Taxation revenue falls due to COVID-19
Total taxation revenue collected in Australia fell $8.0 billion (-1.4%) from $560.0 billion in 2018-19 to $552.0 billion in 2019-20.
Coronavirus (COVID-19)
COVID-19 impacted taxation revenue in the 2019-20 across all levels of government, both as a result of changes in taxation policy and through changes in economic activity.
State and local governments implemented a range of COVID-19 tax relief policies, including:
- payroll tax relief that either waived, refunded, deferred or reduced payroll tax obligations for businesses
- land tax relief for landlords where tenants had their rent waived or deferred
For additional information:
- an article has been included in the Government Finance Statistics, Annual 2019-20 publication: Classifying COVID-19 policy interventions during 2019-20 in macroeconomic statistics.
- the May 2020 publication Economic measurement during COVID-19: Selected issues in the Economic Accounts
- ABS data measuring the broader impact of COVID-19 can be found via abs.gov.au/covid19
Key contributors to the fall in taxation revenue
Key contributors to the fall in All Australia government taxation revenue in 2019-20 were:
- Company income tax was down $7.1 billion (-7.5%) as a result of the adverse effect of the COVID-19 pandemic on businesses with the largest falls in the tourism, banking, superannuation and insurance sectors.
- Income tax paid by superannuation funds was down $4.3 billion (-39.3%) due to weakness in financial markets during the onset of the COVID-19 pandemic.
- Goods and Services Tax (GST) was down $1.1 billion (-1.7%) due to reduced consumer spending in cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing.
- Payroll taxes across all State and local governments were down $0.9 billion (-3.6%) reflecting tax relief and payroll refund policies, with the largest falls in New South Wales, Queensland and Victoria.
- Gambling taxes were down $0.9 billion (-13.1%) across all state governments, with the largest falls in Queensland, New South Wales, South Australia and Victoria. This decline was the result of COVID-19 restrictions across the country, which led to pubs, clubs and other licensed venues and casinos being closed for the majority of the June quarter.
- Personal income tax was down $0.3 billion (-0.2%) reflecting a fall in hours worked across the economy and weakness in capital gains taxes associated with subdued property and financial market conditions.
- Stamp duties on conveyances showed weaker growth than prior years, up $0.3 billion (1.5%) across all State and local governments. This weakness was driven by the COVID-19 property market impacts in New South Wales, Queensland and Victoria.
- average annual movement for the 5 years preceding the current year
Total taxation revenue as a percentage of GDP
Total taxation revenue as a percentage of GDP fell from 28.7% in 2018-19 to 27.8% in 2019-20.
- using the GDP annual series as published in Table 36 in the December quarter 2020 issue in Australian National Accounts: National Income, Expenditure and Product.