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APPENDIX ADJUSTED MEASURES OF GOVERNMENT REVENUE


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 GFSM2001).

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)
	2004-05	2005-06	2006-07	2007-08	2008-09	2009-10
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Taxation revenue collected(b)	229 131	245 223	261 988	285 672	278 002	267 171
As % of GDP	24.7	24.5	24.0	24.1	22.1	20.8
As % of total tax revenue	82.3	82.4	81.9	82.0	82.0	80.3
2. Current grants to state government(c)	57 560	61 393	63 873	69 480	73 087	75 788
3. Current grants to local government	305	81	56	89	46	12
4. Current grants to multi-jurisdictional sector(d)	4 839	5 556	5 589	7 347	6 691	8 808
5. Adjusted taxation revenue =1-2-3-4(e)	166 427	178 193	192 470	208 756	198 178	182 563
As % of GDP	18.0	17.8	17.6	17.6	15.8	14.2
As % of total tax revenue	59.7	59.8	60.2	59.9	58.5	54.9
STATE
1. Taxation revenue collected(b)	41 667	44 246	48 870	53 130	50 626	54 536
As % of GDP	4.5	4.4	4.5	4.5	4.0	4.2
As % of total tax revenue	15.0	14.9	15.3	15.3	14.9	16.4
2. Current grants from Commonwealth government	57 560	61 393	63 873	69 480	73 087	75 788
3. Current grants to local government	1 770	1 976	2 102	2 220	3 284	2 883
4. Current grants to multi-jurisdictional sector(d)	382	297	278	330	462	499
5. Adjusted taxation revenue =1+2-3-4(e)	97 075	103 366	110 363	120 060	119 967	126 942
As % of GDP	10.5	10.3	10.1	10.1	9.6	9.9
As % of total tax revenue	34.8	34.7	34.5	34.5	35.4	38.2
LOCAL
1. Taxation revenue collected(b)	8 183	8 726	9 405	10 129	10 866	11 566
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	2.9	3.2	3.5
2. Current grants from Commonwealth government	305	81	56	89	46	12
3. Current grants from state government	1 770	1 976	2 102	2 220	3 284	2 883
4. Adjusted taxation revenue = 1+2+3(e)	10 258	10 783	11 563	12 438	14 196	14 462
As % of GDP	1.1	1.1	1.1	1.0	1.1	1.1
As % of total tax revenue	3.7	3.6	3.6	3.6	4.2	4.3
TOTAL
Gross Domestic Product	926 447	1 001 440	1 091 633	1 185 740	1 255 241	1 284 708
Total taxation revenue collected	278 577	297 763	319 754	348 331	338 870	332 602
As % of GDP	30.1	29.7	29.3	29.4	27.0	25.9
(a) As published in Australian National Accounts, December Quarter 2010 (cat no 5206.0).
(b) According to GFSM2001.
(c) Part of the Commonwealth grants paid to states are onpassed to local government.
(d) The Multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or where classification of a unit to a jurisdiction is otherwise unclear. The main type of units currently falling into this category are the public universities.
(e) The sum of taxation revenue does not equal the sum of adjusted taxation revenue owing to grants paid to the Multi-jurisdictional sector.

TABLE 2. ADJUSTED TOTAL REVENUE, less transfers to households, and as % of GDP(a)
	2004-05	2005-06	2006-07	2007-08	2008-09	2009-10
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Adjusted taxation revenue(b)	166 427	178 193	192 470	208 756	198 178	182 563
2. Non-taxation revenue(c)	12 865	15 563	15 990	17 619	20 281	24 843
3. Adjusted total revenue =1+2	179 292	193 756	208 460	226 375	218 459	207 406
As % of GDP	19.4	19.3	19.1	19.1	17.4	16.1
4. Direct benefits to households(d)	73 989	76 997	81 138	86 078	111 548	98 490
5. Indirect benefits to households(e)	22 164	22 789	25 090	27 606	30 767	33 548
6. Adjusted total revenue, less transfers to households =3-4-5	83 139	93 970	102 233	112 690	76 144	75 367
As % of GDP	9.0	9.4	9.4	9.5	6.1	5.9
STATE
1. Adjusted taxation revenue(b)	97 075	103 366	110 363	120 060	119 967	126 942
2. Non-taxation revenue, excluding current grants from Commonwealth government(c)	32 703	36 746	41 006	38 646	50 256	64 222
3. Adjusted total revenue =1+2	129 777	140 111	151 368	158 706	170 223	191 164
As % of GDP	14.0	14.0	13.9	13.4	13.6	14.9
4. Direct benefits to households(d)	1 099	1 003	1 046	1 350	1 687	1 961
5. Indirect benefits to households(e)	2 002	2 283	2 441	2 516	2 751	3 111
6. Adjusted total revenue, less transfers to households = 3-4-5	126 676	136 825	147 882	154 841	165 786	186 092
As % of GDP	13.7	13.7	13.5	13.1	13.2	14.5
LOCAL
1. Adjusted taxation revenue(b)	10 258	10 783	11 563	12 438	14 196	14 462
2. Non-taxation revenue, excluding current grants from Commonwealth and state governments(c)	11 009	13 052	14 364	15 293	16 412	17 957
3. Adjusted total revenue =1+2	21 267	23 835	25 927	27 731	30 608	32 418
As % of GDP	2.3	2.4	2.4	2.3	2.4	2.5
4. Direct and indirect benefits to households(f)	..	..	..	..	..	..
5. Adjusted total revenue, less transfers to households = 3-4	21 267	23 835	25 927	27 731	30 608	32 418
As % of GDP	2.3	2.4	2.4	2.3	2.4	2.5
(a) As published in Australian National Accounts, December Quarter 2010 (cat no 5206.0).
(b) Derived in Table 1.
(c) Non-taxation revenue includes revenue from sales of goods and services, interest income, other property income (such as dividends, income tax equivalents, land rents and royalties), fines, capital revenue, and all current revenue other than grants.
(d) Direct benefits to households are monetary transfers.
(e) Indirect benefits to households are transfers 'in-kind' via goods and services.
(f) Local government does not make transfers of this kind to households.

• Commonwealth taxation revenue was $267,171m, a decrease of $10,831m (-3.9%)
• Commonwealth adjusted taxation revenue was $182,563m, a decrease of $15,615m
• Commonwealth adjusted total revenue was $207,406m, a decrease of $11,053m
• Commonwealth adjusted total revenue less transfers to households was $75,367m, a decrease of $777m.
• Commonwealth adjusted total revenue less transfers to households, as a proportion of GDP, fell from 6.1% to 5.9%.

Graph 1 : Commonwealth Taxation Revenues

• State taxation revenue was $54,536m, an increase of $3,910m (7.7%)
• State adjusted taxation revenue was $126,942m, an increase of $6,975m
• State adjusted total revenue was $191,164m, an increase of $20,941m
• State adjusted total revenue less transfers to households was $186,092m, an increase of $20,306m
• State adjusted total revenue less transfers to households, as a proportion of GDP, increased to 14.5% compared to 13.2% in 2008-09.

Graph 2: State Taxation Revenues

• Local taxation revenue was $11,566m, an increase of $700m (6.4%)
• Local adjusted taxation revenue was $14,462m, an increase of $266m
• Local total revenue less transfers to households was $32,418m, an increase of $1,810m
• Local adjusted total revenue less transfers to households, as a proportion of GDP, increased from 2.4% to 2.5%.

Graph 3 : Local Taxation Revenues