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Australian Government Coat of Arms

Budget | 2015-16

Budget 2015-16
Australian Government Coat of Arms, Budget 2015-16

Part 3: Fiscal Strategy and Outlook (continued)

Fiscal Outlook

Budget aggregates

An underlying cash deficit of $37.4 billion (2.3 per cent of GDP) is expected in 2015‑16, improving to a deficit of $14.2 billion (0.7 per cent of GDP) in 2018‑19.

A headline cash deficit of $48.2 billion (2.9 per cent of GDP) is expected in 2015‑16, improving to a deficit of $23.8 billion (1.2 per cent of GDP) in 2018‑19.

In accrual terms, a fiscal deficit of $35.8 billion (2.2 per cent of GDP) is expected in 2015‑16, improving to a deficit of $10.2 billion (0.5 per cent of GDP) in 2018‑19.

Table 3.3 provides key budget aggregates for the Australian Government general government sector.

Table 3.3: Australian Government general government sector budget aggregates
  Estimates
  2015‑16   2016‑17
  Budget
$b
MYEFO
$b
  Budget
$b
MYEFO
$b
Receipts 398.0 394.9   422.5 415.3
Per cent of GDP 24.0 23.9   24.2 24.1
Payments(a) 429.8 428.3   444.9 445.3
Per cent of GDP 25.9 25.9   25.5 25.8
Net Future Fund earnings 3.3 4.0   3.4 3.7
Underlying cash balance(b) -35.1 -37.4   ‑25.8 ‑33.7
Per cent of GDP -2.1 -2.3   ‑1.5 ‑2.0
Revenue 405.4 401.0   433.4 423.2
Per cent of GDP 24.5 24.3   24.8 24.5
Expenses 434.5 432.2   452.7 451.2
Per cent of GDP 26.2 26.2   25.9 26.1
Net operating balance -29.1 -31.3   ‑19.2 ‑28.0
Net capital investment 3.9 4.5   4.2 4.7
Fiscal balance -33.0 -35.8   ‑23.4 ‑32.8
Per cent of GDP -2.0 -2.2   ‑1.3 ‑1.9
Memorandum item:          
Headline cash balance -44.8 -48.2   ‑43.9 ‑48.9
  Projections       
  2017‑18    2018‑19 
  Budget
$b
MYEFO
$b
  Budget
$b
MYEFO
$b
Receipts 453.6 440.9   488.2 473.5
Per cent of GDP 24.7 24.3   25.2 24.8
Payments(a) 464.3 459.9   491.1 483.3
Per cent of GDP 25.3 25.3   25.3 25.3
Net Future Fund earnings 3.7 4.0   4.0 4.5
Underlying cash balance(b) ‑14.4 ‑23.0   ‑6.9 ‑14.2
Per cent of GDP ‑0.8 ‑1.3   ‑0.4 ‑0.7
Revenue 466.2 452.6   501.3 487.1
Per cent of GDP 25.4 24.9   25.9 25.5
Expenses 471.8 465.9   499.4 491.4
Per cent of GDP 25.7 25.7   25.8 25.7
Net operating balance ‑5.6 ‑13.3   1.9 ‑4.3
Net capital investment 3.6 4.1   5.1 5.9
Fiscal balance ‑9.2 ‑17.4   ‑3.2 ‑10.2
Per cent of GDP ‑0.5 ‑1.0   ‑0.2 ‑0.5
Memorandum item:          
Headline cash balance ‑24.7 ‑32.3   ‑17.3 ‑23.8

(a) Equivalent to cash payments for operating activities, purchases of non‑financial assets and net acquisition of assets under finance leases.

(b) Excludes expected net Future Fund earnings.

Underlying cash balance estimates

Table 3.4: Summary of Australian Government general government sector cash flows
  Estimates
  2015‑16   2016‑17
  Budget
$b
MYEFO
$b
  Budget
$b
MYEFO
$b
Cash receipts          
Operating cash receipts 396.1 393.0   422.2 415.0
Capital cash receipts(a) 1.9 1.9   0.3 0.3
Total cash receipts 398.0 394.9   422.5 415.3
Cash payments          
Operating cash payments 418.7 416.5   433.4 433.2
Capital cash payments(b) 11.2 11.8   11.5 12.1
Total cash payments 429.8 428.3   444.9 445.3
Finance leases and similar arrangements(c) 0.0 0.0   0.0 0.0
GFS cash surplus(+)/deficit(-) -31.9 -33.4   ‑22.5 ‑29.9
Per cent of GDP -1.9 -2.0   ‑1.3 ‑1.7
less Net Future Fund earnings 3.3 4.0   3.4 3.7
Underlying cash balance(d) -35.1 -37.4   ‑25.8 ‑33.7
Per cent of GDP -2.1 -2.3   ‑1.5 ‑2.0
Memorandum items:          
Net cash flows from investments in financial assets for policy purposes -12.9 -14.7   ‑21.4 ‑18.9
plus Net Future Fund earnings 3.3 4.0   3.4 3.7
Headline cash balance -44.8 -48.2   ‑43.9 ‑48.9
  Projections       
  2017‑18    2018‑19 
  Budget
$b
MYEFO
$b
  Budget
$b
MYEFO
$b
Cash receipts          
Operating cash receipts 453.3 440.6   487.4 472.7
Capital cash receipts(a) 0.3 0.3   0.8 0.9
Total cash receipts 453.6 440.9   488.2 473.5
Cash payments          
Operating cash payments 451.7 446.8   477.3 469.0
Capital cash payments(b) 12.6 13.1   13.8 14.3
Total cash payments 464.3 459.9   491.1 483.3
Finance leases and similar arrangements(c) 0.0 0.0   0.0 0.0
GFS cash surplus(+)/deficit(-) ‑10.7 ‑19.0   ‑2.9 ‑9.8
Per cent of GDP ‑0.6 ‑1.0   ‑0.1 ‑0.5
less Net Future Fund earnings 3.7 4.0   4.0 4.5
Underlying cash balance(d) ‑14.4 ‑23.0   ‑6.9 ‑14.2
Per cent of GDP ‑0.8 ‑1.3   ‑0.4 ‑0.7
Memorandum items:          
Net cash flows from investments in financial assets for policy purposes ‑14.0 ‑13.3   ‑14.5 ‑14.0
plus Net Future Fund earnings 3.7 4.0   4.0 4.5
Headline cash balance ‑24.7 ‑32.3   ‑17.3 ‑23.8

(a) Equivalent to cash receipts from the sale of non‑financial assets in the cash flow statement.

