.2 billion (0.5 per cent of GDP) in 2018‑19.
Table 3.3 provides key budget aggregates for the Australian Government general government sector.
| Estimates | |||||
|---|---|---|---|---|---|
| 2015‑16 | 2016‑17 | ||||
| Budget $b |
MYEFO $b |
Budget $b |
MYEFO $b |
||
| Receipts | 398.0 | 394.9 | 422.5 | 415.3 | |
| Per cent of GDP | 24.0 | 23.9 | 24.2 | 24.1 | |
| Payments(a) | 429.8 | 428.3 | 444.9 | 445.3 | |
| Per cent of GDP | 25.9 | 25.9 | 25.5 | 25.8 | |
| Net Future Fund earnings | 3.3 | 4.0 | 3.4 | 3.7 | |
| Underlying cash balance(b) | -35.1 | -37.4 | ‑25.8 | ‑33.7 | |
| Per cent of GDP | -2.1 | -2.3 | ‑1.5 | ‑2.0 | |
| Revenue | 405.4 | 401.0 | 433.4 | 423.2 | |
| Per cent of GDP | 24.5 | 24.3 | 24.8 | 24.5 | |
| Expenses | 434.5 | 432.2 | 452.7 | 451.2 | |
| Per cent of GDP | 26.2 | 26.2 | 25.9 | 26.1 | |
| Net operating balance | -29.1 | -31.3 | ‑19.2 | ‑28.0 | |
| Net capital investment | 3.9 | 4.5 | 4.2 | 4.7 | |
| Fiscal balance | -33.0 | -35.8 | ‑23.4 | ‑32.8 | |
| Per cent of GDP | -2.0 | -2.2 | ‑1.3 | ‑1.9 | |
| Memorandum item: | |||||
| Headline cash balance | -44.8 | -48.2 | ‑43.9 | ‑48.9 | |
| Projections | |||||
| 2017‑18 | 2018‑19 | ||||
| Budget $b |
MYEFO $b |
Budget $b |
MYEFO $b |
||
| Receipts | 453.6 | 440.9 | 488.2 | 473.5 | |
| Per cent of GDP | 24.7 | 24.3 | 25.2 | 24.8 | |
| Payments(a) | 464.3 | 459.9 | 491.1 | 483.3 | |
| Per cent of GDP | 25.3 | 25.3 | 25.3 | 25.3 | |
| Net Future Fund earnings | 3.7 | 4.0 | 4.0 | 4.5 | |
| Underlying cash balance(b) | ‑14.4 | ‑23.0 | ‑6.9 | ‑14.2 | |
| Per cent of GDP | ‑0.8 | ‑1.3 | ‑0.4 | ‑0.7 | |
| Revenue | 466.2 | 452.6 | 501.3 | 487.1 | |
| Per cent of GDP | 25.4 | 24.9 | 25.9 | 25.5 | |
| Expenses | 471.8 | 465.9 | 499.4 | 491.4 | |
| Per cent of GDP | 25.7 | 25.7 | 25.8 | 25.7 | |
| Net operating balance | ‑5.6 | ‑13.3 | 1.9 | ‑4.3 | |
| Net capital investment | 3.6 | 4.1 | 5.1 | 5.9 | |
| Fiscal balance | ‑9.2 | ‑17.4 | ‑3.2 | ‑10.2 | |
| Per cent of GDP | ‑0.5 | ‑1.0 | ‑0.2 | ‑0.5 | |
| Memorandum item: | |||||
| Headline cash balance | ‑24.7 | ‑32.3 | ‑17.3 | ‑23.8 | |
(a) Equivalent to cash payments for operating activities, purchases of non‑financial assets and net acquisition of assets under finance leases.
(b) Excludes expected net Future Fund earnings.
Underlying cash balance estimates
| Estimates | |||||
|---|---|---|---|---|---|
| 2015‑16 | 2016‑17 | ||||
| Budget $b |
MYEFO $b |
Budget $b |
MYEFO $b |
||
| Cash receipts | |||||
| Operating cash receipts | 396.1 | 393.0 | 422.2 | 415.0 | |
| Capital cash receipts(a) | 1.9 | 1.9 | 0.3 | 0.3 | |
| Total cash receipts | 398.0 | 394.9 | 422.5 | 415.3 | |
| Cash payments | |||||
| Operating cash payments | 418.7 | 416.5 | 433.4 | 433.2 | |
| Capital cash payments(b) | 11.2 | 11.8 | 11.5 | 12.1 | |
| Total cash payments | 429.8 | 428.3 | 444.9 | 445.3 | |
| Finance leases and similar arrangements(c) | 0.0 | 0.0 | 0.0 | 0.0 | |
| GFS cash surplus(+)/deficit(-) | -31.9 | -33.4 | ‑22.5 | ‑29.9 | |
| Per cent of GDP | -1.9 | -2.0 | ‑1.3 | ‑1.7 | |
| less Net Future Fund earnings | 3.3 | 4.0 | 3.4 | 3.7 | |
| Underlying cash balance(d) | -35.1 | -37.4 | ‑25.8 | ‑33.7 | |
| Per cent of GDP | -2.1 | -2.3 | ‑1.5 | ‑2.0 | |
| Memorandum items: | |||||
| Net cash flows from investments in financial assets for policy purposes | -12.9 | -14.7 | ‑21.4 | ‑18.9 | |
| plus Net Future Fund earnings | 3.3 | 4.0 | 3.4 | 3.7 | |
| Headline cash balance | -44.8 | -48.2 | ‑43.9 | ‑48.9 | |
| Projections | |||||
| 2017‑18 | 2018‑19 | ||||
| Budget $b |
MYEFO $b |
Budget $b |
MYEFO $b |
||
| Cash receipts | |||||
| Operating cash receipts | 453.3 | 440.6 | 487.4 | 472.7 | |
| Capital cash receipts(a) | 0.3 | 0.3 | 0.8 | 0.9 | |
| Total cash receipts | 453.6 | 440.9 | 488.2 | 473.5 | |
| Cash payments | |||||
| Operating cash payments | 451.7 | 446.8 | 477.3 | 469.0 | |
| Capital cash payments(b) | 12.6 | 13.1 | 13.8 | 14.3 | |
| Total cash payments | 464.3 | 459.9 | 491.1 | 483.3 | |
| Finance leases and similar arrangements(c) | 0.0 | 0.0 | 0.0 | 0.0 | |
| GFS cash surplus(+)/deficit(-) | ‑10.7 | ‑19.0 | ‑2.9 | ‑9.8 | |
| Per cent of GDP | ‑0.6 | ‑1.0 | ‑0.1 | ‑0.5 | |
| less Net Future Fund earnings | 3.7 | 4.0 | 4.0 | 4.5 | |
| Underlying cash balance(d) | ‑14.4 | ‑23.0 | ‑6.9 | ‑14.2 | |
| Per cent of GDP | ‑0.8 | ‑1.3 | ‑0.4 | ‑0.7 | |
| Memorandum items: | |||||
| Net cash flows from investments in financial assets for policy purposes | ‑14.0 | ‑13.3 | ‑14.5 | ‑14.0 | |
| plus Net Future Fund earnings | 3.7 | 4.0 | 4.0 | 4.5 | |
| Headline cash balance | ‑24.7 | ‑32.3 | ‑17.3 | ‑23.8 | |
(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 expected net Future Fund earnings.
