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21.1 As discussed in Chapter 4, taxes on production and imports include:
Taxes on production and imports include the GST (from 1 July 2000), wholesale sales taxes (prior to 1 July 2000), excise taxes, payroll taxes, land taxes, local government rates, motor vehicle registration charges paid by businesses, and customs duties.
21.2 Subsidies are defined in Chapter 4 as unrequited payments that government units (including, if applicable, non-resident government units) make to resident producers or importers on the basis of the levels of their production activities or the quantities or values of the goods or services which they produce, sell or import. Examples include export incentive grants, dairy industry stabilisation payments, the phosphate fertiliser bounty, and the Tasmanian freight equalisation scheme. Payments to public corporations and quasi corporations to compensate for recurring losses are also included. However, payments made to public corporations and quasi corporations to compensate for non-recurring losses are excluded from subsidies and are included as a (negative) contribution to general government sector property income in the form of dividends.
21.3 Subsidies are not payable to final consumers. Current transfers in cash that governments make directly to households as consumers are treated as social assistance benefits (e.g. old age pensions), while expenditures by government on goods and services produced by market producers that are provided directly to households, individually as consumers, without any further processing, constitute final consumption expenditure by general government and also social benefits in kind (see Chapter 22 for further information on social benefits in kind). Social benefits in kind include medicare payments, whether paid directly to doctors who bulk bill in respect of services provided to their patients or paid as cash refunds to patients. Subsidies also do not include grants that governments make to enterprises in order to finance their capital formation, or to compensate them for damage to their capital assets, such grants being treated as capital transfers.
21.4 Taxes less subsidies on production and imports may be disaggregated into two components: taxes less subsidies on products, and other taxes less subsidies on production. These two components are required to define the relationships between three important income aggregates: total factor income; gross value added at basic prices; and gross domestic product at market prices. Total factor income plus other taxes less subsidies on production equals gross value added at basic prices, while gross value added at basic prices plus taxes less subsidies on products equals gross domestic product at market prices. Local government rates are included in other taxes on production, whether paid by landlords or owner-occupiers. In the national accounts owner-occupiers are regarded as running a business in which they rent the dwelling to themselves as consumers, and generate a gross operating surplus which is derived as the difference between imputed rent and the intermediate costs associated with providing dwelling services, such as maintenance, rates, and insurance and financial services.
21.5 Taxes on products are taxes payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed of by their producers; they include taxes and duties on imports that become payable when goods enter the economic territory or when services are delivered by non-resident units. Other taxes on production consist mainly of taxes on the ownership or use of land, buildings or other assets used in production or on the labour employed, or compensation of employees paid.
21.6 Subsidies on products are usually payable when the goods or services are produced, sold or imported, although they may also be payable in other circumstances, such as when goods are transferred, leased, delivered or used for own consumption or own capital formation. Subsidies on products may be a specific amount of money per unit of a good or service or they may be calculated ad valorem as a specified percentage of the price per unit. Other subsidies on production consist of subsidies other than those on products, including subsidies on the payroll or workforce, and may relate to the total salary bill or the employment of particular types of persons, such as handicapped persons and the long-term unemployed.
Sources and methods
21.7 For Commonwealth and State general government taxes and subsidies, data are extracted from administrative sources such as Commonwealth and State budget papers and Auditors'-General Reports, Commonwealth Department of Finance and Administration ledgers and supplementary departmental documents. For local government, the information is obtained by means of a joint ABS/Commonwealth Grants Commission annual return, which is collected from each local government authority.
21.9 Information about Commonwealth and State general government production taxes and subsidies is extracted from administrative sources such as the Commonwealth Department of Finance and Administration quarterly ledger, and State government monthly and quarterly statements of receipts and expenditure. Quarterly data for local government rates are collected from a sample of local government authorities.