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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)
	2008–09	2009–10	2010–11	2011–12	2012–13	2013–14
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Taxation revenue collected(b)	278 361	267 678	289 120	317 541	338 287	351 522
As % of GDP	22.1	20.7	20.5	21.3	22.2	22.2
As % of total tax revenue	82.0	80.3	80.5	81.4	81.5	81.0
2. Current grants to state government(c)	73 087	75 682	79 978	84 064	84 870	88 625
3. Current grants to local government	46	12	14	35	32	66
4. Current grants to multi–jurisdictional sector(d)	6 691	8 808	8 250	8 617	9 108	9 634
5. Adjusted taxation revenue =1–2–3–4(e)	198 537	183 177	200 877	224 826	244 277	253 196
As % of GDP	15.8	14.1	14.3	15.1	16.1	16.0
As % of total tax revenue	58.5	54.9	55.9	57.7	58.8	58.4
STATE
1. Taxation revenue collected(b)	50 807	54 764	58 395	59 950	63 577	68 720
As % of GDP	4.0	4.2	4.1	4.0	4.2	4.3
As % of total tax revenue	15.0	16.4	16.3	15.4	15.3	15.8
2. Current grants from Commonwealth government	73 087	75 682	79 978	84 064	84 870	88 625
3. Current grants to local government	3 284	2 857	3 333	4 217	3 737	2 719
4. Current grants to multi–jurisdictional sector(d)	463	499	569	501	538	464
5. Adjusted taxation revenue =1+2–3–4(e)	120 147	127 090	134 471	139 296	144 172	154 162
As % of GDP	9.6	9.8	9.6	9.4	9.5	9.7
As % of total tax revenue	35.4	38.1	37.4	35.7	34.7	35.5
LOCAL
1. Taxation revenue collected(b)	10 896	11 607	12 449	13 202	14 027	14 738
As % of GDP	0.9	0.9	0.9	0.9	0.9	0.9
As % of total tax revenue	3.2	3.5	3.5	3.4	3.4	3.4
2. Current grants from Commonwealth government	46	12	14	35	32	66
3. Current grants from state government	3 284	2 857	3 333	4 217	3 737	2 719
4. Adjusted taxation revenue = 1+2+3(e)	14 227	14 476	15 797	17 454	17 797	17 523
As % of GDP	1.1	1.1	1.1	1.2	1.2	1.1
As % of total tax revenue	4.2	4.3	4.4	4.5	4.3	4.0
MULTI-JURISDICTIONAL
1. Taxation revenue collected(b)	–	–	–	–	–	–
2. Current grants from Commonwealth government	6 691	8 808	8 250	8 617	9 108	9 634
3. Current grants from state government	463	499	569	501	538	464
4. Adjusted taxation revenue = 1+2+3(e)	7 153	9 306	8 819	9 118	9 647	10 098
As % of GDP	0.6	0.7	0.6	0.6	0.6	0.6
As % of total tax revenue	2.1	2.8	2.5	2.3	2.3	2.3
TOTAL
Gross Domestic Product	1 258 074	1 295 727	1 407 865	1 488 028	1 520 944	1 581 837
Total taxation revenue collected	339 440	333 391	359 282	389 970	415 119	433 885
As % of GDP	27.0	25.7	25.5	26.2	27.3	27.4
– nil or rounded to zero (including null cells)
(a) As published in Australian National Accounts: National Income, Expenditure and Product, December Quarter 2014 (Cat. no. 5206.0), Table 36 Expenditure on Gross Domestic Product (GDP), Chain Volume Measures and Current Prices: Annual.
(b) According to GFSM2001.
(c) Part of the Commonwealth Government grants paid to State Governments are passed on to Local Governments.
(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 for all levels of government does not equal the sum of adjusted taxation revenue for all levels of government as a result of consolidation.

TABLE 2. ADJUSTED TOTAL REVENUE, Less Transfers to Households, and as % of GDP(a)
	2008–09	2009–10	2010–11	2011–12	2012–13	2013–14
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Adjusted taxation revenue(b)	198 537	183 177	200 877	224 826	244 277	253 196
2. Non–taxation revenue(c)	20 285	24 970	20 863	21 539	23 468	23 693
3. Adjusted total revenue =1+2	218 822	208 146	221 740	246 365	267 744	276 890
As % of GDP	17.4	16.1	15.8	16.6	17.6	17.5
4. Direct benefits to households(d)	111 548	98 490	105 559	112 907	117 221	125 174
5. Indirect benefits to households(e)	30 767	33 548	36 315	39 400	39 283	40 943
6. Adjusted total revenue, less transfers to households =3–4–5	76 507	76 108	79 865	94 057	111 240	110 773
As % of GDP	6.1	5.9	5.7	6.3	7.3	7.0
STATE
1. Adjusted taxation revenue(b)	120 147	127 090	134 471	139 296	144 172	154 162
2. Non–taxation revenue, excluding current grants from Commonwealth government(c)	50 026	64 113	62 010	65 986	59 139	67 882
3. Adjusted total revenue =1+2	170 173	191 203	196 481	205 282	203 311	222 044
As % of GDP	13.5	14.8	14.0	13.8	13.4	14.0
4. Direct benefits to households(d)	1 182	1 948	1 583	1 339	1 412	1 483
5. Indirect benefits to households(e)	3 253	3 693	4 106	4 480	4 749	5 342
6. Adjusted total revenue, less transfers to households = 3–4–5	165 738	185 562	190 792	199 463	197 150	215 219
As % of GDP	13.2	14.3	13.6	13.4	13.0	13.6
LOCAL
1. Adjusted taxation revenue(b)	14 227	14 476	15 797	17 454	17 797	17 523
2. Non–taxation revenue, excluding current grants from Commonwealth and state governments(c)	15 999	18 245	18 751	19 525	20 828	21 083
3. Adjusted total revenue =1+2	30 225	32 721	34 548	36 978	38 624	38 606
As % of GDP	2.4	2.5	2.5	2.5	2.5	2.4
4. Direct and indirect benefits to households(f)	. .	. .	. .	. .	. .	. .
5. Adjusted total revenue, less transfers to households = 3–4	30 225	32 721	34 548	36 978	38 624	38 606
As % of GDP	2.4	2.5	2.5	2.5	2.5	2.4

• Commonwealth taxation revenue was $351,522m, an increase of $13,235m (4%).
• Commonwealth adjusted taxation revenue was $253,196m, an increase of $8,919m (4%).
• Commonwealth adjusted total revenue was $276,890m, an increase of $9,146m (3%).
• Commonwealth adjusted total revenue less transfers to households was $110,773m, a decrease of $467m (-0.4%).
• Commonwealth adjusted total revenue less transfers to households as a proportion of GDP, decreased from 7.3% to 7.0%.

Graph 1: Commonwealth Taxation Revenues

• State taxation revenue was $68,720m, an increase of $5,143m (8%).
• State adjusted taxation revenue was $154,162m, an increase of $9,990m (7%).
• State adjusted total revenue was $222,044m, an increase of $18,733m (9%).
• State adjusted total revenue less transfers to households was $215,219m, an increase of $18,069m (9%).
• State adjusted total revenue less transfers to households as a proportion of GDP, increased from 13.0% to 13.6%.

Graph 2: State Taxation Revenues

• Local taxation revenue was $14,738m, an increase of $711m (5%).
• Local adjusted taxation revenue was $17,523m, a decrease of $274m (-2%).
• Local total revenue less transfers to households was $38,606m, a decrease of $18m (-0.05%).
• 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