5     General Government Revenue

Key Issues

·       Total General Government Sector revenue is estimated to be $6 406.7 million in 2019‑20, an increase of $189.4 million above the 2018-19 Budget estimate of $6 217.3 million.

·       Key components of General Government Sector revenue in 2019‑20 include:

-  GST Revenue, which is estimated to be $2 475.3 million, a decrease of $12.4 million below the 2018‑19 Budget of $2 487.7 million;

-  Australian Government Payments for Specific Purposes, which are estimated to be $1 448.3 million, an increase of $91.8 million above the 2018-19 Budget of $1 356.5 million; and

-  Taxation Revenue, which is estimated to be $1 215.5 million, an increase of $0.3 million above the 2018-19 Budget of $1 215.2 million.

·       Revenue estimates in the 2019-20 Budget and Forward Estimate include the impact of significant downward revisions in estimates for GST and Conveyance Duty receipts compared to those estimates included in the 2018-19 Budget Papers. The reduction in the period 2018-19 to 2021-22 is $280.3 million in GST receipts and $254.8 million in Conveyance Duty receipts. Early forecasts indicated that Conveyance Duty may decrease by as much as $280 million. However, the impact of more up‑to‑date data, together with the inclusion of proposed increases to the FIDS rates, has resulted in a forecast reduction in Conveyance Duty of $254.8 million.

·       Tasmania’s share of revenue from Grants, including GST and Australian Government Payments for Specific Purposes, equates to 62 per cent of Total General Government Sector revenue.

·       From 2019-20 National Partnership Payment revenue is reported in accordance with the new Australian Accounting Standard AASB 15 Revenue from Contracts with Customers. The 2018-19 Budget and Estimated Outcome are as reported in the 2018‑19 Budget, in accordance with reporting requirements at that time and are not directly comparable to the revenue in 2019-20. The impact of the new accounting standard is outlined in appendix 1.2 of chapter 1.


 

Total Revenue

This chapter provides an overview of Revenue for the 2019‑20 Budget and Forward Estimates including the 2018‑19 Estimated Outcome. Table 5.1 lists the major General Government Sector revenue sources.

Table 5.1:         General Government Sector Revenue

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

Revenue from transactions

 

 

 

 

 

 

Grants

3 893.9 

4 018.9 

3 973.3 

4 075.4 

4 220.2 

4 435.5 

Taxation

1 215.2 

1 195.2 

1 215.5 

1 251.6 

1 283.7 

1 315.6 

Sales of goods and services

417.6 

424.6 

416.0 

421.3 

427.4 

428.9 

Fines and regulatory fees

98.6 

98.6 

103.1 

104.3 

105.1 

106.2 

Interest income

17.8 

24.7 

16.8 

16.6 

18.0 

23.1 

Dividend, tax and rate equivalent income

409.7 

451.1 

524.1 

375.4 

365.8 

337.1 

Other revenue

164.6 

167.9 

157.9 

153.0 

149.8 

153.3 

 

6 217.3 

6 381.0 

6 406.7 

6 397.6 

6 570.0 

6 799.7 

 

 

 

 

 

 

 

 

In 2019-20, Total General Government Sector revenue is forecast to be $189.4 million higher than the 2018‑19 Budget.

Tasmania’s most significant source of funding is Grants revenue (including GST and Australian Government Grants), which comprises 62 per cent of total revenue in 2019-20. State Own‑Source Revenue accounts for 38 per cent of total revenue.

Chart 5.1 shows the composition of Total General Government Sector revenue over time.

Major revenue risks and sensitivities are discussed in chapter 1 of this Budget Paper. The major variances in revenue compared to the 2018-19 Budget are discussed in the Policy and Parameter Statement in chapter 4 of this Budget Paper.

Chart 5.1:         Composition of Total Revenue, 2009‑10 to 2022‑231

Title: Composition of Total Revenue, 2009-10 to 2022-23 - Description: The chart shows that GST Grants revenue continues to be the primary source of revenue across the 2019-20 Budget and Forward Estimates period.

Notes:

1.    Data reflects actual outcomes for 2009‑10 to 2017‑18 and the original Budget estimates for 2018‑19.

2.    Other Australian Government Grants includes Specific Purpose Payments and National Partnership Payments.

3.    Other includes: Sales of goods and services; Fines and regulatory fees; Interest income; Dividend, tax and rate equivalent income; and Other revenue.


 

Grants

Grants primarily reflect transfers of funding from the Australian Government and are estimated to be $3 973.3 million in 2019‑20. This is an increase of $79.4 million above the 2018‑19 Budget of $3 893.9 million.

Table 5.2:         Grants

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

General Purpose Payments (Untied Funding)

 

 

 

 

 

 

GST Revenue

2 487.7 

2 445.1 

2 475.3 

2 559.3 

2 697.2 

2 799.1 

 

 

 

 

 

 

 

Payments for Specific Purposes (Tied Funding)1

 

 

 

 

 

 

Specific Purpose Payments2

997.2 

1 004.1 

1 012.4 

1 028.2 

1 069.3 

1 121.9 

National Partnership Payments3

359.3 

513.1 

435.9 

449.4 

415.6 

482.6 

Total Payments for Specific Purposes

1 356.5 

1 517.2 

1 448.3 

1 477.5 

1 484.9 

1 604.5 

 

 

 

 

 

 

 

Other Grant and Subsidies4

49.7 

56.6 

49.7 

38.5 

38.2 

31.9 

Total Grants

3 893.9 

4 018.9 

3 973.3 

4 075.4 

4 220.2 

4 435.5 

 

 

 

 

 

 

 

Notes:

1.    Estimates of Specific Purpose Payments may differ from those published in the Australian Government 2019-20 Budget due to different assumptions around timing and activity levels.

2.    Specific Purpose Payments include National Health Reform; Quality Schools, Quality Outcomes; National Housing and Homelessness; National Skills and Workforce Development and National Disability Services funding arrangements.