The 2015‑16 underlying cash deficit has deteriorated by $2.3 billion since the 2015‑16 Budget but has improved by around $500 million compared with the 2014‑15 Final Budget Outcome.
Since the 2015‑16 Budget, the effect of parameter and other variations has resulted in a $33.8 billion reduction in receipts across the four years to 2018‑19, partly offset by a $13.2 billion reduction in payments.
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| 2015‑16 Budget underlying cash balances(a) | -35,115 | ‑25,836 | ‑14,396 | ‑6,905 | ‑82,252 | ||
| Per cent of GDP | -2.1 | ‑1.5 | ‑0.8 | ‑0.4 | |||
| Changes from 2015‑16 Budget to 2015‑16 MYEFO | |||||||
| Effect of policy decisions(b)(c) | |||||||
| Receipts | -1,345 | -917 | -907 | -668 | -3,837 | ||
| Payments | 1,171 | 1,510 | -1,209 | -1,589 | -117 | ||
| Total policy decisions impact on underlying cash balance | -2,516 | -2,427 | 302 | 921 | -3,720 | ||
| Effect of parameter and other variations(c) | |||||||
| Receipts | -1,744 | -6,216 | -11,805 | -14,034 | -33,800 | ||
| Payments | -2,672 | -1,155 | -3,187 | -6,217 | -13,231 | ||
| less Net Future Fund earnings | 697 | 343 | 308 | 429 | 1,777 | ||
| Total parameter and other variations impact on underlying cash balance | 231 | -5,404 | -8,927 | -8,246 | -22,345 | ||
| 2015‑16 MYEFO underlying cash balance(a) | -37,399 | ‑33,667 | ‑23,021 | ‑14,229 | ‑108,317 | ||
| Per cent of GDP | -2.3 | ‑2.0 | ‑1.3 | ‑0.7 | |||
(a) Excludes expected net Future Fund earnings.
(b) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.
(c) A positive number for receipts indicates an increase in the underlying cash balance, while a positive number for payments indicates a decrease in the underlying cash balance.
The Government remains committed to offsetting all new policy decisions. After taking into account the provision the Government previously made relating to the China‑Australia Free Trade Agreement, the overall impact of policy decisions since the 2015‑16 Budget is an improvement of almost $400 million over the four years to 2018‑19 (Table 3.6).
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| Total impact of policy decisions since the 2015‑16 Budget | -2,516 | ‑2,427 | 302 | 921 | ‑3,720 | ||
| Add: Provision made for the China Free Trade Agreement | 655 | 1,005 | 1,160 | 1,295 | 4,115 | ||
| Equals total impact of policy decisions | -1,861 | ‑1,422 | 1,462 | 2,216 | 395 | ||
| Less: Decisions taken as part of negotiations with the Senate | -539 | -968 | 199 | -169 | -1,476 | ||
| Net budget impact of new policy decisions | -1,322 | ‑454 | 1,263 | 2,385 | 1,871 | ||
Passage of a number of savings measures has been delayed in the Senate, causing a negative impact on the bottom line. The Government has taken steps to mitigate this impact where the prospect of legislation passing seemed remote.
The Government has revised its package of changes to family payments by not proceeding with measures blocked by the Senate and introducing new family payments measures and changes to the child care system that achieve similar savings.
In addition, the Government has delayed the implementation of reforms to higher education that have failed to pass the Senate, while the Government consults further on reforms for the future.
Negotiations in the Senate have also led to several additional spending measures to help secure the passage of legislation.
The net impact of decisions taken as part of negotiations with the Senate since the 2015‑16 Budget has been a cost to the underlying cash balance of $1.5 billion over the four years to 2018‑19.
Adjusting for the provision previously made for the China Free Trade Agreement and Senate negotiations, the net impact of policy decisions taken since the 2015‑16 Budget is a $1.9 billion improvement in the underlying cash balance over the forward estimates.
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| Decisions where likelihood of passing legislation seemed remote | |||||||
| Family Payment Reform - a new families package | 26 | ‑118 | ‑330 | ‑917 | ‑1,340 | ||
| Family Day Care - improving integrity | 18 | 127 | 311 | 474 | 931 | ||
| Child Care System - changes | 15 | 29 | 191 | 205 | 441 | ||
| Higher Education Reform - delay | -282 | ‑196 | 32 | 75 | ‑371 | ||
| Impact of decisions where likelihood of passing legislation seemed remote | -222 | ‑158 | 204 | ‑162 | ‑339 | ||
| Concessions to secure passage of legislation | |||||||
| Infrastructure Investment Programme - new investments | -316 | ‑807 | 0 | 0 | ‑1,123 | ||
| National Wind Farm Commissioner and Independent Scientific Committee on Wind Turbines - establishment | .. | .. | .. | .. | ‑1 | ||
| Taxation treatment of biodiesel - extension of phase-in for new arrangements | 0 | ‑3 | ‑5 | ‑7 | ‑14 | ||
| Impact of concessions to secure passage of legislation | -316 | ‑809 | ‑5 | ‑7 | ‑1,138 | ||
| Delays in passing legislation (a) | |||||||
| Attorney-General's | -15 | ‑16 | ‑16 | ‑17 | ‑64 | ||
| Employment | -10 | 0 | 0 | 0 | ‑10 | ||
| Health | -210 | ‑36 | ‑23 | ‑24 | ‑293 | ||
| Industry and Science | -24 | 0 | 0 | 0 | ‑24 | ||
| Social Services | -956 | ‑881 | ‑1,417 | ‑697 | ‑3,952 | ||
| Veterans' Affairs | -11 | 0 | 0 | 0 | ‑11 | ||
| Impact of delays in passing legislation | -1,226 | ‑933 | ‑1,456 | ‑738 | ‑4,354 | ||
| Total impacts and adjustments due to the Senate | -1,765 | ‑1,901 | ‑1,257 | ‑907 | ‑5,830 | ||
(a) Since the 2015‑16 Budget
Further details of the impact of policy decisions and major variations arising from parameter and other variations on the fiscal outlook are provided in the receipt estimates and payment estimates sections below.
Receipts estimates
Total receipts are expected to be $3.1 billion lower in 2015‑16 than estimated at the 2015‑16 Budget. Tax receipts are $1.9 billion lower and non‑tax receipts are $1.2 billion lower.
