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APPENDIX ADJUSTED MEASURES OF GOVERNMENT REVENUE



The taxation revenue statistics presented in this release are in accordance with the Australian System of Government Finance Statistics (GFS). This system is outlined in the Australian System of Government Finance Statistics: Concepts, Sources and Methods (cat. no. 5514.0) which is consistent with the International Monetary Fund's Government Finance Statistics Manual 2001 (IMF GFSM 2001).

The GFS framework reflects taxation revenue collected by each level of government. The purpose of this appendix is to consider an alternative presentation of revenue which takes into account the level of government at which revenue is used rather than simply collected. The analysis considers the flows, by way of current grants, that occur between the levels of government in Australia, and the impact that this has on revenue at each of these levels. Also considered is the effect of direct and indirect transfers to households on total revenue. To aid in the understanding of these flows, the following analytical measures of revenue have been derived. Users should note that these measures are not themselves part of the GFS framework.


ADJUSTED TAXATION REVENUE

Adjusted taxation revenue is equal to GFS taxation revenue collected by each level of government, plus current grants received from higher levels of government, less current grants paid to lower levels of government. This measure is designed to give a clearer indication of the levels of government at which taxation revenue is actually used or spent. The source for a significant amount of the current grants distributed between levels of government is taxation revenue, such as the GST. However, some of the revenue distributed may have come from a source other than taxation. Further, it should be noted that some of the current grants transferred from Commonwealth Government to the state and local governments are Specific Purpose Payments (SPPs). Unlike the GST-related grants, these payments are 'tied' to specific policy areas as agreed between the two levels of government. Similar arrangements exist between state and local government. SPPs for current purposes are included with other current grants in deriving adjusted taxation revenue.


ADJUSTED TOTAL REVENUE

Adjusted total revenue is equal to adjusted taxation revenue plus all other non-taxation sources of revenue. Non-taxation revenue includes revenue from sales of goods and services, property income (interest, dividends, income tax equivalents, land rents and royalties), fines, capital transfers, and current transfers other than grants. Current grants are excluded from non-taxation revenue because these have already been taken into account in deriving adjusted taxation revenue.


ADJUSTED TOTAL REVENUE LESS TRANSFERS TO HOUSEHOLDS

An important role of government is the redistribution of income, by way of direct and indirect 'benefits', to individual households. These transfers can be deducted from adjusted total revenue to derive adjusted total revenue less transfers to households. Direct benefits are regular cash payments made to households by government without any requirement to provide goods and services in return (e.g. welfare payments). Indirect benefits are non-cash benefits and services provided by government to individual households (e.g. concessions for transport and utilities, medical and pharmaceutical benefits and natural disaster relief).

The three derived measures explained above are illustrated in the following diagram:

TABLE 1. ADJUSTED TAXATION REVENUE, by level of government, and as % of GDP(a)
	2005–06	2006–07	2007–08	2008–09	2009–10	2010–11
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Taxation revenue collected(b)	245 222	261 988	285 672	278 002	267 171	288 075
As % of GDP	24.7	24.2	24.3	22.2	20.7	20.6
As % of total tax revenue	82.4	81.9	82.0	82.0	80.3	80.5
2. Current grants to state government(c)	61 393	63 873	69 480	73 087	75 682	79 978
3. Current grants to local government	81	56	89	46	12	14
4. Current grants to multi–jurisdictional sector(d)	5 556	5 589	7 347	6 691	8 808	8 250
5. Adjusted taxation revenue =1–2–3–4(e)	178 192	192 470	208 756	198 178	182 669	199 832
As % of GDP	17.9	17.8	17.8	15.8	14.1	14.3
As % of total tax revenue	59.8	60.2	59.9	58.5	54.9	55.8
STATE
1. Taxation revenue collected(b)	44 248	48 874	53 134	50 631	54 536	58 121
As % of GDP	4.4	4.5	4.5	4.0	4.2	4.2
As % of total tax revenue	14.9	15.3	15.3	14.9	16.4	16.2
2. Current grants from Commonwealth government	61 393	63 873	69 480	73 087	75 682	79 978
3. Current grants to local government	1 976	2 102	2 220	3 300	2 883	3 357
4. Current grants to multi-jurisdictional sector(d)	305	287	330	462	499	569
5. Adjusted taxation revenue =1+2–3–4(e)	103 360	110 358	120 065	119 956	126 836	134 174
As % of GDP	10.4	10.2	10.2	9.6	9.8	9.6
As % of total tax revenue	34.7	34.5	34.5	35.4	38.1	37.5
LOCAL
1. Taxation revenue collected(b)	8 726	9 405	10 139	10 896	11 607	12 408
As % of GDP	0.9	0.9	0.9	0.9	0.9	0.9
As % of total tax revenue	2.9	2.9	2.9	3.2	3.5	3.5
2. Current grants from Commonwealth government	81	56	89	46	12	14
3. Current grants from state government	1 976	2 102	2 220	3 300	2 883	3 357
4. Adjusted taxation revenue = 1+2+3(e)	10 783	11 563	12 447	14 242	14 503	15 780
As % of GDP	1.1	1.1	1.1	1.1	1.1	1.1
As % of total tax revenue	3.6	3.6	3.6	4.2	4.4	4.4
TOTAL
Gross Domestic Product	994 803	1 083 060	1 175 949	1 252 218	1 293 380	1 400 126
Total taxation revenue collected	297 766	319 759	348 347	338 905	332 649	357 917
As % of GDP	29.9	29.5	29.6	27.1	25.7	25.6

