EXPLANATORY NOTES


INTRODUCTION

1 This publication contains statistics of revenue collected by all levels of government in Australia in the form of taxes since 2007-08.


CONCEPTS AND DEFINITIONS

2 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, 2005 (cat. no. 5514.0).

3 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

4 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/or use of goods and services and the performance of activities.

5 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.

6 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
• capital taxes.

7 The Taxes Classification has been developed to provide sufficient detail for international reporting. The 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
• taxes on the use of goods and performance of activities.

8 These tax groups are divided into seventeen subgroups according to the type of entities, property, activities, goods or services being taxed. The subgroups are further subdivided into sixty classes, generally describing the specific type of tax actually collected in Australia.


CONSOLIDATION

9 To compile statistics about the financial activities of a particular level of government, or any other grouping of public sector units, transactions and debtor/creditor relationships between units within the chosen grouping (sector or subsector) have to be matched and eliminated to avoid double counting. The process of matching and eliminating these items within the chosen group is known as 'consolidation'.


OTHER AGGREGATES USED

10 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 deducting allowances for the consumption of fixed capital (depreciation). The current price estimate of GDP is used to calculate the GDP ratios in this publication, see note 13.


INTERSTATE COMPARISONS

11 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 in other jurisdictions.


HISTORICAL COMPARISONS

12 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.


TAXATION REVENUE AS A PROPORTION OF GROSS DOMESTIC PRODUCT (GDP)

13 The current price estimate of GDP is used to calculate the GDP ratios in this publication. This is obtained by reflating the average chain volume estimate, derived from the three independent approaches, by the implicit price deflator derived from the expenditure-based estimates. GDP is as published in Table 36, Expenditure on Gross Domestic Product (GDP), Chain volume measures and current prices in the December quarter 2016 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0).


TAXATION PER CAPITA

14 The population estimates used to calculate the taxation per capita figures in this publication are Estimated Resident Population at 31 December each year, as published in Australian Demographic Statistics (cat. no. 3101.0). The annual average taxation per capita is calculated by dividing the total taxation revenue by the Estimated Resident Population, for each jurisdiction.


REVISIONS

15 GFS data are revised on an annual basis. For this reason differences can occur between equivalent aggregates published in earlier years.


RELATED PUBLICATIONS

16 Users may refer to the following publications which contain related information:

• Australian National Accounts: Finance and Wealth (cat. no. 5232.0) - issued quarterly
• Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) - issued quarterly
• Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2005 (cat. no. 5514.0)
• Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2015 (cat. no. 5514.0)
• Australian System of National Accounts (cat. no. 5204.0) - issued annually
• Government Finance Statistics, Australia (cat. no. 5512.0) - issued annually
• Government Finance Statistics, Australia (cat. no. 5519.0.55.001) - issued quarterly
• Government Finance Statistics, Education, Australia (cat. no. 5518.0.55.001) - issued annually
• Government Financial Estimates, Australia (cat. no. 5501.0.55.001) - ceased
• Information Paper: Accruals-Based Government Finance Statistics (cat. no. 5517.0) - issued March 2000
• Information Paper: Developments in Government Finance Statistics (cat. no. 5516.0) - issued February 1997.