Table 3.8 and Table 3.9 provide a summary of changes in total receipts in 2015‑16 and 2016‑17.
| Estimates | Change on Budget | |||||
|---|---|---|---|---|---|---|
| Budget $m |
MYEFO $m |
$m |
% |
|||
| Individuals and other withholding taxes | ||||||
| Gross income tax withholding | 176,800 | 175,200 | ‑1,600 | ‑0.9 | ||
| Gross other individuals | 40,800 | 41,600 | 800 | 2.0 | ||
| less: Refunds | 28,000 | 27,500 | -500 | -1.8 | ||
| Total individuals and other withholding tax | 189,600 | 189,300 | ‑300 | ‑0.2 | ||
| Fringe benefits tax | 4,880 | 4,530 | ‑350 | ‑7.2 | ||
| Company tax | 68,200 | 67,100 | ‑1,100 | ‑1.6 | ||
| Superannuation fund taxes | 9,080 | 7,730 | ‑1,350 | ‑14.9 | ||
| Minerals resource rent tax(a) | 0 | 0 | 0 | ‑ | ||
| Petroleum resource rent tax | 1,450 | 1,000 | -450 | -31.0 | ||
| Income taxation receipts | 273,210 | 269,660 | -3,550 | -1.3 | ||
| Goods and services tax | 57,316 | 57,614 | 298 | 0.5 | ||
| Wine equalisation tax | 820 | 840 | 20 | 2.4 | ||
| Luxury car tax | 450 | 520 | 70 | 15.6 | ||
| Excise and customs duty | ||||||
| Petrol | 6,100 | 6,200 | 100 | 1.6 | ||
| Diesel | 9,110 | 9,320 | 210 | 2.3 | ||
| Other fuel products | 2,840 | 2,420 | ‑420 | ‑14.8 | ||
| Tobacco | 9,370 | 9,150 | ‑220 | ‑2.3 | ||
| Beer | 2,390 | 2,330 | ‑60 | ‑2.5 | ||
| Spirits | 2,030 | 1,970 | ‑60 | ‑3.0 | ||
| Other alcoholic beverages(b) | 960 | 910 | ‑50 | ‑5.2 | ||
| Other customs duty | ||||||
| Textiles, clothing and footwear | 380 | 440 | 60 | 15.8 | ||
| Passenger motor vehicles | 420 | 550 | 130 | 31.0 | ||
| Other imports | 1,120 | 1,370 | 250 | 22.3 | ||
| less: Refunds and drawbacks | 420 | 420 | 0 | 0.0 | ||
| Total excise and customs duty | 34,300 | 34,240 | ‑60 | ‑0.2 | ||
| Carbon pricing mechanism | 0 | 0 | 0 | ‑ | ||
| Agricultural levies | 472 | 475 | 3 | 0.6 | ||
| Other taxes(c) | 3,573 | 4,881 | 1,308 | 36.6 | ||
| Indirect taxation receipts | 96,930 | 98,570 | 1,639 | 1.7 | ||
| Taxation receipts | 370,140 | 368,230 | -1,911 | -0.5 | ||
| Sales of goods and services(c) | 9,475 | 7,870 | ‑1,605 | ‑16.9 | ||
| Interest received | 3,334 | 3,874 | 539 | 16.2 | ||
| Dividends | 4,623 | 4,516 | ‑107 | ‑2.3 | ||
| Other non-taxation receipts | 10,407 | 10,401 | -6 | -0.1 | ||
| Non-taxation receipts | 27,840 | 26,661 | -1,179 | -4.2 | ||
| Total receipts | 397,980 | 394,891 | ‑3,089 | ‑0.8 | ||
| Memorandum: | ||||||
| Total excise(d) | 24,820 | 21,330 | -3,490 | -14.1 | ||
| Total customs duty(d) | 9,480 | 12,910 | 3,430 | 36.2 | ||
| Capital gains tax(e) | 11,500 | 10,600 | -900 | -7.8 | ||
| Medicare and DisabilityCare Australia levy | 14,870 | 15,014 | 144 | 1.0 | ||
(a) The MRRT applied until 30 September 2014.
(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
(c) Visa application charges have been reclassified from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.
(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.
(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.
| Estimates | Change on Budget | |||||
|---|---|---|---|---|---|---|
| Budget $m |
MYEFO $m |
$m |
% |
|||
| Individuals and other withholding taxes | ||||||
| Gross income tax withholding | 187,600 | 184,500 | ‑3,100 | ‑1.7 | ||
| Gross other individuals | 43,900 | 44,900 | 1,000 | 2.3 | ||
| less: Refunds | 28,400 | 28,900 | 500 | 1.8 | ||
| Total individuals and other withholding tax | 203,100 | 200,500 | ‑2,600 | ‑1.3 | ||
| Fringe benefits tax | 5,090 | 4,700 | ‑390 | ‑7.7 | ||
| Company tax | 73,800 | 70,700 | ‑3,100 | ‑4.2 | ||
| Superannuation fund taxes | 10,530 | 9,080 | ‑1,450 | ‑13.8 | ||
| Minerals resource rent tax(a) | 0 | 0 | 0 | ‑ | ||
| Petroleum resource rent tax | 1,450 | 1,050 | -400 | -27.6 | ||
| Income taxation receipts | 293,970 | 286,030 | -7,940 | -2.7 | ||
| Goods and services tax | 61,231 | 60,991 | ‑239 | ‑0.4 | ||
| Wine equalisation tax | 850 | 860 | 10 | 1.2 | ||
| Luxury car tax | 400 | 510 | 110 | 27.5 | ||
| Excise and customs duty | ||||||
| Petrol | 6,250 | 6,400 | 150 | 2.4 | ||
| Diesel | 9,520 | 9,630 | 110 | 1.2 | ||
| Other fuel products | 2,840 | 2,430 | ‑410 | ‑14.4 | ||
| Tobacco | 10,180 | 9,700 | ‑480 | ‑4.7 | ||
| Beer | 2,500 | 2,330 | ‑170 | ‑6.8 | ||
| Spirits | 2,140 | 2,010 | ‑130 | ‑6.1 | ||
| Other alcoholic beverages(b) | 1,000 | 920 | ‑80 | ‑8.0 | ||
| Other customs duty | ||||||
| Textiles, clothing and footwear | 290 | 300 | 10 | 3.4 | ||
| Passenger motor vehicles | 400 | 590 | 190 | 47.5 | ||
| Other imports | 1,010 | 1,140 | 130 | 12.9 | ||
| less: Refunds and drawbacks | 420 | 420 | 0 | 0.0 | ||
| Total excise and customs duty | 35,710 | 35,030 | ‑680 | ‑1.9 | ||
| Carbon pricing mechanism | 0 | 0 | 0 | ‑ | ||
| Agricultural levies | 480 | 485 | 5 | 1.0 | ||
| Other taxes(c) | 3,781 | 5,219 | 1,438 | 38.0 | ||
| Indirect taxation receipts | 102,452 | 103,095 | 644 | 0.6 | ||
| Taxation receipts | 396,422 | 389,125 | -7,296 | -1.8 | ||
| Sales of goods and services(c) | 11,735 | 9,580 | ‑2,154 | ‑18.4 | ||
| Interest received | 3,537 | 4,007 | 470 | 13.3 | ||
| Dividends | 3,305 | 4,542 | 1,237 | 37.4 | ||
| Other non-taxation receipts | 7,463 | 8,074 | 611 | 8.2 | ||
| Non-taxation receipts | 26,040 | 26,202 | 163 | 0.6 | ||
| Total receipts | 422,461 | 415,327 | ‑7,134 | ‑1.7 | ||
| Memorandum: | ||||||
| Total excise(d) | 25,880 | 21,530 | -4,350 | -16.8 | ||
| Total customs duty(d) | 9,830 | 13,500 | 3,670 | 37.3 | ||
| Capital gains tax(e) | 13,900 | 12,300 | -1,600 | -11.5 | ||
| Medicare and DisabilityCare Australia levy | 15,570 | 15,592 | 22 | 0.1 | ||
(a) The MRRT applied until 30 September 2014.
(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
(c) Visa application charges have been reclassified from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.
(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.
(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.
