2018-19 Budget Paper 1 - Chapter 5 - General Government ... … · Web viewThis chapter provides...

5 GENERAL GOVERNMENT REVENUE

Key Issues

Total General Government Sector revenue is estimated to be $6 217.3 million in 2018-19, an increase of $343.3 million above the 2017-18 Budget estimate of $5 874 million.

Key components of General Government Sector revenue in 2018-19 include:– GST Revenue, which is estimated to be $2 487.7 million, an increase of

$100.3 million above the 2017-18 Budget of $2 387.4 million;– Australian Government Payments for Specific Purposes, which are estimated

to be $1 356.5 million, an increase of $104.9 million above the 2017-18 Budget of $1 251.6 million; and

– Taxation Revenue, which is estimated to be $1 215.2 million, an increase of $86.7 million above the 2017-18 Budget of $1 128.5 million.

Tasmania’s share of revenue from Grants, including GST and Australian Government Grants for Specific Purposes, equates to 62.6 per cent of total General Government Sector revenue.

General Government Revenue 71

TOTAL REVENUE This chapter provides an overview of Revenue for the 2018-19 Budget and Forward Estimates including the 2017-18 Estimated Outcome. Table 5.1 lists the major General Government Sector revenue sources.

Table 5.1: General Government Sector Revenue 2017-18 2017-18 2018-19 2019-20 2020-21 2021-22

Estimated Forward Forward Forward

Budget Outcome Budget Estimate Estimate Estimate $m $m $m $m $m $m

Revenue from transactionsGrants 3 682.9 3 802.0 3 893.9 3 911.9 4 009.4 4 187.2 Taxation 1 128.5 1 161.1 1 215.2 1 247.8 1 274.0 1 301.2 Sales of goods and services 408.0 406.4 417.6 422.6 429.3 435.7 Fines and regulatory fees 98.9 99.0 98.6 99.7 101.1 101.7 Interest income 19.6 22.4 17.8 13.3 12.1 12.5 Dividend, tax and rate equivalent income 358.4 376.5 409.7 391.6 369.9 368.9 Other revenue 177.7 168.4 164.6 162.3 157.3 149.2

5 874.0 6 035.8 6 217.3 6 249.2 6 353.1 6 556.5

In 2018-19, Total General Government Sector revenue is forecast to be $343.3 million higher than the 2017-18 Budget. Tasmania’s most significant source of funding is Grants revenue (including GST and Australian Government Grants), which comprises 62.6 per cent of total revenue in 2018-19. State Own-Source Revenue accounts for 37.4 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 2017-18 Budget are discussed in the Policy and Parameter Statement in chapter 4 of this Budget Paper.

72 General Government Revenue

Chart 5.1: Composition of Total Revenue, 2008-09 to 2021-221

Notes:1. Data reflects actual outcomes for 2008-09 to 2016-17 and the original Budget estimates for 2017-18.2. 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.


GRANTSGrants primarily reflect transfers of funding from the Australian Government and are estimated to be $3 893.9 million in 2018-19. This is an increase of $211 million above the 2017-18 Budget of $3 682.9 million.

Table 5.2: Grants

2017-18)

Budget

2017-18Estimate

dOutcome

2018-19)

Budget

2019-20ForwardEstimate



$m $m $m $m $m $mGeneral Purpose Payments (Untied

Funding) )

GST Revenue 2 387.4 2 424.8 2 487.7 2 557.1 2 650.5 2 761.9

Payments for Specific Purpose (Tied Funding)1 )

Specific Purpose Payments2 912.0 948.6 997.2 1 003.7 1 046.2 1 080.9 National Partnership Payments 339.6 383.9 359.3 307.0 270.4 300.4Total Payments for Specific

Purposes1 251.6 1 332.5 1 356.5 1 310.7 1 316.6 1 381.3

Other Grants and Subsidies3 43.9 44.7 49.7 44.1 42.3 44.0Total 3 682.9 3 802.0 3 893.9 3 911.9 4 009.4 4 187.2

Notes: 1. Estimates of Specific Purpose Payments and some National Partnership Payments may differ from

those published in the Australian Government 2018-19 Budget due to different assumptions around timing and activity levels.

