Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
5216.0 - Australian National Accounts: Concepts, Sources and Methods, 2000  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/11/2000   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product  
Contents >> Chapter 21: Taxes less subsidies on production and imports

Introduction

21.1 As discussed in Chapter 4, taxes on production and imports include:

      • taxes that are payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed of by their producers;
      • taxes and duties on imports payable when goods enter the economic territory or when services are delivered to residents by non-residents; and
      • other taxes on production such as taxes on ownership or use of land, buildings, or other assets used in production, or on the labour employed, or on labour costs.

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

Annual estimates

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.

21.8 Some production taxes paid by primary producers are not paid in the same year as the year in which the taxed goods are produced. This is also the case for some subsidies received by primary producers. In these cases the production taxes and subsidies are estimated on a payable basis. Receipts of fringe benefits tax (introduced in late 1986) are also adjusted to a payable basis. Annual estimates of production taxes and subsidies on a payable basis are derived by summing the four quarterly estimates. (The method of adjustment to a payable basis is discussed in the section below on quarterly estimates.)

Quarterly estimates

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.

21.10 For those production taxes and subsidies where an adjustment to a payable basis is made, the accrual figure is estimated by allocating cash receipts and payments (or estimated cash receipts and payments) to quarters according to the proportion of production or activity occurring in each quarter. For example, any wheat subsidy arising from the difference between the guaranteed minimum price and the net pool return rate is allocated to quarters on the basis of the gross value of production in the year to which the payment relates.

21.11 Fringe benefits are payable on the benefits paid to employees for financial years ended 31 March each year, although the actual quarterly payments are not directly related to the benefits paid in that quarter. As no specific information is available on the actual quarterly incidence of fringe benefits the annual liability data for years ended 31 March, which are obtained from the ATO, are allocated to quarters using linear trend interpolation (see Appendix 6). The accrual adjustment is therefore equal to the derived accrual value less the actual fringe benefits collected in the quarter.


Previous PageNext Page


Bookmark and Share. Opens in a new window


Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.