Table 3.10 shows the Australian Government general government cash receipts from 2014‑15 to 2018‑19 by heads of revenue.
| Actual | Estimates | Projections | |||||
|---|---|---|---|---|---|---|---|
| 2014‑15 $m |
2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
|||
| Individuals and other withholding taxes | |||||||
| Gross income tax withholding | 166,352 | 175,200 | 184,500 | 195,300 | 207,700 | ||
| Gross other individuals | 38,541 | 41,600 | 44,900 | 49,500 | 54,600 | ||
| less: Refunds | 27,033 | 27,500 | 28,900 | 30,700 | 32,650 | ||
| Total individuals and other withholding tax | 177,860 | 189,300 | 200,500 | 214,100 | 229,650 | ||
| Fringe benefits tax | 4,347 | 4,530 | 4,700 | 4,590 | 4,790 | ||
| Company tax | 66,174 | 67,100 | 70,700 | 76,600 | 82,700 | ||
| Superannuation fund taxes | 5,873 | 7,730 | 9,080 | 9,810 | 10,510 | ||
| Minerals resource rent tax(a) | 60 | 0 | 0 | 0 | 0 | ||
| Petroleum resource rent tax | 1,810 | 1,000 | 1,050 | 1,000 | 1,000 | ||
| Income taxation receipts | 256,125 | 269,660 | 286,030 | 306,100 | 328,650 | ||
| Goods and services tax | 54,542 | 57,614 | 60,991 | 63,970 | 66,961 | ||
| Wine equalisation tax | 792 | 840 | 860 | 890 | 920 | ||
| Luxury car tax | 520 | 520 | 510 | 520 | 530 | ||
| Excise and customs duty | |||||||
| Petrol | 6,035 | 6,200 | 6,400 | 6,700 | 7,050 | ||
| Diesel | 8,908 | 9,320 | 9,630 | 9,980 | 10,480 | ||
| Other fuel products | 2,885 | 2,420 | 2,430 | 2,530 | 2,640 | ||
| Tobacco | 8,848 | 9,150 | 9,700 | 9,990 | 10,280 | ||
| Beer | 2,310 | 2,330 | 2,330 | 2,410 | 2,500 | ||
| Spirits | 1,996 | 1,970 | 2,010 | 2,070 | 2,140 | ||
| Other alcoholic beverages(b) | 899 | 910 | 920 | 950 | 980 | ||
| Other customs duty | |||||||
| Textiles, clothing and footwear | 645 | 440 | 300 | 250 | 270 | ||
| Passenger motor vehicles | 732 | 550 | 590 | 540 | 600 | ||
| Other imports | 1,664 | 1,370 | 1,140 | 890 | 990 | ||
| less: Refunds and drawbacks | 356 | 420 | 420 | 420 | 420 | ||
| Total excise and customs duty | 34,568 | 34,240 | 35,030 | 35,890 | 37,510 | ||
| Carbon pricing mechanism | 1,627 | 0 | 0 | 0 | 0 | ||
| Agricultural levies | 515 | 475 | 485 | 493 | 498 | ||
| Other taxes(c) | 4,805 | 4,881 | 5,219 | 5,309 | 5,341 | ||
| Indirect taxation receipts | 97,369 | 98,570 | 103,095 | 107,072 | 111,760 | ||
| Taxation receipts | 353,494 | 368,230 | 389,125 | 413,172 | 440,410 | ||
| Sales of goods and services(c) | 7,103 | 7,870 | 9,580 | 12,471 | 16,248 | ||
| Interest received | 3,056 | 3,874 | 4,007 | 4,050 | 4,642 | ||
| Dividends | 4,745 | 4,516 | 4,542 | 3,232 | 3,859 | ||
| Other non-taxation receipts | 9,904 | 10,401 | 8,074 | 7,958 | 8,372 | ||
| Non-taxation receipts | 24,807 | 26,661 | 26,202 | 27,711 | 33,121 | ||
| Total receipts | 378,301 | 394,891 | 415,327 | 440,883 | 473,531 | ||
| Memorandum: | |||||||
| Total excise | 23,663 | 21,330 | 21,530 | 22,380 | 23,450 | ||
| Total customs duty | 10,905 | 12,910 | 13,500 | 13,510 | 14,060 | ||
| Capital gains tax(d) | 8,400 | 10,600 | 12,300 | 14,300 | 16,100 | ||
| Medicare and DisabilityCare Australia levy | 14,640 | 15,014 | 15,592 | 16,260 | 17,038 | ||
(a) The MRRT applied until 30 September 2014.
(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
(c) Visa application charges have been reclassified from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The reclassification is reflected from 2015‑16 MYEFO, 2014‑15 Outcome and back casting occurs in Appendix D Historical Series from 2003‑04.
(d) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes. The 2014‑15 figure is an estimate.
Policy decisions
Policy decisions since the 2015‑16 Budget have reduced total receipts by $1.3 billion in 2015‑16 and reduced total receipts by $3.8 billion over the forward estimates period.
The reduction as a result of policy decisions primarily reflects reduced tariff receipts associated with the China‑Australia Free Trade Agreement. In the absence of this, total receipts would have increased by less than $300 million over the four years to 2018‑19 as a result of policy decisions.
Parameter and other variations
Parameter and other variations have reduced total receipts since the 2015‑16 Budget by $1.7 billion in 2015‑16 and $33.8 billion over the forward estimates period.
The 2015‑16 Budget made provisions for a number of measures that were still subject to finalisation at the time. Consistent with usual practice, the provision for the China‑Australia Free Trade Agreement, which was included in the 2014‑15 MYEFO and 2015‑16 Budget, has now been removed as this measure is included in the 2015‑16 MYEFO.
The 2015‑16 MYEFO includes new provisions for the Trans‑Pacific Partnership Agreement and the Environmental Goods Agreement. As is standard practice, measures will be published once the agreements have been formally signed.
The key economic parameters that influence tax receipts and tax revenue are shown in Table 3.11. The table shows effects on the Australian Government's main tax bases of the changed circumstances and outlook since the 2015‑16 Budget.
| Outcome | Estimates | Projections | |||||
|---|---|---|---|---|---|---|---|
| 2014‑15 % |
2015‑16 % |
2016‑17 % |
2017‑18 % |
2018‑19 % |
|||
| Revenue parameters at 2015‑16 MYEFO | |||||||
| Nominal gross domestic product | 1.6 | 2 3/4 | 4 1/2 | 5 | 5 1/4 | ||
| Change since 2015‑16 Budget | 0 | - 1/2 | -1 | - 1/4 | - 1/4 | ||
| Compensation of employees(b) | 2.4 | 4 | 3 3/4 | 4 1/4 | 4 1/2 | ||
| Change since 2015‑16 Budget | - 1/2 | 1/4 | - 3/4 | - 1/2 | - 3/4 | ||
| Corporate gross operating surplus(c) | ‑2.7 | 0 | 5 | 6 3/4 | 6 1/4 | ||
| Change since 2015‑16 Budget | 0 | ‑ 1/4 | -2 1/2 | 1/4 | 1/2 | ||
| Unincorporated business income | 8.5 | 4 1/2 | 5 1/2 | 6 1/2 | 6 3/4 | ||
| Change since 2015‑16 Budget | 8 1/4 | 2 1/4 | 1 1/2 | 1 1/2 | 1 | ||
| Property income(d) | 5.4 | 0 | 6 1/4 | 4 1/2 | 4 3/4 | ||
| Change since 2015‑16 Budget | 1 1/4 | -6 | - 3/4 | - 3/4 | - 3/4 | ||
| Consumption subject to GST | 3.3 | 4 1/4 | 5 1/2 | 4 3/4 | 5 | ||
| Change since 2015‑16 Budget | 0 | -1 | 0 | - 3/4 | - 1/2 | ||
(a) Current prices, per cent change on previous years. Changes since the 2015‑16 Budget are percentage points and may not reconcile due to rounding.