3.    Estimates of National Partnership Payments may differ from those published in the Australian Government 2019-20 Budget due to the application of the new Australian Accounting Standard AASB 15 Revenue from Contracts with Customers.

4.    Other Grants and Subsidies primarily relate to payments to the State for Commonwealth Own Purpose Expenditure.

In accordance with the Intergovernmental Agreement on Federal Financial Relations, transfers from the Australian Government fall into two categories:

·       General Purpose Payments, which are ‘untied’ payments that can be used at the State’s discretion. The GST distribution is the only GPP received by Tasmania in 2019-20; and

·       conditional (tied) funding in the form of Payments for Specific Purposes, including Specific Purpose Payments and National Partnership Payments. These payments must only be spent for purposes as agreed with the Australian Government.

The Australian Government also provides payments directly to State agencies through Commonwealth Own Purpose Expenditure. Most of these payments will be made to the Department of Health and the Department of Communities Tasmania.

GST Revenue

GST Revenue is the largest single source of revenue for Tasmania representing 38.6 per cent of Total General Government Sector revenue in 2019‑20.

In accordance with the Intergovernmental Agreement on Federal Financial Relations, all GST Revenue collected by the Australian Government is distributed amongst the states and territories. Each jurisdiction’s GST entitlement is dependent on three factors: national GST collections; the state’s per capita relativity; and the state’s share of the national population.

The Commonwealth Grants Commission makes annual recommendations to the Australian Government Treasurer regarding each jurisdiction’s relativity.

Tasmania has been assessed as having a higher per capita GST need than all other jurisdictions, except the Northern Territory, and is a major beneficiary of the equalisation process, receiving $1.1 billion, or approximately 76 per cent, more GST revenue in 2019‑20 than its per capita share. This reflects the relatively higher cost of service provision in the State and the below average capacity to raise revenue. Tasmania has the second lowest assessed fiscal capacity and Western Australia has the strongest assessed fiscal capacity.

For the 2019‑20 Budget, Treasury has used its own financial model to forecast GST revenues, as was the case for the 2018‑19 Budget. The model incorporates the latest CGC assessments and recommended relativities, Australian Government forecasts of the GST pool and state and territory populations and own‑source revenue estimates.

In response to the Productivity Commission’s Final Report into Horizontal Fiscal Equalisation, the Australian Government has legislated new GST distribution arrangements that will be progressively implemented from 2021‑22. The new arrangements include a guarantee that each state and territory will be no worse off in total over the period from 2021‑22 to 2026‑27 than they would have been under the previous GST distribution arrangements.

Chart 5.2 below illustrates Tasmania’s relativities since the introduction of the GST. The chart shows Tasmania’s forecast relativities falling recently after rising rapidly until 2015-16, primarily as a result of the additional royalty revenue generated in Western Australia and the other mining states during the mining boom.


 

Chart 5.2:         Tasmanian GST Revenue Sharing Relativities, 2000‑01 to 2022‑231

Title: Tasmanian GST Revenue sharing relativities, 2000 01 to 2022-23 - Description: This chart illustrates Tasmania's relativities since the introduction of the GST. It shows Tasmania's forecast relativities moving closer to trend after rising rapidly until 2015-16.

Note:

1.   CGC calculation of relativities is prepared on a consistent basis, with healthcare grants (pre 2009‑10) treated by inclusion.

Tasmania’s GST relativity is currently forecast to remain relatively flat over the Forward Estimates period. Tasmania’s share of the GST pool has decreased slightly from approximately 3.7 per cent in 2018‑19 to 3.68 per cent in 2019‑20.

Table 5.3 shows GST Revenue estimates for the national pool and Tasmania.

Table 5.3:         Tasmanian GST Revenue Estimates

 

2019-20

2020-21

2021-22

2022-23

Forward

Forward

Forward

Budget

Estimate

Estimate

Estimate

 

National GST Collections ($m)

67 200

70 010

74 130

78 021

Tasmania's GST Share (%)1

3.68

3.66

3.64

3.59

Tasmania's GST Revenue ($m)1

2 475.3

2 559.3

2 697.2

2 799.1

 

 

 

 

 

Note:

1.    The 2019‑20 Budget is based on the actual relativity that will apply in 2019‑20 as recommended by the CGC.

GST payments to Tasmania are expected to be $2 475.3 million in 2019‑20, a reduction of $12.4 million compared to the 2018-19 Budget and $81.8 million compared to the 2019-20 forecast in the 2018-19 Budget. The primary driver of lower estimates of GST revenue to Tasmania in the 2019-20 Budget is a $10.9 billion reduction in the Australian Government’s forecasts of the GST pool over four years since the 2018‑19 Australian Government Budget. This reflects downwards revisions to forecasts of national growth in consumption and dwelling investments.

Chart 5.3 below illustrates the difference between the 2018‑19 and 2019-20 Budget estimates of GST revenue to Tasmania over the Forward Estimates. As noted in chapter 4 of this Budget Paper, GST revenue estimates for the period 2018‑19 (Estimated Outcome) to 2021‑22 have reduced by $280.3 million compared to the 2018‑19 Budget estimates.

Chart 5.3:         GST Revenue to Tasmania, 2009‑10 to 2022‑23

Title: GST Revenue to Tasmania, 2009-10 to 2022-23 - Description: This chart illustrates the difference between the 2018-19 and 2019-20 State Budget estimates of GST revenue to Tasmania over the Forward Estimates. It shows that a higher level of GST revenue was forecast in the 2018-19 Budget compared to the 2019-20 Budget.