(b) Equivalent to cash payments for purchases of non‑financial assets in the cash flow statement.

(c) The acquisition of assets under finance leases decreases the underlying cash balance. The disposal of assets previously held under finance leases increases the underlying cash balance.

(d) Excludes expected net Future Fund earnings.

The 2015‑16 underlying cash deficit has deteriorated by $2.3 billion since the 2015‑16 Budget but has improved by around $500 million compared with the 2014‑15 Final Budget Outcome.

Since the 2015‑16 Budget, the effect of parameter and other variations has resulted in a $33.8 billion reduction in receipts across the four years to 2018‑19, partly offset by a $13.2 billion reduction in payments.

Table 3.5: Reconciliation of general government sector underlying cash balance estimates
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
2015‑16 Budget underlying cash balances(a) -35,115 ‑25,836   ‑14,396 ‑6,905   ‑82,252
Per cent of GDP -2.1 ‑1.5   ‑0.8 ‑0.4    
Changes from 2015‑16 Budget to 2015‑16 MYEFO              
Effect of policy decisions(b)(c)              
Receipts -1,345 -917   -907 -668   -3,837
Payments 1,171 1,510   -1,209 -1,589   -117
Total policy decisions impact on underlying cash balance -2,516 -2,427   302 921   -3,720
Effect of parameter and other variations(c)              
Receipts -1,744 -6,216   -11,805 -14,034   -33,800
Payments -2,672 -1,155   -3,187 -6,217   -13,231
less Net Future Fund earnings 697 343   308 429   1,777
Total parameter and other variations impact on underlying cash balance 231 -5,404   -8,927 -8,246   -22,345
2015‑16 MYEFO underlying cash balance(a) -37,399 ‑33,667   ‑23,021 ‑14,229   ‑108,317
Per cent of GDP -2.3 ‑2.0   ‑1.3 ‑0.7    

(a) Excludes expected net Future Fund earnings.

(b) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.

(c) A positive number for receipts indicates an increase in the underlying cash balance, while a positive number for payments indicates a decrease in the underlying cash balance.

The Government remains committed to offsetting all new policy decisions. After taking into account the provision the Government previously made relating to the China‑Australia Free Trade Agreement, the overall impact of policy decisions since the 2015‑16 Budget is an improvement of almost $400 million over the four years to 2018‑19 (Table 3.6).

Table 3.6: Impact of decisions in the 2015‑16 MYEFO (underlying cash balance)
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
Total impact of policy decisions since the 2015‑16 Budget -2,516 ‑2,427   302 921   ‑3,720
Add: Provision made for the China Free Trade Agreement 655 1,005   1,160 1,295   4,115
Equals total impact of policy decisions -1,861 ‑1,422   1,462 2,216   395
Less: Decisions taken as part of negotiations with the Senate -539 -968   199 -169   -1,476
Net budget impact of new policy decisions -1,322 ‑454   1,263 2,385   1,871

Passage of a number of savings measures has been delayed in the Senate, causing a negative impact on the bottom line. The Government has taken steps to mitigate this impact where the prospect of legislation passing seemed remote.

The Government has revised its package of changes to family payments by not proceeding with measures blocked by the Senate and introducing new family payments measures and changes to the child care system that achieve similar savings.

In addition, the Government has delayed the implementation of reforms to higher education that have failed to pass the Senate, while the Government consults further on reforms for the future.

Negotiations in the Senate have also led to several additional spending measures to help secure the passage of legislation.

The net impact of decisions taken as part of negotiations with the Senate since the 2015‑16 Budget has been a cost to the underlying cash balance of $1.5 billion over the four years to 2018‑19.

Adjusting for the provision previously made for the China Free Trade Agreement and Senate negotiations, the net impact of policy decisions taken since the 2015‑16 Budget is a $1.9 billion improvement in the underlying cash balance over the forward estimates.

Table 3.7: Impacts and adjustments due to the Senate (underlying cash balance)
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
Decisions where likelihood of passing legislation seemed remote              
Family Payment Reform - a new families package 26 ‑118   ‑330 ‑917   ‑1,340
Family Day Care - improving integrity 18 127   311 474   931
Child Care System - changes 15 29   191 205   441
Higher Education Reform - delay -282 ‑196   32 75   ‑371
Impact of decisions where likelihood of passing legislation seemed remote -222 ‑158   204 ‑162   ‑339
Concessions to secure passage of legislation              
Infrastructure Investment Programme - new investments -316 ‑807   0 0   ‑1,123
National Wind Farm Commissioner and Independent Scientific Committee on Wind Turbines - establishment .. ..   .. ..   ‑1
Taxation treatment of biodiesel - extension of phase-in for new arrangements 0 ‑3   ‑5 ‑7   ‑14
Impact of concessions to secure passage of legislation -316 ‑809   ‑5 ‑7   ‑1,138
Delays in passing legislation (a)              
Attorney-General's -15 ‑16   ‑16 ‑17   ‑64
Employment -10 0   0 0   ‑10
Health -210 ‑36   ‑23 ‑24   ‑293
Industry and Science -24 0   0 0   ‑24
Social Services -956 ‑881   ‑1,417 ‑697   ‑3,952
Veterans' Affairs -11 0   0 0   ‑11
Impact of delays in passing legislation -1,226 ‑933   ‑1,456 ‑738   ‑4,354
Total impacts and adjustments due to the Senate -1,765 ‑1,901   ‑1,257 ‑907   ‑5,830

(a) Since the 2015‑16 Budget

Further details of the impact of policy decisions and major variations arising from parameter and other variations on the fiscal outlook are provided in the receipt estimates and payment estimates sections below.