(b) Compensation of employees measures total remuneration earned by employees.
(c) Corporate gross operating surplus is an Australian National Accounts measure of company profits, gross of depreciation.
(d) Property income measures income derived from interest, rent and dividends.
Tax receipts have been revised down, consistent with downgrades to expected nominal GDP growth and softer equity markets since Budget. Further falls in commodity prices have led to downward revisions to company tax, while a weaker outlook for wages growth, stemming partly from lower projected population growth, has resulted in lower expected income tax from individuals. Weaker equity markets have resulted in downward revisions to capital gains, reducing expected tax receipts from superannuation, companies and individuals.
Excluding policy decisions, individuals and other withholding tax has been written down by $300 million (0.2 per cent) in 2015‑16 and $11.8 billion across the forward estimates, reflecting ongoing weakness in collections, a weaker outlook for wages growth and lower population growth.
Company tax receipts have been written down by $1.1 billion (1.6 per cent) in 2015‑16 and $12.1 billion over the forward estimates, mainly owing to weaker expected mining profitability associated with lower commodity prices. Superannuation fund taxes have been written down $1.4 billion (14.9 per cent) in 2015‑16 and $5.5 billion across the forward estimates, largely owing to weaker forecast capital gains tax and higher than expected losses relating to foreign exchange movements. Petroleum resource rent tax has also been written down by $1.7 billion over the forward estimates, consistent with a lower oil price assumption.
Excise and excise equivalent customs duty has been written down by $4.1 billion over the forward estimates, mainly reflecting lower tobacco and alcohol excise collections and weaker forecast consumption of these goods.
Analysis of the sensitivity of the receipts estimates to changes in the economic outlook is provided in Attachment A to this part.
Payment estimates
Since the 2015‑16 Budget, total cash payments for 2015‑16 have decreased by $1.5 billion. The overall net impact of payment related decisions (including the impact of Senate negotiations) have decreased total cash payments by $117 million over the four years to 2018‑19, with parameter and other variations decreasing payments by a further $13.2 billion.
Policy decisions
The impact of major policy decisions since the 2015‑16 Budget which increase payments include:
- additional funding of $300 million in 2015‑16 ($1.1 billion over two years to 2016‑17) for the Roads to Recovery programme, which supports local governments across Australia to deliver vital services;
- increasing Australia's existing humanitarian program to permanently resettle an additional 12,000 refugees who are fleeing the conflict in Syria and Iraq, which is expected to increase cash payments by $158 million in 2015‑16 ($909 million over four years to 2018‑19);
- funding a number of new and amended listings on the Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme, which is expected to increase cash payments by $112 million in 2015‑16 ($621 million over four years to 2018‑19);
- continuing to manage Illegal Maritime Arrivals, who are in Australia, while their immigration status is resolved, which is expected to increase cash payments by $403 million in 2016‑17 ($500 million over two years to 2017‑18); and
- as part of the Government's National Innovation and Science Agenda, establishing an ongoing research infrastructure funding program to provide long‑term, sustainable funding for the National Collaborative Research Infrastructure Strategy, the Square Kilometre Array (SKA) Project and the Australian Synchrotron, which is expected to increase cash payments by $15 million in 2016‑17 ($459 million over three years to 2018‑19).
The impact of these policy decisions is broadly offset over the four years to 2018‑19 by a number of decisions that have reduced cash payments, including:
- recovering money from a greater number of people where discrepancies have been identified between employment income declared to Centrelink and Pay As You Go (PAYG) information provided by employers to the Australian Taxation Office. This measure is expected to reduce cash payments by $152 million in 2016‑17 ($704 million over three years to 2018‑19);
- removing bulk‑billing incentives for pathology services, aligning bulk‑billing incentives for diagnostic imaging services with those that apply to GP services and reducing the bulk‑billing incentive for magnetic resonance imaging (MRI) services. This measure is expected to reduce cash payments by $197 million in 2016‑17 ($639 million over four years to 2018‑19);
- streamlining funding across a range of health workforce programs, which is expected to reduce cash payments by $178 million in 2015‑16 ($595 million over four years to 2018‑19);
- refining the Aged Care Funding Instrument to better align the funding claimed by providers to the level of care provided, through changes to the scoring matrix. This measure is expected to reduce cash payments by $104 million in 2016‑17 ($472 million over three years to 2018‑19); and
- changes to the child care system, including reducing the Child Care Subsidy for families who earn more than $250,000 per year, capping the number of places in the Interim Home Based Carer Subsidy programme and removing the Access to Affordability Support element under the Community Child Care Fund. This measure is expected to reduce cash payments by $15 million in 2015‑16 ($441 million over the four years to 2018‑19).
Parameter and other variations
Parameter and other variations since the 2015‑16 Budget have decreased payments by $2.7 billion in 2015‑16 and $13.2 billion over the four years to 2018‑19.
Major increases in cash payments in 2015‑16 and over the four years to 2018‑19 as a result of parameter and other variations since the 2015‑16 Budget include:
- payments relating to public debt interest expenses, which are expected to increase by $168 million in 2015‑16 and by $2.7 billion over the four years to 2018‑19, reflecting increases in the financing requirement and an increase in the weighted average cost of borrowing. This is partially offset by an increase in interest receipts ($707 million over the four years to 2018‑19);
- payments related to the Research and Development Tax Incentive, which are expected to increase by $206 million in 2015‑16 ($1.8 billion over the four years to 2018‑19), largely reflecting a higher than expected number and size of claims for the Research and Development refundable tax offset;
- payments related to the Residential and Flexible Care programme, which are expected to increase by $162 million in 2015‑16 ($943 million over the four years to 2018‑19), largely reflecting a higher than expected growth in care subsidies provided to residential aged care facilities;
- National Partnership Payments for housing services, which are expected to increase by $103 million in 2015‑16, largely reflecting early commencement and completion of new houses and refurbishments in Queensland and Western Australia; and
- payments related to Illegal Maritime Arrivals (IMAs) management, which are expected to increase by $44 million in 2015‑16 ($588 million over the four years to 2018‑19), largely reflecting slower than forecast processing of onshore and offshore IMAs and updated estimates of the distribution of IMAs across the onshore detention network.