Note:

1.   The 2019‑20 Budget includes the 2018‑19 Estimated Outcome for GST revenue.

 


 

Commonwealth Payments for Specific Purposes

Specific Purpose Payments and Reform Funding

SPPs are an ongoing funding arrangement between the Australian Government and the states for service delivery in a particular sector. These include the National Skills and Workforce Development SPP, the National Disability Services SPP, the National Housing and Homelessness Agreement, the National Health Reform Agreement and the National School Reform Agreement (Quality Schools, Quality Outcomes).

In 2019-20, Tasmania will receive an estimated $1 012.4 million in SPPs and reform funding. This is an increase of $15.2 million above the 2018-19 Budget estimate of $997.2 million. The growth in SPPs and reform funding primarily reflects an increase in National Health Reform and Quality Schools, Quality Outcomes funding. The National Disability Services SPP ceases on 30 June 2019 with the commencement of the full National Disability Insurance Scheme on 1 July 2019. 

It is noted that estimates of SPPs may differ from those published in the Australian Government 2019-20 Budget due to different assumptions around timing and activity levels.

National Partnership Payments

NPPs are provided to each state through National Partnership Agreements and Project Agreements. The agreements are usually time‑limited and aim to support the delivery of projects, facilitate reforms within the State or reward the State for delivering on national reforms.

As noted in chapter 1 of this Budget Paper, NPP revenue for the 2019‑20 Budget and Forward Estimates is reported in accordance with the new Australian Accounting Standard AASB 15 Revenue from Contracts with Customers. The 2018-19 Budget and Estimated Outcome are as reported in the 2018‑19 Budget, in accordance with reporting requirements at that time and are not directly comparable with revenue for 2019‑20.

In 2019-20, NPPs for Tasmania will be an estimated $435.9 million. This includes new funding for Project Marinus, the Urban Congestion Fund and Tranche 3 of irrigation funding under the Sustainable Rural Water Use and Infrastructure Program. It also recognises increased funding under the Natural Disaster Relief and Recovery Arrangements NPP in response to flood, fire and storm events.

Table 5.4 details the Payments for Specific Purposes for Tasmania in 2019-20 and the Forward Estimates period.


 

Table 5.4:         Commonwealth Payments for Specific Purposes1

 

2018-19

Budget

2018‑19

Estimated

Outcome

2019-20

Budget

2020-21
Forward

Estimate

2021-22
Forward

Estimate

2022-23
Forward

Estimate

 

$m

$m

$m

$m

$m

$m

Specific Purpose Payments1

Health

 

 

 

 

 

 

National Health Reform

428.4

424.6

447.3

433.9

452.9

482.4

Education

 

 

 

 

 

 

Quality Schools, Quality Outcomes ‑ Government Schools

196.0

198.7

207.7

217.2

226.7

235.9

Quality Schools, Quality Outcomes ‑

Non‑Government Schools

275.7

281.6

291.5

310.3

324.0

337.3

Total Education Payments

471.7

480.3

499.2

527.5

550.7

573.2

 

 

 

 

 

 

 

National Skills and Workforce Development

31.8

32.0

32.2

32.5

32.9

33.2

 

 

 

 

 

 

 

National Disability Services

33.5

34.0

....

....

....

....

 

 

 

 

 

 

 

National Housing and Homelessness

31.8

33.2

33.7

34.3

32.8

33.1

Total Specific Purpose Payments

997.2

1004.1

1012.4

1028.2

1069.3

1121.9

 

 

 

 

 

 

 

National Partnership Payments2

 

 

 

 

 

 

Health

 

 

 

 

 

 

Health and Hospitals Funds

 

 

 

 

 

 

Redevelopment of the Royal Hobart Hospital

17.5

17.5

54.7

....

....

....

Improving Health Services in Tasmania

 

 

 

 

 

 

Anticipatory Care Trials

1.0

1.0

0.6

....

....

....

Building capability and capacity of rural and regional services

1.4

1.4

1.5

0.2

....

....

Care for complex patients with multiple chronic needs

....

....

0.4

....

....

....

Improving the Management of Subacute Care

....

....

1.6

....

....

....

Outreach Support - Alcohol and Drug Services

0.3

0.3

0.3

....

....

....

Subacute capability building

2.4

2.4

2.7

....

....

....

Public dental services for adults

3.4

3.4

3.4

2.4

....

....

Essential vaccines

0.4

0.5

1.1

1.0

1.0

0.9

National Bowel Cancer Screening Program

....

0.3

0.3

0.3

0.3

0.3

Community Health, Hospitals and Infrastructure projects

....

9.4

7.4

9.0

9.0

5.0

Elective surgery

....

....

5.0

5.0

5.0

5.0

Other3

0.3

0.9

3.1

1.8

0.6

0.6

Total Health National Partnerships

26.7

37.0

81.9

19.7

15.9

11.9

Table 5.4:         Commonwealth Payments for Specific Purposes1 (continued)

 

2018-19

Budget

2018‑19

Estimated

Outcome

2019-20

Budget

2020-21
Forward

Estimate

2021-22
Forward

Estimate

2022-23
Forward

Estimate

$m

$m

$m

$m

$m

$m

Education

 

 

 

 

 

 

Universal access to early childhood education

6.5

9.3

13.3

11.3

....

....

National School Chaplaincy Program

....

2.2

2.2

2.2

2.2

....

National quality agenda for early childhood education and care

....

                                    ....

0.2

0.1

....

....

Other4

....

....

1.3

0.2

0.2

....

Total Education National Partnerships

6.5

11.5

17.0

13.8

2.4

....

 

 

 

 

 

 

 

Community Services (including Disability)

 

 

 

 

 

 

DisabilityCare Australia Fund

102.0

102.0

23.0

23.0

24.0

24.1

Transitioning Responsibilities for Aged Care and Disability Services

12.3

                                    12.3

....

....

....

....

Pay Equity for the Social and Community Services Sector

6.4

6.4

....

....

....

....

Other5

....

....