Receipts estimates

Total receipts are expected to be $3.1 billion lower in 2015‑16 than estimated at the 2015‑16 Budget. Tax receipts are $1.9 billion lower and non‑tax receipts are $1.2 billion lower.

Table 3.8 and Table 3.9 provide a summary of changes in total receipts in 2015‑16 and 2016‑17.

Table 3.8: Australian Government general government sector cash receipts — 2015‑16
  Estimates     Change on Budget
  Budget
$m
MYEFO
$m
 
$m  

%  
Individuals and other withholding taxes          
Gross income tax withholding 176,800 175,200   ‑1,600 ‑0.9
Gross other individuals 40,800 41,600   800 2.0
less: Refunds 28,000 27,500   -500 -1.8
Total individuals and other withholding tax 189,600 189,300   ‑300 ‑0.2
Fringe benefits tax 4,880 4,530   ‑350 ‑7.2
Company tax 68,200 67,100   ‑1,100 ‑1.6
Superannuation fund taxes 9,080 7,730   ‑1,350 ‑14.9
Minerals resource rent tax(a) 0 0   0
Petroleum resource rent tax 1,450 1,000   -450 -31.0
Income taxation receipts 273,210 269,660   -3,550 -1.3
Goods and services tax 57,316 57,614   298 0.5
Wine equalisation tax 820 840   20 2.4
Luxury car tax 450 520   70 15.6
Excise and customs duty          
Petrol 6,100 6,200   100 1.6
Diesel 9,110 9,320   210 2.3
Other fuel products 2,840 2,420   ‑420 ‑14.8
Tobacco 9,370 9,150   ‑220 ‑2.3
Beer 2,390 2,330   ‑60 ‑2.5
Spirits 2,030 1,970   ‑60 ‑3.0
Other alcoholic beverages(b) 960 910   ‑50 ‑5.2
Other customs duty          
Textiles, clothing and footwear 380 440   60 15.8
Passenger motor vehicles 420 550   130 31.0
Other imports 1,120 1,370   250 22.3
less: Refunds and drawbacks 420 420   0 0.0
Total excise and customs duty 34,300 34,240   ‑60 ‑0.2
Carbon pricing mechanism 0 0   0
Agricultural levies 472 475   3 0.6
Other taxes(c) 3,573 4,881   1,308 36.6
Indirect taxation receipts 96,930 98,570   1,639 1.7
Taxation receipts 370,140 368,230   -1,911 -0.5
Sales of goods and services(c) 9,475 7,870   ‑1,605 ‑16.9
Interest received 3,334 3,874   539 16.2
Dividends 4,623 4,516   ‑107 ‑2.3
Other non-taxation receipts 10,407 10,401   -6 -0.1
Non-taxation receipts 27,840 26,661   -1,179 -4.2
Total receipts 397,980 394,891   ‑3,089 ‑0.8
Memorandum:          
Total excise(d) 24,820 21,330   -3,490 -14.1
Total customs duty(d) 9,480 12,910   3,430 36.2
Capital gains tax(e) 11,500 10,600   -900 -7.8
Medicare and DisabilityCare Australia levy 14,870 15,014   144 1.0

(a) The MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) Visa application charges have been reclassified from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.

(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.

(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.

Table 3.9: Australian Government general government sector cash receipts — 2016‑17
  Estimates     Change on Budget
  Budget
$m
MYEFO
$m
 
$m  

%  
Individuals and other withholding taxes          
Gross income tax withholding 187,600 184,500   ‑3,100 ‑1.7
Gross other individuals 43,900 44,900   1,000 2.3
less: Refunds 28,400 28,900   500 1.8
Total individuals and other withholding tax 203,100 200,500   ‑2,600 ‑1.3
Fringe benefits tax 5,090 4,700   ‑390 ‑7.7
Company tax 73,800 70,700   ‑3,100 ‑4.2
Superannuation fund taxes 10,530 9,080   ‑1,450 ‑13.8
Minerals resource rent tax(a) 0 0   0
Petroleum resource rent tax 1,450 1,050   -400 -27.6
Income taxation receipts 293,970 286,030   -7,940 -2.7
Goods and services tax 61,231 60,991   ‑239 ‑0.4
Wine equalisation tax 850 860   10 1.2
Luxury car tax 400 510   110 27.5
Excise and customs duty          
Petrol 6,250 6,400   150 2.4
Diesel 9,520 9,630   110 1.2
Other fuel products 2,840 2,430   ‑410 ‑14.4
Tobacco 10,180 9,700   ‑480 ‑4.7
Beer 2,500 2,330   ‑170 ‑6.8
Spirits 2,140 2,010   ‑130 ‑6.1
Other alcoholic beverages(b) 1,000 920   ‑80 ‑8.0
Other customs duty          
Textiles, clothing and footwear 290 300   10 3.4
Passenger motor vehicles 400 590   190 47.5
Other imports 1,010 1,140   130 12.9
less: Refunds and drawbacks 420 420   0 0.0
Total excise and customs duty 35,710 35,030   ‑680 ‑1.9
Carbon pricing mechanism 0 0   0
Agricultural levies 480 485   5 1.0
Other taxes(c) 3,781 5,219   1,438 38.0
Indirect taxation receipts 102,452 103,095   644 0.6
Taxation receipts 396,422 389,125   -7,296 -1.8
Sales of goods and services(c) 11,735 9,580   ‑2,154 ‑18.4
Interest received 3,537 4,007   470 13.3
Dividends 3,305 4,542   1,237 37.4
Other non-taxation receipts 7,463 8,074   611 8.2
Non-taxation receipts 26,040 26,202   163 0.6
Total receipts 422,461 415,327   ‑7,134 ‑1.7
Memorandum:          
Total excise(d) 25,880 21,530   -4,350 -16.8
Total customs duty(d) 9,830 13,500   3,670 37.3
Capital gains tax(e) 13,900 12,300   -1,600 -11.5
Medicare and DisabilityCare Australia levy 15,570 15,592   22 0.1

(a) The MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) Visa application charges have been reclassified from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.

(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.

(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.

Table 3.10 shows the Australian Government general government cash receipts from 2014‑15 to 2018‑19 by heads of revenue.