Major reductions in cash payments in 2015‑16 and over the four years to 2018‑19 as a result of parameter and other variations since the 2015‑16 Budget include:
- payments related to the Financial Assistance Grants programme, which are expected to decrease by $1.1 billion in 2015‑16, as a result of payments being made earlier in 2014‑15 to help fund the additional expenditure associated with the Government's commitment of a further $1.1 billion over the next two years for the Roads to Recovery programme;
- payments related to the Pharmaceuticals Benefit Scheme, which are expected to decrease by $549 million in 2015‑16 ($1.6 billion over four years to 2018‑19), largely reflecting higher than expected savings from existing pricing policies;
- payments related to the Child Care Benefit, Child Care Rebate and Child Care Subsidy, which are expected to decrease by $235 million in 2015‑16 ($591 million over four years to 2018‑19), largely reflecting a higher than expected proportion of child care fee assistance payments being made in arrears;
- payments related to Income Support for People with Disability, which are expected to decrease by $201 million in 2015‑16 ($756 million over four years to 2018‑19), largely reflecting slower than expected growth in the number of recipients and changes in the medium‑term population projections (refer to Box A for further information); and
- payments related to the Income Support for Carers programme, which are expected to decrease by $192 million in 2015‑16 ($1.2 billion over the four years to 2018‑19), largely due to slower than expected growth in the number of Carer Payment recipients and changes in the medium‑term population projections (refer to Box A for further information).
Consistent with previous budgets, the underlying cash balance has been improved by the regular draw down of the conservative bias allowance. Details of this draw down are provided at Attachment C.
Analysis of the sensitivity of the payments estimates to changes in the economic outlook is provided in Attachment A to this part.
Fiscal balance estimates
Compared with the 2015‑16 Budget, the fiscal balance is expected to be $2.8 billion lower for 2015‑16.
Table 3.12 provides a reconciliation of fiscal balance estimates, including the impact of policy decisions and parameter and other variations on revenue, expense and net capital investment.
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| 2015‑16 Budget fiscal balance | ‑32,972 | ‑23,425 | ‑9,236 | ‑3,230 | ‑68,863 | ||
| Per cent of GDP | ‑2.0 | ‑1.3 | ‑0.5 | ‑0.2 | |||
| Changes from 2015‑16 Budget to 2015‑16 MYEFO | |||||||
| Effect of policy decisions(a)(b) | |||||||
| Revenue | ‑991 | ‑492 | ‑860 | ‑696 | ‑3,038 | ||
| Expenses | 829 | 1,015 | ‑2,356 | ‑2,114 | ‑2,627 | ||
| Net capital investment | 128 | 46 | ‑56 | ‑75 | 43 | ||
| Total policy decisions impact on fiscal balance | ‑1,948 | ‑1,552 | 1,552 | 1,494 | ‑454 | ||
| Effect of parameter and other variations(b) | |||||||
| Revenue | ‑3,407 | ‑9,735 | ‑12,737 | ‑13,499 | ‑39,377 | ||
| Expenses | ‑3,064 | ‑2,462 | ‑3,567 | ‑5,944 | ‑15,037 | ||
| Net capital investment | 502 | 501 | 560 | 918 | 2,482 | ||
| Total parameter and other variations impact on fiscal balance | ‑845 | ‑7,773 | ‑9,731 | ‑8,473 | ‑26,822 | ||
| 2015‑16 MYEFO fiscal balance | ‑35,765 | ‑32,751 | ‑17,415 | ‑10,209 | ‑96,139 | ||
| Per cent of GDP | ‑2.2 | ‑1.9 | ‑1.0 | ‑0.5 | |||
(a) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.
(b) A positive number for revenue indicates an increase in the fiscal balance, while a positive number for expenses and net capital investment indicates a decrease in the fiscal balance.
Revenue estimates
Total revenue has been revised down by $4.4 billion in 2015‑16 since the 2015‑16 Budget.
While changes in tax revenue are generally driven by the same factors as tax receipts, there are differences as not all revenue raised in a given year is actually paid in that year. These differences exist for most revenue heads, and vary across years.
Detailed Australian Government general government sector revenue estimates for 2015‑16 and 2016‑17, compared with estimates from the 2015‑16 Budget, are provided in Tables 3.13 and 3.14 respectively.
| Estimates | Change on Budget | ||||
|---|---|---|---|---|---|
| Budget $m |
MYEFO $m |
$m |
% |
||
| Individuals and other withholding taxes | |||||
| Gross income tax withholding | 178,460 | 176,550 | ‑1,910 | ‑1.1 | |
| Gross other individuals | 43,800 | 44,310 | 510 | 1.2 | |
| less: Refunds | 28,000 | 27,500 | ‑500 | ‑1.8 | |
| Total individuals and other withholding tax | 194,260 | 193,360 | ‑900 | ‑0.5 | |
| Fringe benefits tax | 5,020 | 4,610 | ‑410 | ‑8.2 | |
| Company tax | 69,800 | 67,996 | ‑1,804 | ‑2.6 | |
| Superannuation fund taxes | 9,180 | 7,780 | ‑1,400 | ‑15.3 | |
| Minerals resource rent tax(a) | 0 | 0 | 0 | 0.0 | |
| Petroleum resource rent tax | 1,420 | 960 | ‑460 | ‑32.4 | |
| Income taxation revenue | 279,680 | 274,706 | ‑4,974 | ‑1.8 | |
| Goods and services tax | 60,330 | 59,790 | ‑540 | ‑0.9 | |
| Wine equalisation tax | 840 | 850 | 10 | 1.2 | |
| Luxury car tax | 450 | 520 | 70 | 15.6 | |
| Excise and customs duty | |||||
| Petrol | 6,130 | 6,220 | 90 | 1.5 | |
| Diesel | 9,140 | 9,350 | 210 | 2.3 | |
| Other fuel products | 2,850 | 2,423 | ‑427 | ‑15.0 | |
| Tobacco | 9,390 | 9,150 | ‑240 | ‑2.6 | |
| Beer | 2,400 | 2,340 | ‑60 | ‑2.5 | |
| Spirits | 2,030 | 1,970 | ‑60 | ‑3.0 | |
| Other alcoholic beverages(b) | 960 | 910 | ‑50 | ‑5.2 | |
| Other customs duty | |||||
| Textiles, clothing and footwear | 380 | 440 | 60 | 15.8 | |
| Passenger motor vehicles | 420 | 550 | 130 | 31.0 | |
| Other imports | 1,120 | 1,370 | 250 | 22.3 | |
| less: Refunds and drawbacks | 420 | 420 | 0 | 0.0 | |
| Total excise and customs duty | 34,400 | 34,303 | ‑97 | ‑0.3 | |
| Carbon pricing mechanism | 0 | 0 | 0 | 0.0 | |
| Agricultural levies | 472 | 475 | 3 | 0.6 | |
| Other taxes(c) | 3,902 | 5,279 | 1,377 | 35.3 | |
| Indirect taxation revenue | 100,394 | 101,217 | 823 | 0.8 | |
| Taxation revenue | 380,074 | 375,923 | ‑4,151 | ‑1.1 | |
| Sales of goods and services(c) | 9,542 | 7,956 | ‑1,586 | ‑16.6 | |
| Interest | 4,083 | 4,519 | 436 | 10.7 | |
| Dividends | 3,143 | 3,841 | 698 | 22.2 | |
| Other non-taxation revenue | 8,508 | 8,714 | 206 | 2.4 | |
| Non-taxation revenue | 25,276 | 25,030 | ‑246 | ‑1.0 | |
| Total revenue | 405,350 | 400,953 | ‑4,397 | ‑1.1 | |
| Memorandum: | |||||
| Total excise(d) | 24,920 | 21,393 | -3,527 | -14.2 | |
| Total customs duty(d) | 9,480 | 12,910 | 3,430 | 36.2 | |
| Capital gains tax(e) | 11,500 | 10,600 | -900 | -7.8 | |
| Medicare and DisabilityCare Australia levy | 14,870 | 15,014 | 144 | 1.0 | |
(a) The MRRT applied until 30 September 2014.