2. Specific Purpose Payments include National Health Reform; Quality Schools, Quality Outcomes; and National Housing and Homelessness funding arrangements.

3. 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 2018-19; 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 RevenueGST Revenue is the largest single source of revenue for Tasmania representing 40 per cent of Total General Government Sector revenue in 2018-19. 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 state’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 77 per cent, more GST revenue in 2018-19 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.Further detail on the CGC’s methodology is provided in the Guide to the Budget (available on the Treasury website), HFE - An Equitable Approach to GST Distribution (available on the Treasury website) and the Report on GST Revenue Sharing Relativities - 2018 Update (2018 Update Report), which can be found on the CGC website at www.cgc.gov.au.For the 2018-19 Budget, Treasury has used its own financial model to forecast GST revenues, as was the case for the 2017-18 Budget. The model incorporates the latest CGC assessments and recommended relativities, Australian Government forecasts of the GST pool and state populations, and state and territory own-source revenue estimates. Chart 5.2 below illustrates Tasmania’s relativities since the introduction of the GST. The chart shows Tasmania’s forecast relativities returning to trend 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 2021-221

Note:1. CGC calculation of relativities is prepared on a consistent basis, with healthcare grants (pre 2009-10)

treated by inclusion.

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

Table 5.3: Tasmanian GST Revenue Estimates

2018-19 2019-20 2020-21 2021-22) Forward Forward Forward

Budget Estimate Estimate Estimate ) ) ) )

National GST Collections ($m) 67 320 69 790 73 510 77 270Tasmania’s GST Share (%)1 3.70 3.66 3.61 3.57Tasmania’s GST Revenue ($m)1 2 487.7 2 557.1 2 650.5 2 761.9 Note: 1. The 2018-19 Budget is based on the actual relativity that will apply in 2018-19 as recommended by

the CGC.

GST payments to Tasmania are expected to be $2 487.7 million in 2018-19. The growth in GST revenue over the Forward Estimates to Tasmania reflects GST pool growth, partially offset by a gradual reduction in Tasmania’s GST relativity and lower than national average population growth.


After rising during the mining boom, Tasmania’s GST relativity is forecast to continue to return towards the long-term trend over the Forward Estimates as a result of: Western Australia’s rising GST share, as the impact on the GST distribution of its

high mining royalties during the mining boom declines; Victoria’s need to invest in infrastructure arising from strong population growth,

which has significantly increased its GST share; and Tasmania’s slow population growth, compared to the national average, which

reduces the CGC’s assessment of Tasmania’s need to invest in infrastructure.Chart 5.3 below illustrates the difference between the 2017-18 and 2018-19 State Budget estimates of GST revenue to Tasmania over the Forward Estimates. The compound annual growth rate of GST revenue from 2018-19 to 2021-22 is 3.5 per cent. Tasmania’s share of the GST pool has decreased slightly from approximately 3.83 per cent in 2017-18 to 3.70 per cent in 2018-19.

Chart 5.3: GST Revenue to Tasmania, 2008-09 to 2021-22

Note:1. The 2018-19 Budget includes the 2017-18 Estimated Outcome for GST revenue.


Commonwealth Payments for Specific PurposesSpecific 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. There are currently two SPPs in operation: the National Skills and Workforce Development SPP; and the National Disability Services SPP. From 2018-19, the previous National Affordable Housing SPP will be combined with the new funding for homelessness under the National Housing and Homelessness Agreement.In 2018-19, Tasmania will receive an estimated $997.2 million in SPPs and reform funding. This is an increase of $85.2 million above the 2017-18 Budget estimate of $912 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 National Disability Insurance Full Scheme on 1 July 2019. It is noted that estimates of SPPs and some National Partnership Payments may differ from those published in the Australian Government 2018-19 Budget due to different assumptions around timing and activity levels.

National Partnership PaymentsNPPs 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.In 2018-19, Tasmania will receive an estimated $359.3 million of funding in NPPs, an increase of $19.7 million from the 2017-18 Budget of $339.6 million. This primarily reflects the reallocation of funds for the DisabilityCare Australia Fund from 2019-20 to 2018-19 and increased funding for the Sustainable Rural Water Use and Infrastructure Program. This increase is partially offset by a reduction in funding for roads infrastructure, funding under the Natural Disaster Relief and Recovery Arrangements NPP in response to the 2016 fire and flood events, and the 50 per cent advance payment to local governments receipted in 2017-18. Table 5.4 details the Payments for Specific Purposes that Tasmania will receive from the Australian Government in 2018-19 and over the Forward Estimates period.