Table 3.10: Australian Government general government sector cash receipts
  Actual   Estimates   Projections
  2014‑15
$m
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
Individuals and other withholding taxes            
Gross income tax withholding 166,352   175,200 184,500   195,300 207,700
Gross other individuals 38,541   41,600 44,900   49,500 54,600
less: Refunds 27,033   27,500 28,900   30,700 32,650
Total individuals and other withholding tax 177,860   189,300 200,500   214,100 229,650
Fringe benefits tax 4,347   4,530 4,700   4,590 4,790
Company tax 66,174   67,100 70,700   76,600 82,700
Superannuation fund taxes 5,873   7,730 9,080   9,810 10,510
Minerals resource rent tax(a) 60   0 0   0 0
Petroleum resource rent tax 1,810   1,000 1,050   1,000 1,000
Income taxation receipts 256,125   269,660 286,030   306,100 328,650
Goods and services tax 54,542   57,614 60,991   63,970 66,961
Wine equalisation tax 792   840 860   890 920
Luxury car tax 520   520 510   520 530
Excise and customs duty              
Petrol 6,035   6,200 6,400   6,700 7,050
Diesel 8,908   9,320 9,630   9,980 10,480
Other fuel products 2,885   2,420 2,430   2,530 2,640
Tobacco 8,848   9,150 9,700   9,990 10,280
Beer 2,310   2,330 2,330   2,410 2,500
Spirits 1,996   1,970 2,010   2,070 2,140
Other alcoholic beverages(b) 899   910 920   950 980
Other customs duty              
Textiles, clothing and footwear 645   440 300   250 270
Passenger motor vehicles 732   550 590   540 600
Other imports 1,664   1,370 1,140   890 990
less: Refunds and drawbacks 356   420 420   420 420
Total excise and customs duty 34,568   34,240 35,030   35,890 37,510
Carbon pricing mechanism 1,627   0 0   0 0
Agricultural levies 515   475 485   493 498
Other taxes(c) 4,805   4,881 5,219   5,309 5,341
Indirect taxation receipts 97,369   98,570 103,095   107,072 111,760
Taxation receipts 353,494   368,230 389,125   413,172 440,410
Sales of goods and services(c) 7,103   7,870 9,580   12,471 16,248
Interest received 3,056   3,874 4,007   4,050 4,642
Dividends 4,745   4,516 4,542   3,232 3,859
Other non-taxation receipts 9,904   10,401 8,074   7,958 8,372
Non-taxation receipts 24,807   26,661 26,202   27,711 33,121
Total receipts 378,301   394,891 415,327   440,883 473,531
Memorandum:              
Total excise 23,663   21,330 21,530   22,380 23,450
Total customs duty 10,905   12,910 13,500   13,510 14,060
Capital gains tax(d) 8,400   10,600 12,300   14,300 16,100
Medicare and DisabilityCare Australia levy 14,640   15,014 15,592   16,260 17,038

(a) The MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) Visa application charges have been reclassified from non‑taxation receipts to taxation receipts to reflect a sustained change in the nature of receipts. The reclassification is reflected from 2015‑16 MYEFO, 2014‑15 Outcome and back casting occurs in Appendix D Historical Series from 2003‑04.

(d) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes. The 2014‑15 figure is an estimate.

Policy decisions

Policy decisions since the 2015‑16 Budget have reduced total receipts by $1.3 billion in 2015‑16 and reduced total receipts by $3.8 billion over the forward estimates period.

The reduction as a result of policy decisions primarily reflects reduced tariff receipts associated with the China‑Australia Free Trade Agreement. In the absence of this, total receipts would have increased by less than $300 million over the four years to 2018‑19 as a result of policy decisions.

Parameter and other variations

Parameter and other variations have reduced total receipts since the 2015‑16 Budget by $1.7 billion in 2015‑16 and $33.8 billion over the forward estimates period.

The 2015‑16 Budget made provisions for a number of measures that were still subject to finalisation at the time. Consistent with usual practice, the provision for the China‑Australia Free Trade Agreement, which was included in the 2014‑15 MYEFO and 2015‑16 Budget, has now been removed as this measure is included in the 2015‑16 MYEFO.

The 2015‑16 MYEFO includes new provisions for the Trans‑Pacific Partnership Agreement and the Environmental Goods Agreement. As is standard practice, measures will be published once the agreements have been formally signed.

The key economic parameters that influence tax receipts and tax revenue are shown in Table 3.11. The table shows effects on the Australian Government's main tax bases of the changed circumstances and outlook since the 2015‑16 Budget.

Table 3.11: Key economic parameters(a)
  Outcome   Estimates   Projections
  2014‑15
%
  2015‑16
%
2016‑17
%
  2017‑18
%
2018‑19
%
Revenue parameters at 2015‑16 MYEFO              
Nominal gross domestic product 1.6   2 3/4 4 1/2   5 5 1/4
Change since 2015‑16 Budget 0   - 1/2 -1   - 1/4 - 1/4
Compensation of employees(b) 2.4   4 3 3/4   4 1/4 4 1/2
Change since 2015‑16 Budget - 1/2   1/4 - 3/4   - 1/2 - 3/4
Corporate gross operating surplus(c) ‑2.7   0 5   6 3/4 6 1/4
Change since 2015‑16 Budget 0   ‑ 1/4 -2 1/2   1/4 1/2
Unincorporated business income 8.5   4 1/2 5 1/2   6 1/2 6 3/4
Change since 2015‑16 Budget 8 1/4   2 1/4 1 1/2   1 1/2 1
Property income(d) 5.4   0 6 1/4   4 1/2 4 3/4
Change since 2015‑16 Budget 1 1/4   -6 - 3/4   - 3/4 - 3/4
Consumption subject to GST 3.3   4 1/4 5 1/2   4 3/4 5
Change since 2015‑16 Budget 0   -1 0   - 3/4 - 1/2

(a) Current prices, per cent change on previous years. Changes since the 2015‑16 Budget are percentage points and may not reconcile due to rounding.

(b) Compensation of employees measures total remuneration earned by employees.