TABLE 2. ADJUSTED TOTAL REVENUE, less transfers to households, and as % of GDP(a)
	2005–06	2006–07	2007–08	2008–09	2009–10	2010–11
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Adjusted taxation revenue(a)	178 192	192 470	208 756	198 178	182 669	199 832
2. Non-taxation revenue(b)	15 563	15 990	17 619	20 281	24 843	20 858
3. Adjusted total revenue =1+2	193 755	208 460	226 375	218 459	207 512	220 690
As % of GDP	19.5	19.2	19.3	17.4	16.0	15.8
4. Direct benefits to households(c)	76 997	81 138	86 078	111 548	98 490	105 559
5. Indirect benefits to households(d)	22 789	25 090	27 606	30 767	33 548	36 315
6. Adjusted total revenue, less transfers to households =3–4–5	93 969	102 233	112 690	76 144	75 473	78 815
As % of GDP	9.4	9.4	9.6	6.1	5.8	5.6
STATE
1. Adjusted taxation revenue(a)	103 360	110 358	120 065	119 956	126 836	134 174
2. Non-taxation revenue, excluding current grants from Commonwealth government(b)	36 707	40 922	38 549	50 157	64 333	62 194
3. Adjusted total revenue =1+2	140 066	151 280	158 613	170 113	191 169	196 368
As % of GDP	14.1	14.0	13.5	13.6	14.8	14.0
4. Direct benefits to households(c)	1 003	1 046	1 350	1 687	1 948	1 854
5. Indirect benefits to households(d)	2 283	2 441	2 516	2 751	3 111	3 566
6. Adjusted total revenue, less transfers to households = 3–4–5	136 780	147 793	154 748	165 676	186 110	190 948
As % of GDP	13.7	13.6	13.2	13.2	14.4	13.6
LOCAL
1. Adjusted taxation revenue(a)	10 783	11 563	12 447	14 242	14 503	15 780
2. Non-taxation revenue, excluding current grants from Commonwealth and state governments(b)	13 006	14 576	15 347	16 464	17 516	17 723
3. Adjusted total revenue =1+2	23 789	26 139	27 794	30 706	32 019	33 503
As % of GDP	2.4	2.4	2.4	2.5	2.5	2.4
4. Direct and indirect benefits to households(e)	. .	. .	. .	. .	. .	. .
5. Adjusted total revenue, less transfers to households = 3–4	23 789	26 139	27 794	30 706	32 019	33 503
As % of GDP	2.4	2.4	2.4	2.5	2.5	2.4

• Commonwealth taxation revenue was $288,075m, an increase of $20,904m (7.8%)
• Commonwealth adjusted taxation revenue was $199,832m, an increase of $17,163m (9.4%)
• Commonwealth adjusted total revenue was $220,690m, an increase of $13,178m (6.4%)
• Commonwealth adjusted total revenue less transfers to households was $78,815m, an increase of $3,342m (4.4%)
• Commonwealth adjusted total revenue less transfers to households, as a proportion of GDP, decreased to from 5.8% to 5.6% in 2010–11.

Graph 1 : Commonwealth Taxation Revenues

• State taxation revenue was $58,121m, an increase of $3,585m (6.6%)
• State adjusted taxation revenue was $134,174m, an increase of $7,338m (5.8%)
• State adjusted total revenue was $196,368m, an increase of $5,199m (2.7%)
• State adjusted total revenue less transfers to households was $190,948m, an increase of $4,838m (2.6%)
• State adjusted total revenue less transfers to households, as a proportion of GDP, decreased from 14.4% to 13.6% in 2010–11.

Graph 2: State Taxation Revenues

• Local taxation revenue was $12,408m, an increase of $801m (6.9%)
• Local adjusted taxation revenue was $15,780m, an increase of $1,277m (8.8%)
• Local total revenue less transfers to households was $33,503m, an increase of $1,484m (4.6%)
• Local adjusted total revenue less transfers to households as a proportion of GDP, decreased from 2.5% to 2.4%.

Graph 3 : Local Taxation Revenues