Table 5.4: Commonwealth Payments for Specific Purposes1

2017-18)

Budget

2017-18Estimat

ed Outcom

e

2018-19

)Budget

2019-20

Forward

Estimate



$m $m $m $m $m $mSpecific Purpose Payments )

HealthNational Health Reform 379.7 403.7 428.4 446.1 464.2 482.8

Education )

Quality Schools, Quality Outcomes - Government Schools 185.8 187.6 196.0 204.0 212.6 219.0

Quality Schools, Quality Outcomes - Non-Government Schools 253.9 264.3 275.7 289.7 304.5 313.6

Total Education Specific Purpose Payments

439.7 451.9 471.7 493.7 517.1 532.6

National Skills and Workforce Development

31.4 31.7 31.8 31.9 32.0 32.4

)National Disability Services 32.4 32.6 33.5 .... .... ....

National Housing and Homelessness2 28.8 28.8 31.8 32.0 32.9 33.1Total Specific Purpose Payments 912.0 948.6 997.2 1 003.7 1 046.2 1 080.9

National Partnership PaymentsHealth

Health and Hospitals FundRedevelopment of the Royal Hobart

Hospital 15.0 18.0 17.5 10.0 .... ....

Improving Health Services in Tasmania Anticipatory Care Trials .... 1.4 1.0 .... .... ....Building capability and capacity of rural

and regional services.... 2.7 1.4 .... .... ....

John L Grove - LGH .... 1.0 .... .... .... ....Improving the Management of

Subacute Care.... 5.0 .... .... .... ....

Outreach Support - Alcohol and Drug Services

.... 0.9 0.3 .... .... ....

Reducing elective surgery waiting lists in Tasmania

.... 3.5 .... .... .... ....


Subacute capability building .... 5.0 2.4 .... .... ....Public dental services for adults 2.4 4.2 3.4 .... .... ....Essential vaccines 2.8 0.6 0.4 0.4 0.4 ....National Bowel Cancer Screening

Program0.2 0.2 .... .... .... ....

Other3 0.2 1.1 0.3 0.2 .... ....Total Health National Partnerships 20.6 43.5 26.7 10.6 0.4 ....


Table 5.4: Commonwealth Payments for Specific Purposes1 (continued)

2017-18

)Budget

2017-18Estimat

edOutcom

e

2018-19

)Budge

t

2019-20

Forward

Estimate

2020-21

Forward

Estimate

2021-22

Forward

Estimate

$m $m $m $m $m $mEducation

Universal access to early childhood education

6.1 8.9 6.5 .... .... ....

National School Chaplaincy Program 2.2 2.2 .... .... .... ....National quality agenda for early childhood

education and care0.3 0.3 .... .... .... ....

Online Safety program in schools 0.1 0.1 .... .... .... ....Total Education National Partnerships 8.7 11.5 6.5 .... .... ....

Community Services (including Disability) )

DisabilityCare Australia Fund4 4.2 .... 102.0 23.0 23.0 24.0Transitioning Responsibilities for Aged Care

and Disability Services 10.5 11.9 12.3 .... .... ....Pay Equity for the Social and Community

Services Sector 5.4 10.3 6.4 .... .... ....Total Community Services (including

Disability) National Partnerships 20.1 22.2 120.7 23.0 23.0 24.0

Affordable HousingHomelessness .... 2.8 .... .... .... ....

Total Affordable Housing National Partnerships

.... 2.8 .... .... .... ....

InfrastructureLand Transport Infrastructure Projects

Road Component5 102.3 101.1 84.2 94.1 74.8 60.0Rail Component 13.8 15.0 13.2 15.1 15.0 15.0Off-Network Projects - Road 39.6 .... .... .... .... ....Black Spot Projects 4.9 2.8 1.6 .... .... ....Bridges Renewal program 1.9 1.1 0.5 0.9 .... ....Heavy Vehicle Safety & Productivity

Program1.0 1.0 .... .... .... ....