2.7

2.5

2.5

2.5

Total Community Services (including Disability) National Partnerships

120.7

120.7

25.7

25.5

26.5

26.6

 

 

 

 

 

 

 

Skills and Workforce Development

 

 

 

 

 

 

National Partnership for Skilling Australians Fund

....

6.1

6.1

6.9

6.0

7.7

Tasmanian Jobs and Investment Fund

....

1.1

1.1

....

....

....

Job Ready Generation Package - North-West Tasmania

....

3.2

1.1

1.1

1.1

....

Skills for Tasmania

....

....

2.3

4.6

4.6

4.7

Building Australia's Future Workforce

....

....

5.9

0.6

....

....

Total Skills and Workforce Development National Partnerships

....

10.4

16.5

13.1

11.7

12.4

 

 

 

 

 

 

 

Infrastructure

 

 

 

 

 

 

Land Transport Infrastructure Projects

 

 

 

 

 

 

Road Component

84.2

81.2

68.9

41.9

9.1

40.0

Bridgewater Bridge

5.0

....

6.0

30.0

50.0

150.0

Roads of Strategic Importance

10.0

5.0

13.0

52.0

70.0

70.0

Rail Component

13.2

13.2

15.0

15.0

45.0

53.0

Urban Congestion Fund

....

1.0

16.2

23.5

12.9

6.1

Black Spot Projects

1.6

1.7

4.0

2.8

2.8

2.8

Bridges Renewal program

0.5

7.0

4.2

1.6

2.2

1.7

Heavy Vehicle Safety & Productivity Program

....

0.6

4.7

2.0

2.2

....

Interstate Road Transport

0.4

....

....

....

....

....

Asset Recycling Fund ‑ New Investments

0.3

0.2

....

....

....

....

Table 5.4:         Commonwealth Payments for Specific Purposes1 (continued)

 

2018-19

Budget

2018‑19

Estimated

Outcome

2019-20

Budget

2020-21
Forward

Estimate

2021-22
Forward

Estimate

2022-23
Forward

Estimate

 

$m

$m

$m

$m

$m

$m

 

 

 

 

 

 

 

Launceston City Deal - Tamar River

....

....

8.8

8.8

10.3

14.2

Regional Tourism Infrastructure and Innovation Fund

....

....

0.3

....

....

....

Total Infrastructure National Partnerships

115.2

109.8

141.0

177.6

204.5

337.7

 

 

 

 

 

 

 

Environment

 

 

 

 

 

 

Sustainable Rural Water Use and Infrastructure Program

34.5

35.8

15.7

40.0

  55.0

....

Cradle Mountain Experience

2.0

....

5.0

17.0

8.0

....

Three Capes Track Stage 3

1.7

....

....

....

....

....

Management of the World Heritage Values of the Tasmanian Wilderness

....

5.1

5.1

5.1

  5.1

5.1

Managing Established Pest Animals and Weeds

0.1

0.2

....

....

....

....

Project Marinus

....

56.0

33.0

23.0

....

....

Pest and Disease Preparedness and Response

....

20.0

1.1

1.0

1.0

0.7

Total Environment National Partnerships

38.3

117.0

59.8

86.1

69.1

5.8

 

 

 

 

 

 

 

Other services

 

 

 

 

 

 

Financial assistance to local governments - Financial Assistance Grant program6

38.0

77.4

39.4

81.5

  84.8

88.2

Legal Assistance Services

5.9

5.9

5.9

....

....

....

Natural Disaster Relief and Recovery Arrangements

4.9

19.0

40.3

28.0

0.4

....

Community Legal Centres

1.6

1.6

1.6

....

....

....

Natural Disaster Resilience

1.3

....

2.0

....

....

....

Women’s Safety Package - Technology Trials

0.4

0.4

0.4

0.5

....

....

Small Business Regulatory Reform

....

2.0

3.1

3.3

....

....

Other7

....

0.3

1.1

0.3

0.4

....

Total Other Services

52.1

106.7

93.9

113.6

85.6

88.2

 

 

 

 

 

 

 

Total National Partnership Payments

359.3

513.1

435.9

449.4

415.6

482.6

 

 

 

 

 

 

 

TOTAL PAYMENTS FOR SPECIFIC PURPOSES

1 356.5 

1 517.2 

1 448.3 

1 477.5 

1 484.9 

1 604.5 

 

 

 

 

 

 

 

Notes:

1.    Estimates of Specific Purpose Payments may differ from those published in the Australian Government 2019-20 Budget due to different assumptions around timing and activity levels.

2.    Estimates of National Partnership Payments may differ from those published in the Australian Government 2019-20 Budget due to the application of the new Australian Accounting Standard AASB 15 Revenue from Contracts with Customers.

3.    Includes funding for OzFoodNet, Vaccine Preventable Diseases Surveillance Program, National Cancer System Digital Mammography, National Electronic Recording and Reporting of Controlled Drugs System, Encouraging More Clinical Trials, Mersey Services, Palliative Care and Expansion of Breastscreen Australia Program.

4.    Includes funding for Supporting Students with Disabilities, Improving Literacy and Numeracy and Independent Public Schools.

5.    Includes funding for Indigenous Housing, Home and Community Care for Veterans and the Municipal and Essential Services Transition Fund.

6.    The 2018-19 Estimated Outcome includes 50 per cent of the financial assistance to local governments for 2019-20 expected to be receipted in 2018‑19.

7.    Includes funding for the National Bushfire Mitigation Programme and the Provision of Fire Services.

State Taxation

In 2019‑20, State Taxation revenue is forecast to be $0.3 million higher than the 2018‑19 Budget. This flat growth is mainly due to a significant decrease in Conveyance Duty of $69.9 million or 22.8 per cent compared to the 2018‑19 Budget forecast for the same period, offset somewhat by increases in Payroll Tax, Land Tax and Motor Tax.

