EXPLANATORY NOTES
EXPLANATORY NOTES
INTRODUCTION
1 This publication contains statistics of revenue collected by all levels of government in Australia in the form of taxes for the most recent 6 year period.
2 GFS taxation statistics are presented on an accrual accounting basis. Due to changes associated with the introduction of accrual accounting, data for 1998-99 and subsequent years have been compiled on a different methodological basis to that of previous years which were compiled using a cash accounting methodology. Consequently, data for 1998-99 and following years are not directly comparable with the data for 1997-98 and earlier periods.
CONCEPTS AND DEFINITIONS
3 The concepts and definitions underlying the statistics in this publication are described in detail in Australian System of Government Finance Statistics: Concepts, Sources and Methods (Cat. no. 5514.0), available on the ABS Web site, released September 2005.
4 The main purpose of the Concepts, Sources and Methods publication is to serve as a reference manual for users of GFS statistics who require a detailed understanding of the concepts, sources and methods in order to analyse and interpret the information that the statistics convey. It contains a copy of the Taxes Classification, which dissects this major form of government revenue according to the type of tax collected.
TAXES CLASSIFICATION
5 A tax is a compulsory levy imposed by the government, mainly to raise revenue. There is usually no clear and direct link between the payment of taxes and the provision of particular goods and services by government. Taxes are levied, inter alia, on income, wealth, production, sale and use of goods and services and the performance of activities.
6 Governments may regulate certain activities by issuing licences for which fees are payable. If the issue of such licences involves little or no work by the government then the revenue raised is deemed to be taxation revenue. However, if the government uses the issue of licences to exercise some proper regulatory function, such as checking the competency or qualifications of a would-be licensee, then the revenue raised is deemed not to be taxation revenue, but revenue from the sale of services by government unless it is clearly out of all proportion to the costs of providing the services.
7 Taxes that are levied on a regular or periodic basis are deemed to be current taxes. Taxes that are levied infrequently or at irregular intervals or under exceptional circumstances are deemed to be capital taxes.
8 The Taxes Classification is used to classify by detailed type all transactions in governments’ operating statements which are classified to the following economic type framework categories:
- taxes on income;
- other current taxes;
- taxes on products;
- other taxes on production; and
- capital taxes.
9 The Taxes Classification has been developed to present, in a systematic way and in sufficient detail for international reporting, the relationships that exist between taxes in terms of taxation criteria adopted by the Organisation for Economic Cooperation and Development. The first five groups of the Taxes Classification, which represent the broad bases on which taxes are levied in Australia, are:
- taxes on income;
- employers’ payroll taxes;
- taxes on property;
- taxes on the provision of goods and services; and
- taxes on the use of goods and performance of activities.
10 These tax groups are divided into seventeen subgroups according to the type of entities, property, activities, goods or services being taxed. The subgroups, which are further subdivided into sixty classes, generally describe the specific type of tax actually collected in Australia.
CONSOLIDATION
11 Transactions and debtor/creditor relationships between units within the chosen grouping (sector or subsector) have to be matched and eliminated to avoid double counting in compiling statistics about the financial activities of a particular level of government, or any other grouping of public sector units. The process of matching and eliminating these items within the chosen group is known as 'consolidation'.
OTHER AGGREGATES USED
12 Gross domestic product (GDP) is defined as the total market value of goods and services produced in Australia within a given period after deducting the cost of goods and services used up in the process of production, but before allowance for the consumption of fixed capital (depreciation).
INTERSTATE COMPARISONS
13 As well as showing the variety of types of taxes levied in Australia, the tables in this publication have been designed to show the relative importance of the tax system of the Commonwealth, state and local levels of government. They have also been designed to show the extent and composition of taxation levied by each state government (including subsidiary authorities). In this latter connection, it should be noted that interstate comparison of tax collections by state or local governments separately can be misleading unless account is taken of state-to-state variations in the range of activities for which these two levels of government are responsible. In the Australian Capital Territory, for example, only a state level of government exists and a number of functions performed by it are undertaken by local government authorities elsewhere.
TAXATION PER CAPITA
14 The population estimates underlying the taxation per capita figures in this publication are calculated across a full twelve month period, involving the average of five quarters (end of June quarter previous year to end of June quarter current year) of Estimated Residential Population (ERP) data from Australian Demographic Statistics (ABS cat. no 3101.0). The total taxation revenue for each jurisdiction is then divided by the average ERP figure.
15 The annual average taxation per capita across all states is calculated by taking the total taxation revenue for those jurisdictions and dividing it by the average ERP for Australia across the relevent five quarters (i.e. end of June quarter previous year to end of June quarter current year).
REVISIONS
16 GFS data are revised on an annual basis. For this reason differences can occur between equivalent aggregates published in earlier years.
ABS DATA AVAILABLE ON REQUEST
17 More detailed information is available on request, on a fee for service basis. Inquiries should be directed to the officer whose name appears in the Inquiries section at the front of this publication.
RELATED PUBLICATIONS
18 Users may wish to refer to the following publications which contain related information:
19 Australian National Accounts: Financial Accounts (cat. no.5232.0) - issued quarterly
20 Australian National Accounts: National Income, Expenditure and Product (cat. no.5206.0) - issued quarterly
21 Australian System of Government Finance Statistics: Concepts, Sources and Methods (cat. no.5514.0) - September 2005
22 Australian System of National Accounts (cat. no.5204.0) - issued annually
23 Government Finance Statistics, Australia (cat. no.5512.0) - issued annually
24 Government Finance Statistics, Australia, Quarterly (cat. no.5519.0.55.001) - issued quarterly
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