Roads of Strategic Importance .... .... 10.0 20.0 20.0 50.0Bridgewater Bridge .... .... 5.0 25.0 30.0 40.0Interstate Road Transport 0.4 0.4 0.4 0.4 0.4 0.4Asset Recycling Fund - New Investments 2.4 1.5 0.3 .... .... ....


Launceston City Deal - Tamar River .... .... .... 8.8 8.8 10.3Developing demand driver infrastructure for

the tourism industry 1.6 0.8 .... .... .... ....Total Infrastructure National

Partnerships 167.7123.7

115.2 164.3 149.0 175.7

Table 5.4: Commonwealth Payments for Specific Purposes1 (continued)

2017-18)

Budget

2017-18Estimat

ed Outcom

e

2018-19)

Budget

2019-20Forwar

dEstimat

e

2020-21Forwar

dEstimat

e

2021-22Forwar

dEstimat

e$m $m $m $m $m $m

EnvironmentSustainable Rural Water Use and

Infrastructure Program 19.0 17.9 34.5 15.3 .... ....Cradle Mountain Experience .... .... 2.0 8.0 10.0 10.0Three Capes Track Stage 3 .... .... 1.7 .... .... ....Management of the World Heritage

Values of the Tasmanian Wilderness 1.7 1.7 .... .... .... ....Managing Established Pest Animals and

Weeds 0.10.1

0.1 .... .... ....Pest and Disease Preparedness and

Response ....20.0

.... .... .... ....Total Environment National

Partnerships 20.839.7

38.3 23.3 10.0 10.0

Other ServicesFinancial assistance to local

governments - Financial Assistance Grant program6 73.0 74.7 38.0 77.8 80.4 83.2

Legal Assistance Services 5.9 5.9 5.9 5.9 5.9 5.9Natural Disaster Relief and Recovery

Arrangements7 21.7 56.7 4.9 .... .... ....Community Legal Centres 1.1 1.5 1.6 1.6 1.6 1.6Natural Disaster Resilience .... 1.3 1.3 .... .... ....Women’s Safety Package - Technology

Trials .... 0.3 0.4 0.4 .... ....Total Other Services 101.6 140.4 52.1 85.8 88.0 90.8

Total National Partnership Payments 339.6 383.9 359.3 307.0 270.4 300.4

TOTAL PAYMENTS FOR SPECIFIC 1 251.6 1 332.5 1 356.5 1 310.7 1 316.6 1 381.3


PURPOSES

Notes:1. Estimates of Specific Purpose Payments and some National Partnership Payments may differ from

those published in the Australian Government 2018-19 Budget due to different assumptions around timing and activity levels.

2. From 1 July 2018, funding under National Housing and Homelessness Agreement will replace funding received under the National Affordable Housing Agreement and National Partnership Agreement on Homelessness.

3. Includes funding for OzFoodNet, Improving Health Services in Tasmania - Delivering connected care for complex patients with multiple chronic needs and Vaccine Preventable Diseases Surveillance Program.

4. Estimates of DisabilityCare Australia Fund payments included in the 2018-19 Budget and Forward Estimates reflect the most recent offer from the Australian Government.

5. Provision included in 2019-20 to 2021-22 for future road funding on the expiry of the current agreement.

6. In 2018-19, the reduction in financial assistance to local governments reflects a 50 per cent advance payment receipted in 2017-18. The 2017-18 estimated financial assistance to local governments was $73 million and approximately 50 per cent of this funding was paid as an advance payment to councils in June 2017 and therefore not included in the 2017-18 Estimated Outcome.

7. Includes $302 000 funding for 2018-19 under the Natural Disaster Relief - Fire agreement.


STATE TAXATION State Taxation revenue is the main source of own-source revenue and comprises 19.5 per cent of total revenue in 2018-19. In 2018-19, State Taxation revenue is forecast to be $86.7 million higher than the 2017-18 Budget, primarily due to increases in Conveyance Duty and Payroll Tax. The increase in Conveyance Duty is driven by growth in residential property prices and transaction volumes while the increase in Payroll Tax reflects stronger employment growth. State Taxation revenue is forecast to grow by $86 million (or by a compound annual growth rate of 2.3 per cent) from 2018-19 to 2021-22, due mainly to growth in the tax bases for Conveyance Duty and Payroll Tax. The forecasts incorporate a number of the Government’s taxation initiatives including the imposition of a Foreign Investor Duty Surcharge and reduced rate of payroll tax for payrolls between $1.25 million and $2 million.Table 5.5 provides details of the components of the State Taxation estimates. Definitions of the State taxes, including relevant legislation, can be found in the Glossary section of the Guide to the Budget.