Over the period 2018-19 (Estimated Outcome) to 2021-22, early forecasts indicated that Conveyance Duty may decrease by as much as $280 million. However, the impact of more up‑to‑date data, together with the inclusion of proposed increases to the FIDS rates, has resulted in a forecast reduction in Conveyance Duty of $254.8 million.

The reductions in Conveyance Duty estimates have largely been driven by a reduction in residential property transactions this financial year which makes up a significant proportion of Conveyance Duty receipts. To date, this has been largely driven by a reduction in transaction volumes in the South of the State, with transaction volumes in the North remaining relatively stable. Further information is included in chapter 1, Risks and Sensitivities, around the risk of further downward revisions to Conveyance Duty in the event that transaction volumes and property prices decline from current levels.

Chart 5.4 shows the reduction in taxation forecasts over the 2019-20 Budget and Forward Estimates compared to the levels forecast in the 2018-19 Budget.

Chart 5.4:         State Taxation Revenue, 2011‑12 to 2022‑23

Title: State Taxation Revenue, 2011-12 to 2022-23 - Description: This chart shows that the 2019-20 Budget and Forward Estimates for State Taxation revenue are below the projections made in the 2018-19 Budget. 


 

Note:

1.    This includes the 2018-19 Estimated Outcome for State Taxation Revenue. The decrease in the 2018-19 Estimated Outcome compared to the 2018-19 Budget is mainly due to a decrease in Conveyance Duty. 

 

State Taxation revenue is forecast to grow by $100.1 million (or by a compound annual growth rate of 2.7 per cent) from 2019‑20 to 2022‑23, due mainly to growth in the tax bases for Payroll Tax, Land Tax and Motor Tax. The forecasts incorporate the Government’s commitment to increase the Foreign Investor Duty Surcharge from 1 January 2020. The Government has also committed to develop a land tax surcharge to apply to foreign ownership of residential and primary production land in 2019-20 following a review of the definition of foreign persons for these relevant measures. As the Foreign Investor land tax surcharge will not apply until 1 July 2020 it is not reflected in the 2019-20 Budget but will be reflected in future budgets.

In line with a national approach to tax wagering based on the point of consumption, Tasmania will also introduce a tax of up to 15 per cent on the net wagering revenue of betting companies offering services to Tasmania from 1 January 2020. The impact of this tax is not reflected in the 2019-20 Budget as changes will be required to the existing wagering levy arrangements as well as further consultation with key stakeholders.

Table 5.5 provides details of the components of the State Taxation estimates.

Table 5.5:         State Taxation

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

Payroll tax

354.2 

369.3 

379.4 

391.7 

404.7 

418.2 

 

 

 

 

 

 

 

Taxes on property

 

 

 

 

 

 

Land tax1

111.1 

113.3 

119.0 

123.3 

127.9 

132.6 

Fire service levies2

62.6 

62.6 

68.1 

70.6 

73.1 

75.7 

Government guarantee fees

15.5 

16.7 

16.6 

15.7 

16.9 

17.9 

Conveyance duty3

297.7 

245.8 

236.7 

245.0 

245.0 

245.0 

 

487.0 

438.5 

440.4 

454.6 

462.9 

471.2 

Taxes on provision of goods and services

 

 

 

 

 

 

Gambling taxes

 

 

 

 

 

 

Casino tax and licence fees

51.0 

51.8 

51.2 

50.7 

50.1 

49.6 

Lottery tax

30.7 

35.0 

35.6 

36.4 

37.2 

38.0 

Totalizator wagering levy

7.4 

7.5 

7.6 

7.8 

8.0 

8.2 

Insurance duty

94.3 

97.3 

99.6 

102.3 

105.5 

108.6 

 

183.5 

191.6 

194.1 

197.2 

200.8 

204.4 


 

Table 5.5:         State Taxation (continued)

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

Taxes on the use of goods and services

 

 

 

 

 

 

Vehicle registration fees

43.8 

43.8 

45.5 

47.4 

49.3 

51.2 

Motor vehicle fees and taxes

 

 

 

 

 

 

Motor vehicle duty

48.4 

49.4 

50.3 

51.3 

52.3 

53.2 

Motor tax

89.9 

94.1 

96.7 

100.0 

104.3 

107.8 

Motor vehicle fire levy

8.5 

8.5 

9.0 

9.5 

9.5 

9.5 

 

190.5 

195.7 

201.6 

208.1 

215.3 

221.8 

 

 

 

 

 

 

 

TOTAL STATE TAXATION

1 215.2 

1 195.2 

1 215.5 

1 251.6 

1 283.7 

1 315.6 

 

 

 

 

 

 

 

Notes:

1.    Land tax includes the Government’s extension to the land tax exemptions for both short-stay accommodation properties and newly built housing that are made available for long-term rental to 30 June 2023.

2.    Fire service levies are reported as a tax for the purposes of the Uniform Presentation Framework. However, all revenues go directly to the State Fire Commission.

3.    Conveyance duty includes the Government’s commitment to: increase the Foreign Investor Duty Surcharge for acquisitions by foreign persons of residential land, from three per cent to seven per cent, and of primary production land, from half a per cent to 1.5 per cent; and extend the eligible periods for both duty concessions for first home buyers of established homes and eligible pensioners that downsize their home, to 30 June 2020.

 

 

Tax Expenditure Statement

This statement provides an estimate of the revenue the Government has forgone, or the financial benefit obtained by taxpayers, through concessions, benefits and incentives that the Government provides through the tax system. Tax expenditures have been estimated for the main revenue lines of payroll tax, land tax and conveyance duty.

Methodology

Tax exemptions, rebates and concessions are measured based on the revenue foregone approach, where the value of the revenue that would have been received if the standard rate of tax had been applied is estimated.

The methodology does not allow for any behavioural changes that may result if an exemption, rebate or concession was removed. The approach also does not allow for potential tax rate changes that may result if a tax exemption, rebate or concession were removed.

