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Statement 4: Revenue

The 2016‑17 Budget forecasts for tax receipts, excluding new policy, have been revised down since the 2015‑16 MYEFO by $4.6 billion in 2016‑17 and $13.5 billion over the four years to 2018‑19. Excluding GST, tax receipts are forecast to be $4.6 billion lower in 2016‑17 and $14.2 billion lower over the four years to 2018‑19.

Since the 2015‑16 MYEFO, forecasts for total wages and non‑mining profits have been revised down, partly offset by higher forecasts for mining profits owing to recent strength in commodity prices. As a result, the forecast for nominal GDP has been revised down by $27.5 billion over the four years to 2018‑19. These revisions, the compositional change to nominal GDP and weaker tax collections in the current year have combined to weaken the outlook for tax receipts.

Weaker forecast total wages contribute to lower forecasts for taxes from individuals of $12 billion over the four years to 2018‑19, excluding new policy. In addition, forecast superannuation fund tax, excluding new policy, has been revised down by $5.5 billion. These downward revisions have been partly offset by upward revisions to forecast indirect taxes.

The Government's ten year enterprise tax plan will deliver benefits for Australians by encouraging greater investment and higher wages, while the tax integrity package will increase tax receipts by $2.4 billion over the forward estimates. Superannuation reforms that better target superannuation concessions will also contribute $3.1 billion to tax receipts over the forward estimates.

In 2016‑17, tax receipts as a share of GDP are expected to be 22.2 per cent, lower than the 2015‑16 MYEFO estimate of 22.5 per cent.

Overview

Since the 2015‑16 MYEFO, expected tax receipts, including new policy, have been revised down by around $6.4 billion in 2016‑17 and $14.7 billion over the four years to 2018‑19. Excluding GST, tax receipts have been revised down by around $6.3 billion in 2016‑17 and $15.7 billion over the four years to 2018‑19. As GST is paid to the States, tax receipts excluding GST represent the tax receipts available to the Australian Government.

Including new policy, tax receipts are forecast to grow by 3.1 per cent in 2015‑16 and 5.0 per cent in 2016‑17 (Table 1). Total tax receipts as a share of GDP are expected to increase from 22.2 per cent in 2016‑17 to 23.5 per cent by 2019‑20, an increase of 1.3 percentage points. The 2016‑17 tax‑to‑GDP ratio is forecast to be lower than at the 2015‑16 Budget, and lower for each year of the forward estimates. Excluding GST, the tax‑to‑GDP ratio is expected to increase by 1.3 percentage points from 2016‑17 to 2019‑20.

Table 1: Australian Government general government receipts
  Actual   Estimates   Projections
  2014‑15   2015‑16 2016‑17 2017‑18   2018-19 2019-20
Total taxation receipts ($b) 353.5   364.5 382.8 410.2   438.8 468.3
Growth on previous year (%) 4.0   3.1 5.0 7.2   7.0 6.7
Per cent of GDP 22.0   22.1 22.2 22.7   23.1 23.5
Tax receipts excluding GST ($b) 299.2   307.1 322.1 346.2   371.5 397.9
Growth on previous year (%) 3.6   2.6 4.9 7.5   7.3 7.1
Per cent of GDP 18.6   18.6 18.7 19.2   19.6 20.0
Non-taxation receipts ($b) 24.8   23.5 28.5 27.2   31.1 32.5
Growth on previous year (%) 21.8   -5.2 21.2 -4.5   14.3 4.4
Per cent of GDP 1.5   1.4 1.7 1.5   1.6 1.6
Total receipts ($b) 378.3   388.0 411.3 437.4   469.9 500.7
Growth on previous year (%) 5.0   2.6 6.0 6.3   7.4 6.6
Per cent of GDP 23.5   23.5 23.9 24.2   24.8 25.1