Table 5.5: State Taxation 2017-18 2017-18 2018-19 2019-20 2020-21 2021-22



Payroll tax1 338.7 353.2 354.2 363.7 373.9 384.3

Taxes on propertyLand tax2 105.2 105.8 111.1 114.9 118.7 122.2 Fire service levies3 60.3 60.3 62.6 65.1 67.6 70.1 Government Guarantee Fees 16.9 17.5 15.5 15.1 13.5 12.6 Conveyance duty4 246.8 258.4 297.7 306.6 309.8 313.2

429.2 441.9 487.0 501.7 509.6 518.1 Taxes on provision of goods and services

Gambling taxesCasino tax and licence fees 54.9 51.2 51.0 50.9 50.8 50.6 Lottery tax 30.4 30.4 30.7 31.0 31.4 31.7 Totalizer wagering levy 7.3 7.3 7.4 7.6 7.8 8.0

Insurance duty 87.3 91.8 94.3 96.8 99.3 102.0 179.9 180.7 183.5 186.3 189.3 192.3


Table 5.5: State Taxation (continued)2017-18 2017-18 2018-19 2019-20 2020-21 2021-22



Taxes on the use of goods and services

Vehicle registration fees 42.1 42.1 43.8 45.5 47.4 49.3 Motor vehicle fees and taxes

Motor vehicle duty 42.9 47.5 48.4 49.3 50.3 51.2 Motor tax 87.7 87.7 89.9 92.2 94.5 97.0 Motor vehicle fire levy 8.0 8.0 8.5 9.0 9.0 9.0

180.7 185.3 190.5 196.0 201.2 206.5

TOTAL STATE TAXATION 1 128.5 1 161.1 1 215.2 1 247.8 1 274.0 1 301.2

Notes:1. Payroll tax includes the Government’s commitment to introduce a reduced rate of payroll tax (from

6.1 to 4 per cent) for payrolls between $1.25 million and $2 million. 2. Land tax includes the Government’s commitment to: provide a three year land tax exemption for all

newly built housing that is made available for long-term rental; and a one year land tax exemption for short-stay accommodation properties that are made available for long-term rental accommodation within the Greater Hobart Area.

3. 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.

4. Conveyance duty includes the Government’s commitment to: implement a Foreign Investor Duty Surcharge of an additional three per cent of the dutiable value for all purchases of residential property by foreign persons and an additional half per cent of the dutiable value for all purchases of primary production land by foreign persons; provide a 50 per cent duty concession to first home buyers of established homes with a dutiable value not exceeding $400 000, for a twelve month period; and provide a 50 per cent duty concession to eligible pensioners that sell their existing home and downsize to a new home or unit at a lower cost, for a twelve month period.


Chart 5.4 shows that the 2018-19 Budget and Forward Estimates have increased compared to the levels forecast in the 2017-18 Budget. This increase has been largely driven by Conveyance Duty due to growth in residential property prices and transaction volumes.

Chart 5.4: State Taxation Revenue, 2010-11 to 2021-22

Note:1. This includes the 2017-18 Estimated Outcome for State Taxation Revenue. The increase in the 2017-

18 Estimated Outcome compared to the 2017-18 Budget is mainly due to higher than expected revenue from Payroll Tax and Conveyance Duty.


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.