Where thresholds are removed, the resulting measure of expenditure is labelled a tax free threshold in the table below. The tax expenditure, or revenue foregone, associated with providing tax free thresholds has been calculated for payroll tax.

All other expenditure measures included in Table 5.6 are measured as deviations from the current tax settings.

Table 5.6:         Estimated Major Tax Expenditures

 

2018-19

2019-20

 

$m

$m

Payroll Tax1

 

 

Tax-free threshold

138.4

166.3

Educational institutions exemption

12.2

13.2

Health care service provider exemptions

5.0

5.7

Employer payroll tax rebate for additional positions created

5.9

4.8

 

161.5

190.0

Land Tax2

 

 

Principal place of residence exemption

125.2

132.4

Primary production land exemption

95.6

88.7

Religious bodies, charitable institutions, or educational institutions exemption

6.5

7.0

Other3

4.4

3.3

 

231.7

231.4

 


 

Table 5.6:         Estimated Major Tax Expenditures (continued)

 

2018‑19

2019-20

 

$m

$m

Conveyance Duty4

 

 

Corporate reconstructions5

1.4

....

First home buyer duty concession6

6.7

5.4

Duty concession for pensioners downsizing7

1.9

1.2

Family farm transfers

2.3

2.1

Transfer of public road or park/garden to council

2.6

2.9

Relationship breakdown or spouse and significant relationship transfers

13.7

8.5

Other8

4.2

3.4

 

32.8

23.5

 

 

 

TOTAL

426.0 

444.9 

 

 

 

Notes:

1.    The Payroll Tax base consists of all wages paid in Tasmania based on 2017-18 WorkCover data. For 2019-20, registered employers receiving the benefit of the tax-free threshold of $1.25 million have also been included in the calculation.

2.    The Land Tax base is all freehold land in Tasmania in 2018-19. Estimates are based on the expected growth in Land Tax revenue. Land classified as principal place of residence and primary production land is charged a nil rate of Land Tax. Property used for religious, charitable or educational purposes is exempt from Land Tax.

3.    Comprises land owned by the Australian Government, aged care providers and charitable organisations. In addition, the Government will be extending the land tax exemptions for both short‑stay accommodation properties and newly built housing that are made available for long-term rental, to 30 June 2023.     

4.    The Conveyance Duty tax base is comprised of concessional or exempt properties transferred in 2017-18. Estimates are based on the expected growth in Conveyance Duty revenue. Not all exempt transactions are recorded and not all valuation data is available, therefore the estimates are likely to be understated.

5.    A duty exemption for corporate reconstructions commenced on 6 December 2016. Prior to this date, corporations that met the relevant criteria were required to make an application to the Treasurer for ex gratia duty relief.    

6.    The Government will be extending the eligible period for duty concessions for first home buyers of established homes, to 30 June 2020.

7.    The Government will be extending the eligible period for duty concessions for eligible pensioners that downsize their home, to 30 June 2020. 

8.    Comprises transfers to a special trustee under section 37 of the Duties Act 2001 and instances where there is no change in beneficial ownership.

Other Revenue Sources

Sales of Goods and Services

Revenue from the Sales of Goods and Services is estimated to be $416 million in 2019-20, a decrease of $1.6 million below the 2018-19 Budget of $417.6 million.

Table 5.7 details the major components of revenue from the Sales of Goods and Services.

Table 5.7:         Sales of Goods and Services1

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

Departmental Fees and Recoveries

 

 

 

 

 

 

Communities Tasmania

53.7 

51.5 

51.2 

51.9 

55.7 

55.4 

Education

37.6 

39.9 

40.0 

40.2 

40.2 

40.2 

Finance-General

0.1 

0.1 

0.1 

0.1 

0.1 

0.1 

Health

208.1 

211.4 

203.4 

204.4 

205.3 

205.8 

Justice

4.0 

4.0 

4.1 

4.2 

4.3 

4.3 

Marine and Safety Tasmania

4.3 

4.6 

3.4 

5.5 

4.5 

3.6 

Office of the Governor

0.1 

0.1 

0.1 

0.1 

0.1 

0.1 

Police, Fire and Emergency Management

2.3 

4.3 

3.7 

3.8 

3.9 

4.0 

Premier and Cabinet

10.4 

10.7 

9.8 

9.6 

9.6 

9.2 

Primary Industries, Parks, Water and

Environment

49.8 

51.0 

53.4 

53.9 

55.2 

56.7 

State Fire Commission

6.1 

6.1 

6.2 

6.3 

6.4 

6.6 

State Growth

9.6 

9.6 

9.7 

9.8 

9.9 

10.0 

Tasmanian Audit Office

5.7 

5.7 

5.6 

5.7 

5.9 

6.1 

TasTAFE

24.2 

24.2 

23.7 

24.2 

24.7 

25.2 

 

415.9 

423.0 

414.3 

419.6 

425.7 

427.0 

 

 

 

 

 

 

 

Other Sales of Goods and Services

1.7 

1.7 

1.7 

1.7 

1.8 

1.9 

 

 

 

 

 

 

 

TOTAL SALES OF GOODS AND SERVICES

417.6 

424.6 

416.0 

421.3 

427.4 

428.9 

 

 

 

 

 

 

 

Note:

1.    The information provided in this section may differ from the Sales of Goods and Services for each agency in Government Services Budget Paper No 2 due to the elimination of inter-agency transactions during the consolidation process.


 

Fines and Regulatory Fees

Revenue from Fines and Regulatory Fees is estimated to be $103.1 million in 2019-20, an increase of $4.5 million above the 2018-19 Budget of $98.6 million. Table 5.8 details the major components of Fines and Regulatory Fees.

