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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)
	2007–08	2008–09	2009–10	2010–11	2011–12	2012–13
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Taxation revenue collected(b)	285 949	278 363	267 678	289 120	317 548	338 364
As % of GDP	24.3	22.1	20.6	20.6	21.4	22.2
As % of total tax revenue	82.0	82.0	80.3	80.5	81.4	81.5
2. Current grants to state government(c)	69 480	73 087	75 682	79 978	84 064	84 870
3. Current grants to local government	89	46	12	14	35	32
4. Current grants to multi–jurisdictional sector(d)	7 347	6 691	8 808	8 250	8 617	9 108
5. Adjusted taxation revenue =1–2–3–4(e)	209 033	198 539	183 177	200 877	224 832	244 354
As % of GDP	17.7	15.8	14.1	14.3	15.1	16.0
As % of total tax revenue	59.9	58.5	55.0	55.9	57.7	58.9
STATE
1. Taxation revenue collected(b)	53 310	50 784	54 716	58 323	59 875	63 497
As % of GDP	4.5	4.0	4.2	4.1	4.0	4.2
As % of total tax revenue	15.3	15.0	16.4	16.2	15.4	15.3
2. Current grants from Commonwealth government	69 480	73 087	75 682	79 978	84 064	84 870
3. Current grants to local government	2 220	3 284	2 857	3 333	4 217	3 737
4. Current grants to multi–jurisdictional sector(d)	330	462	499	569	499	538
5. Adjusted taxation revenue =1+2–3–4(e)	120 241	120 124	127 042	134 399	139 223	144 092
As % of GDP	10.2	9.5	9.8	9.6	9.4	9.5
As % of total tax revenue	34.5	35.4	38.1	37.4	35.7	34.7
LOCAL
1. Taxation revenue collected(b)	10 139	10 896	11 607	12 449	13 202	14 027
As % of GDP	0.9	0.9	0.9	0.9	0.9	0.9
As % of total tax revenue	2.9	3.2	3.5	3.5	3.4	3.4
2. Current grants from Commonwealth government	89	46	12	14	35	32
3. Current grants from state government	2 220	3 284	2 857	3 333	4 217	3 737
4. Adjusted taxation revenue = 1+2+3(e)	12 447	14 227	14 476	15 797	17 454	17 797
As % of GDP	1.1	1.1	1.1	1.1	1.2	1.2
As % of total tax revenue	3.6	4.2	4.3	4.4	4.5	4.3
TOTAL
Gross Domestic Product	1 178 953	1 258 654	1 296 324	1 406 670	1 486 072	1 522 874
Total taxation revenue collected	348 800	339 419	333 336	359 205	389 895	415 122
As % of GDP	29.6	27.0	25.7	25.5	26.2	27.3
(a) As published in Australian National Accounts, December Quarter 2013 (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 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 owing to grants paid to the multi–jurisdictional sector.

TABLE 2. ADJUSTED TOTAL REVENUE, less transfers to households, and as % of GDP(a)
	2007–08	2008–09	2009–10	2010–11	2011–12	2012–13
	$m	$m	$m	$m	$m	$m
COMMONWEALTH
1. Adjusted taxation revenue(b)	209 033	198 539	183 177	200 877	224 832	244 354
2. Non–taxation revenue(c)	17 729	20 285	24 970	20 863	21 539	23 471
3. Adjusted total revenue =1+2	226 762	218 824	208 146	221 740	246 371	267 824
As % of GDP	19.2	17.4	16.1	15.8	16.6	17.6
4. Direct benefits to households(d)	86 078	111 548	98 490	105 559	116 160	121 713
5. Indirect benefits to households(e)	27 606	30 767	33 548	36 315	36 147	34 790
6. Adjusted total revenue, less transfers to households =3–4–5	113 077	76 509	76 108	79 865	94 063	111 321
As % of GDP	9.6	6.1	5.9	5.7	6.3	7.3
STATE
1. Adjusted taxation revenue(b)	120 241	120 124	127 042	134 399	139 223	144 092
2. Non–taxation revenue, excluding current grants from Commonwealth government(c)	38 550	50 143	64 268	62 138	66 308	59 311
3. Adjusted total revenue =1+2	158 791	170 267	191 310	196 538	205 531	203 403
As % of GDP	13.5	13.5	14.8	14.0	13.8	13.4
4. Direct benefits to households(d)	1 350	1 182	1 948	1 583	1 339	1 647
5. Indirect benefits to households(e)	3 006	3 253	3 693	4 106	4 480	4 748
6. Adjusted total revenue, less transfers to households = 3–4–5	154 435	165 833	185 669	190 849	199 712	197 008
As % of GDP	13.1	13.2	14.3	13.6	13.4	12.9
LOCAL
1. Adjusted taxation revenue(b)	12 447	14 227	14 476	15 797	17 454	17 797
2. Non–taxation revenue, excluding current grants from Commonwealth and state governments(c)	15 000	16 562	17 376	17 889	18 871	20 566
3. Adjusted total revenue =1+2	27 447	30 789	31 852	33 686	36 325	38 363
As % of GDP	2.3	2.4	2.5	2.4	2.4	2.5
4. Direct and indirect benefits to households(f)	. .	. .	. .	. .	. .	. .
5. Adjusted total revenue, less transfers to households = 3–4	27 447	30 789	31 852	33 686	36 325	38 363
As % of GDP	2.3	2.4	2.5	2.4	2.4	2.5

• Commonwealth taxation revenue was $338,364m, an increase of $20,816m (7%).
• Commonwealth adjusted taxation revenue was $244,354m, an increase of $19,522m (9%).
• Commonwealth adjusted total revenue was $267,824m, an increase of $21,453m (9%).
• Commonwealth adjusted total revenue less transfers to households was $111,321m, an increase of $17,258m (18%).
• Commonwealth adjusted total revenue less transfers to households as a proportion of GDP, increased from 6.3% to 7.3%.

Graph 1: Commonwealth Taxation Revenues

• State taxation revenue was $63,497m, an increase of $3,622m (6%).
• State adjusted taxation revenue was $144,092m, an increase of $4,869m (3%).
• State adjusted total revenue was $203,403m, a decrease of $2,128m (1%).
• State adjusted total revenue less transfers to households was $197,008m, a decrease of $2,704m (1%).
• State adjusted total revenue less transfers to households as a proportion of GDP, decreased from 13.4% to 12.9%.

Graph 2: State Taxation Revenues

• Local taxation revenue was $14,027m, an increase of $825m (6%).
• Local adjusted taxation revenue was $17,797m, an increase of $343m (2%).
• Local total revenue less transfers to households was $38,363m, an increase of $2,038m (6%).
• 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