(c) Corporate gross operating surplus is an Australian National Accounts measure of company profits, gross of depreciation.

(d) Property income measures income derived from interest, rent and dividends.

Tax receipts have been revised down, consistent with downgrades to expected nominal GDP growth and softer equity markets since Budget. Further falls in commodity prices have led to downward revisions to company tax, while a weaker outlook for wages growth, stemming partly from lower projected population growth, has resulted in lower expected income tax from individuals. Weaker equity markets have resulted in downward revisions to capital gains, reducing expected tax receipts from superannuation, companies and individuals.

Excluding policy decisions, individuals and other withholding tax has been written down by $300 million (0.2 per cent) in 2015‑16 and $11.8 billion across the forward estimates, reflecting ongoing weakness in collections, a weaker outlook for wages growth and lower population growth.

Company tax receipts have been written down by $1.1 billion (1.6 per cent) in 2015‑16 and $12.1 billion over the forward estimates, mainly owing to weaker expected mining profitability associated with lower commodity prices. Superannuation fund taxes have been written down $1.4 billion (14.9 per cent) in 2015‑16 and $5.5 billion across the forward estimates, largely owing to weaker forecast capital gains tax and higher than expected losses relating to foreign exchange movements. Petroleum resource rent tax has also been written down by $1.7 billion over the forward estimates, consistent with a lower oil price assumption.

Excise and excise equivalent customs duty has been written down by $4.1 billion over the forward estimates, mainly reflecting lower tobacco and alcohol excise collections and weaker forecast consumption of these goods.

Analysis of the sensitivity of the receipts estimates to changes in the economic outlook is provided in Attachment A to this part.

Payment estimates

Since the 2015‑16 Budget, total cash payments for 2015‑16 have decreased by $1.5 billion. The overall net impact of payment related decisions (including the impact of Senate negotiations) have decreased total cash payments by $117 million over the four years to 2018‑19, with parameter and other variations decreasing payments by a further $13.2 billion.

Policy decisions

The impact of major policy decisions since the 2015‑16 Budget which increase payments include:

  • additional funding of $300 million in 2015‑16 ($1.1 billion over two years to 2016‑17) for the Roads to Recovery programme, which supports local governments across Australia to deliver vital services;
  • increasing Australia's existing humanitarian program to permanently resettle an additional 12,000 refugees who are fleeing the conflict in Syria and Iraq, which is expected to increase cash payments by $158 million in 2015‑16 ($909 million over four years to 2018‑19);
  • funding a number of new and amended listings on the Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme, which is expected to increase cash payments by $112 million in 2015‑16 ($621 million over four years to 2018‑19);
  • continuing to manage Illegal Maritime Arrivals, who are in Australia, while their immigration status is resolved, which is expected to increase cash payments by $403 million in 2016‑17 ($500 million over two years to 2017‑18); and
  • as part of the Government's National Innovation and Science Agenda, establishing an ongoing research infrastructure funding program to provide long‑term, sustainable funding for the National Collaborative Research Infrastructure Strategy, the Square Kilometre Array (SKA) Project and the Australian Synchrotron, which is expected to increase cash payments by $15 million in 2016‑17 ($459 million over three years to 2018‑19).

The impact of these policy decisions is broadly offset over the four years to 2018‑19 by a number of decisions that have reduced cash payments, including:

  • recovering money from a greater number of people where discrepancies have been identified between employment income declared to Centrelink and Pay As You Go (PAYG) information provided by employers to the Australian Taxation Office. This measure is expected to reduce cash payments by $152 million in 2016‑17 ($704 million over three years to 2018‑19);
  • removing bulk‑billing incentives for pathology services, aligning bulk‑billing incentives for diagnostic imaging services with those that apply to GP services and reducing the bulk‑billing incentive for magnetic resonance imaging (MRI) services. This measure is expected to reduce cash payments by $197 million in 2016‑17 ($639 million over four years to 2018‑19);
  • streamlining funding across a range of health workforce programs, which is expected to reduce cash payments by $178 million in 2015‑16 ($595 million over four years to 2018‑19);
  • refining the Aged Care Funding Instrument to better align the funding claimed by providers to the level of care provided, through changes to the scoring matrix. This measure is expected to reduce cash payments by $104 million in 2016‑17 ($472 million over three years to 2018‑19); and
  • changes to the child care system, including reducing the Child Care Subsidy for families who earn more than $250,000 per year, capping the number of places in the Interim Home Based Carer Subsidy programme and removing the Access to Affordability Support element under the Community Child Care Fund. This measure is expected to reduce cash payments by $15 million in 2015‑16 ($441 million over the four years to 2018‑19).
Parameter and other variations

Parameter and other variations since the 2015‑16 Budget have decreased payments by $2.7 billion in 2015‑16 and $13.2 billion over the four years to 2018‑19.

Major increases in cash payments in 2015‑16 and over the four years to 2018‑19 as a result of parameter and other variations since the 2015‑16 Budget include:

  • payments relating to public debt interest expenses, which are expected to increase by $168 million in 2015‑16 and by $2.7 billion over the four years to 2018‑19, reflecting increases in the financing requirement and an increase in the weighted average cost of borrowing. This is partially offset by an increase in interest receipts ($707 million over the four years to 2018‑19);
  • payments related to the Research and Development Tax Incentive, which are expected to increase by $206 million in 2015‑16 ($1.8 billion over the four years to 2018‑19), largely reflecting a higher than expected number and size of claims for the Research and Development refundable tax offset;
  • payments related to the Residential and Flexible Care programme, which are expected to increase by $162 million in 2015‑16 ($943 million over the four years to 2018‑19), largely reflecting a higher than expected growth in care subsidies provided to residential aged care facilities;
  • National Partnership Payments for housing services, which are expected to increase by $103 million in 2015‑16, largely reflecting early commencement and completion of new houses and refurbishments in Queensland and Western Australia; and
  • payments related to Illegal Maritime Arrivals (IMAs) management, which are expected to increase by $44 million in 2015‑16 ($588 million over the four years to 2018‑19), largely reflecting slower than forecast processing of onshore and offshore IMAs and updated estimates of the distribution of IMAs across the onshore detention network.