(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
(c) Visa application charges have been reclassified from non‑taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.
(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.
(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.
| Estimates | Change on Budget | ||||
|---|---|---|---|---|---|
| Budget $m |
MYEFO $m |
$m |
% |
||
| Individuals and other withholding taxes | |||||
| Gross income tax withholding | 189,130 | 185,950 | ‑3,180 | ‑1.7 | |
| Gross other individuals | 47,230 | 47,740 | 510 | 1.1 | |
| less: Refunds | 28,400 | 28,900 | 500 | 1.8 | |
| Total individuals and other withholding tax | 207,960 | 204,790 | ‑3,170 | ‑1.5 | |
| Fringe benefits tax | 5,230 | 4,780 | ‑450 | ‑8.6 | |
| Company tax | 75,500 | 71,600 | ‑3,900 | ‑5.2 | |
| Superannuation fund taxes | 10,670 | 9,150 | ‑1,520 | ‑14.2 | |
| Minerals resource rent tax(a) | 0 | 0 | 0 | 0.0 | |
| Petroleum resource rent tax | 1,450 | 1,070 | ‑380 | ‑26.2 | |
| Income taxation revenue | 300,810 | 291,390 | ‑9,420 | ‑3.1 | |
| Goods and services tax | 64,130 | 63,700 | ‑430 | ‑0.7 | |
| Wine equalisation tax | 870 | 860 | ‑10 | ‑1.1 | |
| Luxury car tax | 410 | 510 | 100 | 24.4 | |
| Excise and customs duty | |||||
| Petrol | 6,250 | 6,400 | 150 | 2.4 | |
| Diesel | 9,530 | 9,640 | 110 | 1.2 | |
| Other fuel products | 2,890 | 2,440 | ‑450 | ‑15.6 | |
| Tobacco | 10,180 | 9,700 | ‑480 | ‑4.7 | |
| Beer | 2,500 | 2,330 | ‑170 | ‑6.8 | |
| Spirits | 2,140 | 2,010 | ‑130 | ‑6.1 | |
| Other alcoholic beverages(b) | 1,000 | 920 | ‑80 | ‑8.0 | |
| Other customs duty | |||||
| Textiles, clothing and footwear | 290 | 300 | 10 | 3.4 | |
| Passenger motor vehicles | 400 | 590 | 190 | 47.5 | |
| Other imports | 1,010 | 1,140 | 130 | 12.9 | |
| less: Refunds and drawbacks | 420 | 420 | 0 | 0.0 | |
| Total excise and customs duty | 35,770 | 35,050 | ‑720 | ‑2.0 | |
| Carbon pricing mechanism | 0 | 0 | 0 | 0 | |
| Agricultural levies | 480 | 485 | 5 | 1.0 | |
| Other taxes(c) | 4,148 | 5,547 | 1,399 | 33.7 | |
| Indirect taxation revenue | 105,807 | 106,151 | 344 | 0.3 | |
| Taxation revenue | 406,617 | 397,541 | ‑9,076 | ‑2.2 | |
| Sales of goods and services(c) | 11,791 | 9,641 | ‑2,151 | ‑18.2 | |
| Interest | 4,680 | 4,938 | 258 | 5.5 | |
| Dividends | 3,561 | 3,050 | ‑511 | ‑14.4 | |
| Other non-taxation revenue | 6,777 | 8,030 | 1,253 | 18.5 | |
| Non-taxation revenue | 26,810 | 25,659 | ‑1,151 | ‑4.3 | |
| Total revenue | 433,427 | 423,200 | ‑10,226 | ‑2.4 | |
| Memorandum: | |||||
| Total excise(d) | 25,940 | 21,550 | -4,390 | -16.9 | |
| Total customs duty(d) | 9,830 | 13,500 | 3,670 | 37.3 | |
| Capital gains tax(e) | 13,900 | 12,300 | -1,600 | -11.5 | |
| Medicare and DisabilityCare Australia levy | 15,570 | 15,592 | 22 | 0.1 | |
(a) The MRRT applied until 30 September 2014.
(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
(c) Visa application charges have been reclassified from non‑taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.
(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.
(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.
Table 3.15 shows the Australian Government general government (accrual) revenue from 2014‑15 to 2018‑19 by heads of revenue.
| Actual | Estimates | Projections | |||||
|---|---|---|---|---|---|---|---|
| 2014‑15 $m |
2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
|||
| Individuals and other withholding taxes | |||||||
| Gross income tax withholding | 167,645 | 176,550 | 185,950 | 196,870 | 209,390 | ||
| Gross other individuals | 40,565 | 44,310 | 47,740 | 52,580 | 58,010 | ||
| less: Refunds | 27,033 | 27,500 | 28,900 | 30,700 | 32,650 | ||
| Total individuals and other withholding tax | 181,177 | 193,360 | 204,790 | 218,750 | 234,750 | ||
| Fringe benefits tax | 4,393 | 4,610 | 4,780 | 4,670 | 4,870 | ||
| Company tax | 66,311 | 67,996 | 71,600 | 77,700 | 83,900 | ||
| Superannuation fund taxes | 5,890 | 7,780 | 9,150 | 9,880 | 10,580 | ||
| Minerals resource rent tax(a) | 63 | 0 | 0 | 0 | 0 | ||
| Petroleum resource rent tax | 1,319 | 960 | 1,070 | 960 | 990 | ||
| Income taxation revenue | 259,151 | 274,706 | 291,390 | 311,960 | 335,090 | ||
| Goods and services tax | 56,462 | 59,790 | 63,700 | 67,010 | 70,480 | ||
| Wine equalisation tax | 828 | 850 | 860 | 890 | 920 | ||
| Luxury car tax | 540 | 520 | 510 | 520 | 530 | ||
| Excise and customs duty | |||||||
| Petrol | 6,042 | 6,220 | 6,400 | 6,710 | 7,060 | ||
| Diesel | 8,918 | 9,350 | 9,640 | 9,990 | 10,490 | ||
| Other fuel products | 2,887 | 2,423 | 2,440 | 2,560 | 2,670 | ||
| Tobacco | 8,826 | 9,150 | 9,700 | 9,990 | 10,280 | ||
| Beer | 2,312 | 2,340 | 2,330 | 2,410 | 2,500 | ||
| Spirits | 1,997 | 1,970 | 2,010 | 2,070 | 2,140 | ||
| Other alcoholic beverages(b) | 900 | 910 | 920 | 950 | 980 | ||
| Other customs duty | |||||||
| Textiles, clothing and footwear | 645 | 440 | 300 | 260 | 270 | ||
| Passenger motor vehicles | 732 | 550 | 590 | 560 | 600 | ||
| Other imports | 1,665 | 1,370 | 1,140 | 930 | 990 | ||
| less: Refunds and drawbacks | 356 | 420 | 420 | 420 | 420 | ||
| Total excise and customs duty | 34,570 | 34,303 | 35,050 | 36,010 | 37,560 | ||
| Carbon pricing mechanism | 0 | 0 | 0 | 0 | 0 | ||
| Agricultural levies | 509 | 475 | 485 | 493 | 498 | ||
| Other taxes(c) | 5,114 | 5,279 | 5,547 | 5,638 | 5,725 | ||
| Indirect taxation revenue | 98,024 | 101,217 | 106,151 | 110,562 | 115,712 | ||
| Taxation revenue | 357,175 | 375,923 | 397,541 | 422,522 | 450,802 | ||
| Sales of goods and services(c) | 7,239 | 7,956 | 9,641 | 12,527 | 16,307 | ||
| Interest | 3,147 | 4,519 | 4,938 | 5,361 | 6,566 | ||
| Dividends | 6,178 | 3,841 | 3,050 | 3,702 | 4,030 | ||
| Other non-taxation revenue | 7,006 | 8,714 | 8,030 | 8,468 | 9,388 | ||
| Non-taxation revenue | 23,571 | 25,030 | 25,659 | 30,059 | 36,291 | ||
| Total revenue | 380,746 | 400,953 | 423,200 | 452,581 | 487,094 | ||
| Memorandum: | |||||||
| Total excise | 23,687 | 21,393 | 21,550 | 22,430 | 23,500 | ||
| Total customs duty | 10,884 | 12,910 | 13,500 | 13,580 | 14,060 | ||
| Capital gains tax(d) | 8,400 | 10,600 | 12,300 | 14,300 | 16,100 | ||
| Medicare and DisabilityCare Australia levy | 14,640 | 15,014 | 15,592 | 16,260 | 17,038 | ||
(a) The MRRT applied until 30 September 2014.