Table 5.8:         Fines and Regulatory Fees1

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

Fines2

23.7 

23.7 

23.7 

23.7 

23.8 

23.8 

 

 

 

 

 

 

 

Fees

 

 

 

 

 

 

Abalone Licences

6.1 

6.1 

6.2 

6.3 

6.4 

6.6 

Water Licence Fees

2.0 

2.0 

2.1 

2.1 

2.2 

2.2 

Environment Fees

4.1 

4.1 

4.1 

4.2 

4.2 

4.3 

Driver’s Licences

7.1 

7.1 

7.2 

7.3 

7.5 

7.7 

Photo Licence Fees

1.8 

1.8 

1.8 

1.8 

1.8 

1.9 

Vehicle Inspection Services Fees3

.... 

.... 

.... 

0.1 

0.1 

0.1 

Quarantine Fees4

1.3 

1.3 

4.0 

4.1 

4.1 

4.1 

Consumer Affairs Office Regulatory Fees

0.6 

0.6 

0.6 

0.6 

0.6 

0.6 

Magisterial Courts Regulatory Fees

0.7 

0.7 

0.7 

0.7 

0.7 

0.7 

Registrar-General Regulatory Fees

1.9 

1.9 

2.0 

2.0 

2.0 

2.0 

Supreme Court Regulatory Fees

1.2 

1.2 

1.2 

1.2 

1.2 

1.2 

Other Regulatory Fees5

48.0 

48.1 

49.5 

50.3 

50.5 

51.0 

 

74.9 

75.0 

79.4 

80.7 

81.3 

82.4 

 

 

 

 

 

 

 

TOTAL FINES AND REGULATORY FEES

98.6 

98.6 

103.1 

104.3 

105.1 

106.2 

 

 

 

 

 

 

 

Notes:

1.    The information provided in this section may differ from the Fines and Regulatory Fees for each agency in Government Services Budget Paper No 2 due to the elimination of inter-agency transactions during the consolidation process.

2.    Includes fines collected by the Department of Justice, Inland Fisheries Service and the Department of Police, Fire and Emergency Management.

3.    Vehicle Inspection Services Fees are estimated to be $49 000 in 2019-20, increasing to $50 000 in 2020-21, $51 000 in 2021-22 and $53 000 in 2022-23. The 2019‑20 Budget amount does not appear in the Table due to rounding.

4.    The increase in Quarantine Fees from 2019-20 reflects the implementation of the Government’s Biosecurity Tasmania Borders policy. Additional funding is fully committed to a range of biosecurity improvement initiatives.

5.    Other Regulatory Fees includes: Road Safety and Traffic Management; Consumer, Building and Occupational Services; the Community Support Levy; and various other fees collected by agencies, such as recreational fishing licence fees.

Interest Income

Interest Income is estimated to be $16.8 million in 2019-20, a decrease of $1 million compared to the 2018‑19 Budget estimate of $17.8 million. This reduction in interest income reflects a decrease in the anticipated level of cash held in the Public Account. 

Dividend, Tax and Rate Equivalent Income

Dividend, tax and rate equivalent income is estimated to be $524.1 million in 2019‑20, an increase of $114.4 million compared to the 2018‑19 Budget estimate of $409.7 million.

This increase for 2019‑20 largely reflects the payment of special dividends by the Motor Accidents Insurance Board and the Tasmanian Public Finance Corporation. It is also supported by increased dividends from Aurora Energy with a decrease in dividends and taxation equivalents from Tasmanian Networks offsetting the movement.

Chart 5.5:         Dividend, Tax and Rate Equivalent Income, 2011‑12 to 2022‑231

Title: Dividend, Tax and Rate Equivalent Income, 2011-12 to 2022-23 - Description: This chart shows that returns from Government businesses are expected to peak in 2019 20 followed by a decrease across the Forward Estimates period.

Note:

1.    Data is presented on an accrual basis and reflects actual outcome for 2011-12 to 2017-18 and the original Budget estimates for 2018-19.


 

Table 5.9:         Dividend, Tax and Rate Equivalent Income1

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

Dividends

 

 

 

 

 

 

Aurora Energy Pty Ltd2

16.4 

11.5 

27.0 

14.9 

14.9 

14.9 

Hydro Tasmania3

67.7 

80.0 

105.2 

75.0 

72.0 

70.0 

Motor Accidents Insurance Board4

50.1 

51.4 

43.8 

35.8 

33.9 

27.4 

Public Trustee5

.... 

.... 

.... 

.... 

.... 

.... 

Tasmanian Networks Pty Ltd6

35.9 

43.1 

14.9 

14.0 

20.2 

16.6 

Tasmanian Ports Corporation Pty Ltd7

5.6 

5.2 

9.4 

12.0 

14.4 

15.3 

Tasmanian Public Finance Corporation8

3.0 

2.2 

12.9 

10.3 

8.0 

5.7 

TT-Line Company Pty Ltd9

.... 

.... 

43.0 

26.4 

12.6 

.... 

 

178.8 

193.5 

256.2 

188.4 

176.0 

149.9 

Special Dividends

 

 

 

 

 

 

Motor Accidents Insurance Board

.... 

.... 

50.0 

.... 

.... 

.... 

Sustainable Timber Tasmania

15.0 

15.0 

.... 

.... 

.... 

.... 

Tasmanian Public Finance Corporation

.... 

.... 

39.5 

.... 

.... 

.... 

TT-Line Vessel Replacement Fund

40.0 

40.0 

.... 

.... 

.... 

.... 

 

55.0 

55.0 

89.5 

.... 

.... 

.... 

Mersey Community Hospital Dividend

 

 

 

 

 

 

Dividend for Mersey Community Hospital

80.9 

80.9 

83.7 

86.6 

89.7 

92.8 

 

80.9 

80.9 

83.7 

86.6 

89.7 

92.8 

Taxation Equivalents

 

 

 

 

 

 

Aurora Energy Pty Ltd2

7.9 

12.8 

7.1 

7.1 

7.2 

7.2 

Hydro Tasmania3

34.1 

48.0 

35.0 

35.0 

32.0 

22.6 

Motor Accidents Insurance Board

7.3 

3.6 

8.1 

9.9 

11.9 

12.8 

Public Trustee10

.... 