Major reductions in cash payments in 2015‑16 and over the four years to 2018‑19 as a result of parameter and other variations since the 2015‑16 Budget include:

  • payments related to the Financial Assistance Grants programme, which are expected to decrease by $1.1 billion in 2015‑16, as a result of payments being made earlier in 2014‑15 to help fund the additional expenditure associated with the Government's commitment of a further $1.1 billion over the next two years for the Roads to Recovery programme;
  • payments related to the Pharmaceuticals Benefit Scheme, which are expected to decrease by $549 million in 2015‑16 ($1.6 billion over four years to 2018‑19), largely reflecting higher than expected savings from existing pricing policies;
  • payments related to the Child Care Benefit, Child Care Rebate and Child Care Subsidy, which are expected to decrease by $235 million in 2015‑16 ($591 million over four years to 2018‑19), largely reflecting a higher than expected proportion of child care fee assistance payments being made in arrears;
  • payments related to Income Support for People with Disability, which are expected to decrease by $201 million in 2015‑16 ($756 million over four years to 2018‑19), largely reflecting slower than expected growth in the number of recipients and changes in the medium‑term population projections (refer to Box A for further information); and
  • payments related to the Income Support for Carers programme, which are expected to decrease by $192 million in 2015‑16 ($1.2 billion over the four years to 2018‑19), largely due to slower than expected growth in the number of Carer Payment recipients and changes in the medium‑term population projections (refer to Box A for further information).

Consistent with previous budgets, the underlying cash balance has been improved by the regular draw down of the conservative bias allowance. Details of this draw down are provided at Attachment C.

Analysis of the sensitivity of the payments estimates to changes in the economic outlook is provided in Attachment A to this part.

Fiscal balance estimates

Compared with the 2015‑16 Budget, the fiscal balance is expected to be $2.8 billion lower for 2015‑16.

Table 3.12 provides a reconciliation of fiscal balance estimates, including the impact of policy decisions and parameter and other variations on revenue, expense and net capital investment.

Table 3.12: Reconciliation of general government sector fiscal balance estimates
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
2015‑16 Budget fiscal balance ‑32,972 ‑23,425   ‑9,236 ‑3,230   ‑68,863
Per cent of GDP ‑2.0 ‑1.3   ‑0.5 ‑0.2    
Changes from 2015‑16 Budget to 2015‑16 MYEFO              
Effect of policy decisions(a)(b)              
Revenue ‑991 ‑492   ‑860 ‑696   ‑3,038
Expenses 829 1,015   ‑2,356 ‑2,114   ‑2,627
Net capital investment 128 46   ‑56 ‑75   43
Total policy decisions impact on fiscal balance ‑1,948 ‑1,552   1,552 1,494   ‑454
Effect of parameter and other variations(b)              
Revenue ‑3,407 ‑9,735   ‑12,737 ‑13,499   ‑39,377
Expenses ‑3,064 ‑2,462   ‑3,567 ‑5,944   ‑15,037
Net capital investment 502 501   560 918   2,482
Total parameter and other variations impact on fiscal balance ‑845 ‑7,773   ‑9,731 ‑8,473   ‑26,822
2015‑16 MYEFO fiscal balance ‑35,765 ‑32,751   ‑17,415 ‑10,209   ‑96,139
Per cent of GDP ‑2.2 ‑1.9   ‑1.0 ‑0.5    

(a) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.

(b) A positive number for revenue indicates an increase in the fiscal balance, while a positive number for expenses and net capital investment indicates a decrease in the fiscal balance.

Revenue estimates

Total revenue has been revised down by $4.4 billion in 2015‑16 since the 2015‑16 Budget.

While changes in tax revenue are generally driven by the same factors as tax receipts, there are differences as not all revenue raised in a given year is actually paid in that year. These differences exist for most revenue heads, and vary across years.

Detailed Australian Government general government sector revenue estimates for 2015‑16 and 2016‑17, compared with estimates from the 2015‑16 Budget, are provided in Tables 3.13 and 3.14 respectively.

Table 3.13: Reconciliation of the 2015‑16 general government sector (accrual) revenue
  Estimates   Change on Budget
  Budget
$m
MYEFO
$m
 
$m

%  
Individuals and other withholding taxes          
Gross income tax withholding 178,460 176,550   ‑1,910 ‑1.1
Gross other individuals 43,800 44,310   510 1.2
less: Refunds 28,000 27,500   ‑500 ‑1.8
Total individuals and other withholding tax 194,260 193,360   ‑900 ‑0.5
Fringe benefits tax 5,020 4,610   ‑410 ‑8.2
Company tax 69,800 67,996   ‑1,804 ‑2.6
Superannuation fund taxes 9,180 7,780   ‑1,400 ‑15.3
Minerals resource rent tax(a) 0 0   0 0.0
Petroleum resource rent tax 1,420 960   ‑460 ‑32.4
Income taxation revenue 279,680 274,706   ‑4,974 ‑1.8
Goods and services tax 60,330 59,790   ‑540 ‑0.9
Wine equalisation tax 840 850   10 1.2
Luxury car tax 450 520   70 15.6
Excise and customs duty          
Petrol 6,130 6,220   90 1.5
Diesel 9,140 9,350   210 2.3
Other fuel products 2,850 2,423   ‑427 ‑15.0
Tobacco 9,390 9,150   ‑240 ‑2.6
Beer 2,400 2,340   ‑60 ‑2.5
Spirits 2,030 1,970   ‑60 ‑3.0
Other alcoholic beverages(b) 960 910   ‑50 ‑5.2
Other customs duty          
Textiles, clothing and footwear 380 440   60 15.8
Passenger motor vehicles 420 550   130 31.0
Other imports 1,120 1,370   250 22.3
less: Refunds and drawbacks 420 420   0 0.0
Total excise and customs duty 34,400 34,303   ‑97 ‑0.3
Carbon pricing mechanism 0 0   0 0.0
Agricultural levies 472 475   3 0.6
Other taxes(c) 3,902 5,279   1,377 35.3
Indirect taxation revenue 100,394 101,217   823 0.8
Taxation revenue 380,074 375,923   ‑4,151 ‑1.1
Sales of goods and services(c) 9,542 7,956   ‑1,586 ‑16.6
Interest 4,083 4,519   436 10.7
Dividends 3,143 3,841   698 22.2
Other non-taxation revenue 8,508 8,714   206 2.4
Non-taxation revenue 25,276 25,030   ‑246 ‑1.0
Total revenue 405,350 400,953   ‑4,397 ‑1.1
Memorandum:          
Total excise(d) 24,920 21,393   -3,527 -14.2
Total customs duty(d) 9,480 12,910   3,430 36.2
Capital gains tax(e) 11,500 10,600   -900 -7.8
Medicare and DisabilityCare Australia levy 14,870 15,014   144 1.0

(a) The MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) Visa application charges have been reclassified from non‑taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.