(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
(c) Visa application charges have been reclassified from non‑taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The reclassification is reflected from 2015‑16 MYEFO, 2014‑15 Outcome and back casting occurs in Appendix D Historical Series from 2003‑04.
(d) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes. The 2014‑15 figure is an estimate.
Expense and net capital investment estimates
Movements in accrual expenses and net capital investments over the forward estimates are broadly similar to the movements in cash payments. The key exceptions include:
- an increase in the accrued superannuation expenses for 2015‑16 of $531 million for civilian superannuation schemes, mainly reflecting a change from budget for the actuarial discount rate. This movement has no impact on cash payments; and
- the provision of Goods and Services Tax (GST) to the States and Territories, reflecting higher than estimated GST entitlements of $342 million for the 2014‑15 financial year. This amount was accrued in 2014‑15 and will be paid in 2015‑16.
Estimates of Australian Government general government sector expenses by function can be found in Attachment D.
Table 3.16 provides a reconciliation of expense estimates.
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| 2015‑16 Budget expenses | 434,469 | 452,654 | 471,816 | 499,428 | 1,858,366 | ||
| Changes from 2015‑16 Budget to 2015‑16 MYEFO | |||||||
| Effect of policy decisions(a) | 829 | 1,015 | ‑2,356 | ‑2,114 | ‑2,627 | ||
| Effect of economic parameter variations | |||||||
| Total economic parameter variations | ‑372 | ‑1,741 | ‑2,484 | ‑3,541 | ‑8,137 | ||
| Unemployment benefits | -337 | -647 | -565 | -705 | -2,254 | ||
| Prices and wages | -348 | -985 | -1,243 | -1,479 | -4,055 | ||
| Interest and exchange rates | 112 | 121 | 135 | 174 | 542 | ||
| GST payments to the States | 200 | -230 | -810 | -1,530 | -2,370 | ||
| Public debt interest | 119 | 620 | 874 | 1,356 | 2,969 | ||
| Program specific parameter variations | 392 | ‑445 | 296 | ‑2,262 | ‑2,018 | ||
| Other variations | ‑3,204 | ‑896 | ‑2,254 | ‑1,498 | ‑7,851 | ||
| Total variations | ‑2,235 | ‑1,448 | ‑5,923 | ‑8,059 | ‑17,664 | ||
| 2015‑16 MYEFO expenses | 432,234 | 451,206 | 465,892 | 491,370 | 1,840,702 | ||
(a) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.
Table 3.17 provides a reconciliation of the net capital investment estimates.
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| 2015‑16 Budget net capital investment | 3,854 | 4,198 | 3,598 | 5,090 | 16,740 | ||
| Changes from 2015‑16 Budget to 2015‑16 MYEFO | |||||||
| Effect of policy decisions(a) | 128 | 46 | ‑56 | ‑75 | 43 | ||
| Effect of parameter and other variations | 502 | 501 | 560 | 918 | 2,482 | ||
| Total variations | 630 | 547 | 505 | 843 | 2,525 | ||
| 2015‑16 MYEFO net capital investment | 4,484 | 4,745 | 4,103 | 5,933 | 19,265 | ||
(a) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.
Headline cash balance
The headline cash balance consists of the underlying cash balance, net cash flows from investments in financial assets for policy purposes (for example, the equity funding of NBN Co) and net Future Fund earnings.
Table 3.18 provides further detail between the underlying and headline cash balance estimates of the Australian Government general government sector.
| Estimates | Projections | ||||||
|---|---|---|---|---|---|---|---|
| 2015‑16 $m |
2016‑17 $m |
2017‑18 $m |
2018‑19 $m |
Total $m |
|||
| 2015‑16 MYEFO underlying cash balance(a) | ‑37,399 | ‑33,667 | ‑23,021 | ‑14,229 | ‑108,317 | ||
| plus Net cash flows from investments in financial assets for policy purposes | |||||||
| Student loans | ‑7,926 | ‑9,382 | ‑11,100 | ‑12,115 | ‑40,524 | ||
| NBN investment | ‑7,838 | ‑8,475 | 0 | 0 | ‑16,313 | ||
| Residential mortgage backed securities | 2,195 | 1,919 | 147 | 0 | 4,261 | ||
| WestConnex | ‑28 | ‑647 | ‑732 | ‑546 | ‑1,954 | ||
| Trade support loans | ‑460 | ‑511 | ‑563 | ‑569 | ‑2,102 | ||
| Asbestos removal in the ACT - Mr Fluffy loose fill asbestos remediation | ‑250 | 0 | 50 | 50 | ‑150 | ||
| Northern Australia Infrastructure Facility | 0 | ‑935 | ‑870 | ‑805 | ‑2,610 | ||
| Drought and rural assistance loans | ‑63 | ‑250 | ‑250 | ‑250 | ‑813 | ||
| Net other | ‑356 | ‑641 | 56 | 191 | ‑751 | ||
| Total net cash flows from investments in financial assets for policy purposes | ‑14,727 | ‑18,922 | ‑13,262 | ‑14,044 | ‑60,955 | ||
| plus Net Future Fund earnings | 3,955 | 3,717 | 4,007 | 4,465 | 16,145 | ||
| 2015‑16 MYEFO headline cash balance | ‑48,171 | ‑48,872 | ‑32,276 | ‑23,808 | ‑153,127 | ||
(a) Excludes expected net Future Fund earnings.
The headline cash balance for 2015‑16 is estimated to be a deficit of $48.2 billion (2.9 per cent of GDP), compared with a deficit of $44.8 billion at 2015‑16 Budget. Over the four years to 2018‑19, the headline cash deficit is projected to decline to $23.8 billion in 2018‑19. The deterioration in the headline cash balance has been primarily driven by the deterioration of the underlying cash balance.