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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 section 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)
	2006–07	2007–08	2008–09	2009–10	2010–11	2011–12
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Taxation revenue collected(b)	262 101	285 954	278 363	267 556	289 124	317 888
As % of GDP	24.2	24.3	22.2	20.7	20.6	21.6
As % of total tax revenue	81.9	82.0	82.0	80.3	80.5	81.5
2. Current grants to state government(c)	63 873	69 480	73 087	75 682	79 978	84 064
3. Current grants to local government	56	89	46	12	14	35
4. Current grants to multi–jurisdictional sector(d)	5 589	7 347	6 691	8 808	8 250	8 617
5. Adjusted taxation revenue =1–2–3–4(e)	192 583	209 038	198 539	183 055	200 881	225 173
As % of GDP	17.8	17.8	15.8	14.2	14.3	15.3
As % of total tax revenue	60.2	60.0	58.5	55.0	56.0	57.7
STATE
1. Taxation revenue collected(b)	48 874	53 134	50 631	54 536	58 121	59 686
As % of GDP	4.5	4.5	4.0	4.2	4.1	4.0
As % of total tax revenue	15.3	15.2	14.9	16.4	16.2	15.3
2. Current grants from Commonwealth government	63 873	69 480	73 087	75 682	79 978	84 064
3. Current grants to local government	2 102	2 220	3 284	2 857	3 333	4 217
4. Current grants to multi–jurisdictional sector(d)	287	330	462	499	569	499
5. Adjusted taxation revenue =1+2–3–4(e)	110 358	120 065	119 972	126 862	134 198	139 034
As % of GDP	10.2	10.2	9.6	9.8	9.6	9.4
As % of total tax revenue	34.5	34.4	35.4	38.1	37.4	35.6
LOCAL
1. Taxation revenue collected(b)	9 405	10 139	10 896	11 607	12 449	13 209
As % of GDP	0.9	0.9	0.9	0.9	0.9	0.9
As % of total tax revenue	2.9	2.9	3.2	3.5	3.5	3.4
2. Current grants from Commonwealth government	56	89	46	12	14	35
3. Current grants from state government	2 102	2 220	3 284	2 857	3 333	4 217
4. Adjusted taxation revenue = 1+2+3(e)	11 563	12 447	14 227	14 476	15 797	17 460
As % of GDP	1.1	1.1	1.1	1.1	1.1	1.2
As % of total tax revenue	3.6	3.6	4.2	4.3	4.4	4.5
TOTAL
Gross Domestic Product	1 083 303	1 175 321	1 254 293	1 292 315	1 403 888	1 474 686
Total taxation revenue collected	319 872	348 629	339 266	333 035	359 006	390 067
As % of GDP	29.5	29.7	27.0	25.8	25.6	26.5
(a) As published in Australian National Accounts, December Quarter 2012 (Cat. no. 5206.0), Table 32 Expenditure on GDP, Current Prices: Annual.
(b) According to GFSM2001.
(c) Part of the Commonwealth Government grants paid to State Goverments are onpassed 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 owing to grants paid to the multi–jurisdictional sector.

TABLE 2. ADJUSTED TOTAL REVENUE, less transfers to households, and as % of GDP(a)
	2006–07	2007–08	2008–09	2009–10	2010–11	2011–12
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Adjusted taxation revenue(b)	192 583	209 038	198 539	183 055	200 881	225 173
2. Non–taxation revenue(c)	15 990	17 619	20 281	24 843	20 858	21 562
3. Adjusted total revenue =1+2	208 573	226 657	218 819	207 897	221 739	246 736
As % of GDP	19.3	19.3	17.4	16.1	15.8	16.7
4. Direct benefits to households(d)	81 138	86 078	111 548	98 490	105 559	112 907
5. Indirect benefits to households(e)	25 090	27 606	30 767	33 548	36 315	39 400
6. Adjusted total revenue, less transfers to households =3–4–5	102 346	112 972	76 505	75 859	79 864	94 428
As % of GDP	9.4	9.6	6.1	5.9	5.7	6.4
STATE
1. Adjusted taxation revenue(b)	110 358	120 065	119 972	126 862	134 198	139 034
2. Non–taxation revenue, excluding current grants from Commonwealth government(c)	40 922	38 550	50 156	64 333	62 196	66 359
3. Adjusted total revenue =1+2	151 280	158 615	170 128	191 195	196 394	205 393
As % of GDP	14.0	13.5	13.6	14.8	14.0	13.9
4. Direct benefits to households(d)	1 046	1 350	1 687	1 948	1 854	1 339
5. Indirect benefits to households(e)	2 441	2 516	2 751	3 111	3 566	3 882
6. Adjusted total revenue, less transfers to households = 3–4–5	147 794	154 749	165 691	186 136	190 974	200 172
As % of GDP	13.6	13.2	13.2	14.4	13.6	13.6
LOCAL
1. Adjusted taxation revenue(b)	11 563	12 447	14 227	14 476	15 797	17 460
2. Non–taxation revenue, excluding current grants from Commonwealth and state governments(c)	14 579	15 368	17 049	17 828	18 224	19 414
3. Adjusted total revenue =1+2	26 142	27 815	31 275	32 304	34 021	36 874
As % of GDP	2.4	2.4	2.5	2.5	2.4	2.5
4. Direct and indirect benefits to households(f)	. .	. .	. .	. .	. .	. .
5. Adjusted total revenue, less transfers to households = 3–4	26 142	27 815	31 275	32 304	34 021	36 874
As % of GDP	2.4	2.4	2.5	2.5	2.4	2.5

• Commonwealth taxation revenue was $317,888m, an increase of $28,764m (10%)
• Commonwealth adjusted taxation revenue was $225,173m, an increase of $24,292m (12%)
• Commonwealth adjusted total revenue was $246,736m, an increase of $24,997m (11%)
• Commonwealth adjusted total revenue less transfers to households was $94,428m, an increase of $14,564m (18%)
• Commonwealth adjusted total revenue less transfers to households as a proportion of GDP, increased from 5.7% to 6.4% from 2010–11 to 2011–12.

Graph 1 : Commonwealth Taxation Revenues

• State taxation revenue was $59,686m, an increase of $1,565m (3%)
• State adjusted taxation revenue was $139,034m, an increase of $4,836m (4%)
• State adjusted total revenue was $205,393m, an increase of $8,999m (5%)
• State adjusted total revenue less transfers to households was $200,172m, an increase of $9,198m (5%)
• State adjusted total revenue less transfers to households as a proportion of GDP, remained constant at 13.6% from 2010–11 to 2011–12.

Graph 2: State Taxation Revenues

• Local taxation revenue was $13,209m, an increase of $760m (6%)
• Local adjusted taxation revenue was $17,460m, an increase of $1,663m (11%)
• Local total revenue less transfers to households was $36,874m, an increase of $2,853m (8%)
• Local adjusted total revenue less transfers to households as a proportion of GDP, increased from 2.4% to 2.5% from 2010–11 to 2011–12.

Graph 3 : Local Taxation Revenues