(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.

(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.

Table 3.14: Reconciliation of the 2016‑17 general government sector (accrual) revenue
  Estimates   Change on Budget
  Budget
$m
MYEFO
$m
 
$m

%  
Individuals and other withholding taxes          
Gross income tax withholding 189,130 185,950   ‑3,180 ‑1.7
Gross other individuals 47,230 47,740   510 1.1
less: Refunds 28,400 28,900   500 1.8
Total individuals and other withholding tax 207,960 204,790   ‑3,170 ‑1.5
Fringe benefits tax 5,230 4,780   ‑450 ‑8.6
Company tax 75,500 71,600   ‑3,900 ‑5.2
Superannuation fund taxes 10,670 9,150   ‑1,520 ‑14.2
Minerals resource rent tax(a) 0 0   0 0.0
Petroleum resource rent tax 1,450 1,070   ‑380 ‑26.2
Income taxation revenue 300,810 291,390   ‑9,420 ‑3.1
Goods and services tax 64,130 63,700   ‑430 ‑0.7
Wine equalisation tax 870 860   ‑10 ‑1.1
Luxury car tax 410 510   100 24.4
Excise and customs duty          
Petrol 6,250 6,400   150 2.4
Diesel 9,530 9,640   110 1.2
Other fuel products 2,890 2,440   ‑450 ‑15.6
Tobacco 10,180 9,700   ‑480 ‑4.7
Beer 2,500 2,330   ‑170 ‑6.8
Spirits 2,140 2,010   ‑130 ‑6.1
Other alcoholic beverages(b) 1,000 920   ‑80 ‑8.0
Other customs duty          
Textiles, clothing and footwear 290 300   10 3.4
Passenger motor vehicles 400 590   190 47.5
Other imports 1,010 1,140   130 12.9
less: Refunds and drawbacks 420 420   0 0.0
Total excise and customs duty 35,770 35,050   ‑720 ‑2.0
Carbon pricing mechanism 0 0   0 0
Agricultural levies 480 485   5 1.0
Other taxes(c) 4,148 5,547   1,399 33.7
Indirect taxation revenue 105,807 106,151   344 0.3
Taxation revenue 406,617 397,541   ‑9,076 ‑2.2
Sales of goods and services(c) 11,791 9,641   ‑2,151 ‑18.2
Interest 4,680 4,938   258 5.5
Dividends 3,561 3,050   ‑511 ‑14.4
Other non-taxation revenue 6,777 8,030   1,253 18.5
Non-taxation revenue 26,810 25,659   ‑1,151 ‑4.3
Total revenue 433,427 423,200   ‑10,226 ‑2.4
Memorandum:          
Total excise(d) 25,940 21,550   -4,390 -16.9
Total customs duty(d) 9,830 13,500   3,670 37.3
Capital gains tax(e) 13,900 12,300   -1,600 -11.5
Medicare and DisabilityCare Australia levy 15,570 15,592   22 0.1

(a) The MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) Visa application charges have been reclassified from non‑taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The reclassification is reflected from 2015‑16 MYEFO and back casting occurs in Appendix D Historical Series from 2003‑04.

(d) The variation from Budget largely reflects a shift towards tobacco products being cleared through the customs system rather than the ATO.

(e) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes.

Table 3.15 shows the Australian Government general government (accrual) revenue from 2014‑15 to 2018‑19 by heads of revenue.

Table 3.15: Australian Government general government sector (accrual) revenue
  Actual   Estimates   Projections
  2014‑15
$m
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
Individuals and other withholding taxes              
Gross income tax withholding 167,645   176,550 185,950   196,870 209,390
Gross other individuals 40,565   44,310 47,740   52,580 58,010
less: Refunds 27,033   27,500 28,900   30,700 32,650
Total individuals and other withholding tax 181,177   193,360 204,790   218,750 234,750
Fringe benefits tax 4,393   4,610 4,780   4,670 4,870
Company tax 66,311   67,996 71,600   77,700 83,900
Superannuation fund taxes 5,890   7,780 9,150   9,880 10,580
Minerals resource rent tax(a) 63   0 0   0 0
Petroleum resource rent tax 1,319   960 1,070   960 990
Income taxation revenue 259,151   274,706 291,390   311,960 335,090
Goods and services tax 56,462   59,790 63,700   67,010 70,480
Wine equalisation tax 828   850 860   890 920
Luxury car tax 540   520 510   520 530
Excise and customs duty              
Petrol 6,042   6,220 6,400   6,710 7,060
Diesel 8,918   9,350 9,640   9,990 10,490
Other fuel products 2,887   2,423 2,440   2,560 2,670
Tobacco 8,826   9,150 9,700   9,990 10,280
Beer 2,312   2,340 2,330   2,410 2,500
Spirits 1,997   1,970 2,010   2,070 2,140
Other alcoholic beverages(b) 900   910 920   950 980
Other customs duty              
Textiles, clothing and footwear 645   440 300   260 270
Passenger motor vehicles 732   550 590   560 600
Other imports 1,665   1,370 1,140   930 990
less: Refunds and drawbacks 356   420 420   420 420
Total excise and customs duty 34,570   34,303 35,050   36,010 37,560
Carbon pricing mechanism 0   0 0   0 0
Agricultural levies 509   475 485   493 498
Other taxes(c) 5,114   5,279 5,547   5,638 5,725
Indirect taxation revenue 98,024   101,217 106,151   110,562 115,712
Taxation revenue 357,175   375,923 397,541   422,522 450,802
Sales of goods and services(c) 7,239   7,956 9,641   12,527 16,307
Interest 3,147   4,519 4,938   5,361 6,566
Dividends 6,178   3,841 3,050   3,702 4,030
Other non-taxation revenue 7,006   8,714 8,030   8,468 9,388
Non-taxation revenue 23,571   25,030 25,659   30,059 36,291
Total revenue 380,746   400,953 423,200   452,581 487,094
Memorandum:              
Total excise 23,687   21,393 21,550   22,430 23,500
Total customs duty 10,884   12,910 13,500   13,580 14,060
Capital gains tax(d) 8,400   10,600 12,300   14,300 16,100
Medicare and DisabilityCare Australia levy 14,640   15,014 15,592   16,260 17,038