.... 

.... 

.... 

.... 

.... 

Tasmanian Networks Pty Ltd6

31.6 

31.5 

29.3 

32.9 

34.0 

37.6 

Tasmanian Ports Corporation Pty Ltd7

5.1 

4.8 

6.2 

7.3 

7.7 

6.0 

Tasmanian Public Finance Corporation

4.7 

5.5 

4.4 

3.4 

2.4 

3.3 

TT-Line Company Pty Ltd11

.... 

11.0 

.... 

.... 

.... 

.... 

 

90.7 

117.4 

90.2 

95.7 

95.4 

89.6 

Rates Equivalents

 

 

 

 

 

 

Hydro Tasmania

4.4 

4.4 

4.5 

4.6 

4.7 

4.8 

 

4.4 

4.4 

4.5 

4.6 

4.7 

4.8 

 

 

 

 

 

 

 

TOTAL DIVIDEND TAX AND RATE EQUIVALENT INCOME

409.7 

451.1 

524.1 

375.4 

365.8 

337.1 

 

 

 

 

 

 

 

 

Notes:

1.    All Dividend, Tax and Rate Equivalent Income is reported on an accrual basis for all years.

2.    The increase in dividends in 2019-20 for Aurora Energy reflects stronger than anticipated financial performance, including a timing difference in the recovery of Renewable Energy Certificate costs in 2018-19.

3.    The strong returns from Hydro Tasmania in 2019-20 are primarily due to a revised trading strategy in 2018-19 which increased hydro generation and led to higher revenues. The reduction in dividends over the Forward Estimates period largely reflects an expectation of less favourable trading conditions in the National Electricity Market.

4.    The Motor Accidents Insurance Board will move to a new dividend arrangement. The new dividend policy is not forecast to materially impact ordinary dividends over the Forward Estimates.  In implementing the new policy the Motor Accidents Insurance Board is forecast to pay a special dividend in 2019‑20.

5.    An amount of $20 000 is included in 2018‑19 for the Public Trustee Dividend.

6.    The decline in returns from Tasmanian Networks reflects the expected decrease in regulated revenue foreshadowed in the Australian Energy Regulator's draft transmission and distribution revenue determination for the period 2019-24.

7.    Tasmanian Ports Corporation has forecast an increase in dividends and taxation equivalents. This is due to a number of factors including improved trading conditions, cost savings from operational efficiencies and lower losses from the Bass Island Line subsidiary.

8.    From 2019-20, the cash lump sum dividend and tax payment by Tascorp, in each financial year, is based on its net profit before tax. 

9.    From 2019-20, TT-Line Company Pty Ltd will pay dividends linked to profits, consistent with the standard dividend policy for government businesses rather than a special dividend of a fixed amount. These dividends will continue to be separately accounted for in the vessel replacement fund and will be used to support the purchase of the new vessels.

10.  Income Tax Equivalents of $24 000 in 2019‑20, $44 000 in 2020‑21, $27 000 in 2021‑22 and $9 000 in 2022‑23 will be received from the Public Trustee. These amounts do not appear in the table due to rounding.

11.  Due to the application of a shipping tax exemption, TT‑Line Company Pty Ltd is not expecting to pay taxation equivalents over the Forward Estimates period. However, TT-Line Company Pty Ltd will incur some taxation equivalent expense in 2018‑19 due to the timing difference between exhausting income tax losses and commencement of the shipping tax exemption.

Other Revenue

Other Revenue is anticipated to be $157.9 million in 2019-20, a decrease of $6.7 million below the 2018‑19 Budget of $164.6 million.

Table 5.10 lists the sources of Other Revenue.

Table 5.10:       Other Revenue1

 

2018-19 

2018-19 

2019-20 

2020-21 

2021-22 

2022-23 

 

 

Estimated 

 

Forward 

Forward 

Forward 

 

Budget 

Outcome 

Budget 

Estimate 

Estimate 

Estimate 

 

$m 

$m 

$m 

$m 

$m 

$m 

 

 

 

 

 

 

 

Mineral Royalties

34.1 

34.1 

33.0 

28.0 

27.0 

27.0 

Regional Water Authority Licence Fees

2.3 

2.3 

2.3 

2.3 

2.3 

2.3 

Other Revenue by Agency

 

 

 

 

 

 

Communities Tasmania

24.8 

26.8 

26.9 

27.0 

24.7 

24.5 

Education

26.6 

20.7 

20.7 

20.7 

20.7 

20.5 

Finance-General

6.1 

9.0 

5.8 

4.5 

3.6 

3.6 

Health

18.7 

25.9 

22.7 

22.6 

23.5 

24.0 

Justice

26.4 

26.4 

24.1 

24.7 

25.4 

28.7 

Police, Fire and Emergency Management

11.4 

10.0 

10.3 

10.3 

10.3 

10.3 

Premier and Cabinet

3.6 

2.1 

1.6 

2.7 

2.2 

2.2 

Primary Industries, Parks, Water and Environment

2.6 

2.6 

2.4 

2.4 

2.4 

2.4 

State Fire Commission

1.5 

1.5 

1.6 

1.6 

1.6 

1.6 

State Growth

2.0 

2.0 

2.2 

2.0 

2.0 

2.0 

Treasury and Finance

1.9 

1.7 

1.4 

1.4 

1.4 

1.4 

Other

2.7 

2.7 

2.9 

2.8 

2.8 

2.8 

 

 

 

 

 

 

 

TOTAL OTHER REVENUE

164.6 

167.9 

157.9 

153.0 

149.8 

153.3 

 

 

Note:

1.    The information provided in this section may differ from the Other revenue for each agency in Government Services Budget Paper No 2 due to the elimination of inter-agency transactions during the consolidation process.