(a) The MRRT applied until 30 September 2014.

(b) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(c) Visa application charges have been reclassified from non‑taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The reclassification is reflected from 2015‑16 MYEFO, 2014‑15 Outcome and back casting occurs in Appendix D Historical Series from 2003‑04.

(d) Capital gains tax is part of gross other individuals, company tax and superannuation fund taxes. The 2014‑15 figure is an estimate.

Expense and net capital investment estimates

Movements in accrual expenses and net capital investments over the forward estimates are broadly similar to the movements in cash payments. The key exceptions include:

  • an increase in the accrued superannuation expenses for 2015‑16 of $531 million for civilian superannuation schemes, mainly reflecting a change from budget for the actuarial discount rate. This movement has no impact on cash payments; and
  • the provision of Goods and Services Tax (GST) to the States and Territories, reflecting higher than estimated GST entitlements of $342 million for the 2014‑15 financial year. This amount was accrued in 2014‑15 and will be paid in 2015‑16.

Estimates of Australian Government general government sector expenses by function can be found in Attachment D.

Table 3.16 provides a reconciliation of expense estimates.

Table 3.16: Reconciliation of general government sector expense estimates
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
2015‑16 Budget expenses 434,469 452,654   471,816 499,428   1,858,366
Changes from 2015‑16 Budget to 2015‑16 MYEFO              
Effect of policy decisions(a) 829 1,015   ‑2,356 ‑2,114   ‑2,627
Effect of economic parameter variations              
Total economic parameter variations ‑372 ‑1,741   ‑2,484 ‑3,541   ‑8,137
Unemployment benefits -337 -647   -565 -705   -2,254
Prices and wages -348 -985   -1,243 -1,479   -4,055
Interest and exchange rates 112 121   135 174   542
GST payments to the States 200 -230   -810 -1,530   -2,370
Public debt interest 119 620   874 1,356   2,969
Program specific parameter variations 392 ‑445   296 ‑2,262   ‑2,018
Other variations ‑3,204 ‑896   ‑2,254 ‑1,498   ‑7,851
Total variations ‑2,235 ‑1,448   ‑5,923 ‑8,059   ‑17,664
2015‑16 MYEFO expenses 432,234 451,206   465,892 491,370   1,840,702

(a) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.

Table 3.17 provides a reconciliation of the net capital investment estimates.

Table 3.17: Reconciliation of general government sector net capital investment estimates
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
2015‑16 Budget net capital investment 3,854 4,198   3,598 5,090   16,740
Changes from 2015‑16 Budget to 2015‑16 MYEFO              
Effect of policy decisions(a) 128 46   ‑56 ‑75   43
Effect of parameter and other variations 502 501   560 918   2,482
Total variations 630 547   505 843   2,525
2015‑16 MYEFO net capital investment 4,484 4,745   4,103 5,933   19,265

(a) Excludes secondary impacts on public debt interest of policy decisions and offsets from the Contingency Reserve for decisions taken.

Headline cash balance

The headline cash balance consists of the underlying cash balance, net cash flows from investments in financial assets for policy purposes (for example, the equity funding of NBN Co) and net Future Fund earnings.

Table 3.18 provides further detail between the underlying and headline cash balance estimates of the Australian Government general government sector.

Table 3.18: Reconciliation of general government sector underlying and headline cash balance estimates
  Estimates   Projections    
  2015‑16
$m
2016‑17
$m
  2017‑18
$m
2018‑19
$m
  Total
$m
2015‑16 MYEFO underlying cash balance(a) ‑37,399 ‑33,667   ‑23,021 ‑14,229   ‑108,317
plus Net cash flows from investments in financial assets for policy purposes              
Student loans ‑7,926 ‑9,382   ‑11,100 ‑12,115   ‑40,524
NBN investment ‑7,838 ‑8,475   0 0   ‑16,313
Residential mortgage backed securities 2,195 1,919   147 0   4,261
WestConnex ‑28 ‑647   ‑732 ‑546   ‑1,954
Trade support loans ‑460 ‑511   ‑563 ‑569   ‑2,102
Asbestos removal in the ACT - Mr Fluffy loose fill asbestos remediation ‑250 0   50 50   ‑150
Northern Australia Infrastructure Facility 0 ‑935   ‑870 ‑805   ‑2,610
Drought and rural assistance loans ‑63 ‑250   ‑250 ‑250   ‑813
Net other ‑356 ‑641   56 191   ‑751
Total net cash flows from investments in financial assets for policy purposes ‑14,727 ‑18,922   ‑13,262 ‑14,044   ‑60,955
plus Net Future Fund earnings 3,955 3,717   4,007 4,465   16,145
2015‑16 MYEFO headline cash balance ‑48,171 ‑48,872   ‑32,276 ‑23,808   ‑153,127

(a) Excludes expected net Future Fund earnings.

The headline cash balance for 2015‑16 is estimated to be a deficit of $48.2 billion (2.9 per cent of GDP), compared with a deficit of $44.8 billion at 2015‑16 Budget. Over the four years to 2018‑19, the headline cash deficit is projected to decline to $23.8 billion in 2018‑19. The deterioration in the headline cash balance has been primarily driven by the deterioration of the underlying cash balance.