MethodologyTax 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 Expenditures2017-18 2018-19

$m $m

Payroll Tax1

Tax-free threshold 191.9 138.4Educational institutions exemption 15.3 12.2Health care service provider exemptions 4.7 5.0Employer payroll tax rebate for additional positions created 4.2 5.9

216.1 161.5

Land Tax2

Principal place of residence exemption 116.9 125.2Primary production land exemption 95.4 95.6Religious bodies, charitable institutions, or educational institutions

exemption 6.6 6.5Other3 3.8 4.4

222.7 231.7


Table 5.6: Estimated Major Tax Expenditures (continued)2017-18 2018-19

$m $mConveyance Duty4

Corporate reconstructions5 .... 1.4First home buyer duty concession6 .... 6.7Duty concession for pensioners7 .... 1.9Ex gratia relief provided for corporate reconstructions5 0.7 ....Family farm transfers 2.3 2.3Transfer of public road or park/garden to council 2.4 2.6Relationship breakdown or spouse and significant relationship transfers 13.2 13.7Other8 3.4 4.2

22.0 32.8

TOTAL 460.8 426.0

Notes:1. The Payroll Tax base consists of all wages paid in Tasmania based on 2016-17 Work Cover data. The

reduction in the estimate from 2017-18 to 2018-19 is due to the Government’s commitment to introduce a reduced rate of payroll tax (from 6.1 to 4 per cent) for payrolls between $1.25 million and $2 million.

2. The Land Tax base is all freehold land in Tasmania in 2017-18. 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 has committed to provide a three year land tax exemption for all newly built housing that is made available for long-term rental and a one year land tax exemption for short-stay accommodation properties that are made available for long-term rental accommodation within the Greater Hobart Area.

4. The Conveyance Duty tax base is comprised of concessional or exempt properties transferred in 2016-17. 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 has committed to provide a 50 per cent duty discount to first home buyers of established homes with a value of up to $400 000, for a twelve month period.

7. The Government has committed to provide a 50 per cent discount on duty for eligible pensioners that sell their existing home and downsize to a new home or unit at a lower cost, for a twelve month period.

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 $417.6 million in 2018-19, an increase of $9.6 million above the 2017-18 Budget of $408 million.Table 5.7 details the major components of revenue from the Sales of Goods and Services.

Table 5.7: Sales of Goods and Services12017-18 2018-19 2019-20 2020-21 2021-22

Forward Forward Forward Budget Budget Estimate Estimate Estimate

$m $m $m $m $m

Departmental Fees and Recoveries

Communities Tasmania 56.1 53.7 54.3 55.0 59.0 Education 37.3 37.6 38.3 38.9 39.5 Finance-General 0.1 0.1 0.1 0.1 0.1 Health 200.3 208.1 211.0 212.0 212.8 Justice 3.9 4.0 4.1 4.2 4.2 Marine and Safety Tasmania 5.5 4.3 3.4 5.5 4.5 Office of the Governor 0.1 0.1 0.1 0.1 0.1 Police, Fire and Emergency Management 2.3 2.3 2.3 2.3 2.3 Premier and Cabinet 8.7 10.4 9.8 9.9 10.0 Primary Industries, Parks, Water and Environment 45.3 49.8 51.3 52.3 53.3 State Fire Commission 6.1 6.1 6.3 6.4 6.5 State Growth 9.5 9.6 9.7 9.8 9.9 Tasmanian Audit Office 5.7 5.7 5.7 5.7 5.8 TasTAFE 25.7 24.2 24.7 25.2 25.7

406.5 415.9 420.8 427.4 433.5

Other Sales of Goods and Services 1.5 1.7 1.8 2.1 2.2

TOTAL SALES OF GOODS ANDSERVICES 408.0 417.6 422.6 429.3 435.7

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 FeesRevenue from Fines and Regulatory Fees is estimated to be $98.6 million in 2018-19, a decrease of $300 000 below the 2017-18 Budget of $98.9 million. Table 5.8 details the major components of Fines and Regulatory Fees.

Table 5.8: Fines and Regulatory Fees12017-18 2017-18 2018-19 2019-20 2020-21 2021-22



Fines2 24.1 24.1 23.7 23.7 23.7 23.8

FeesAbalone Licences 5.9 6.5 6.1 6.2 6.3 6.4 Water Licence Fees 2.0 2.0 2.0 2.1 2.1 2.2 Environment Fees 4.7 4.7 4.1 4.2 4.2 4.3 Drivers Licences 7.0 7.0 7.1 7.2 7.3 7.5 Photo Licence Fees 1.7 1.7 1.8 1.8 1.8 1.9 Vehicle Inspection Services Fees3 .... .... .... .... 0.1 0.1 Quarantine Fees 1.2 1.3 1.3 1.3 1.4 1.4 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 1.9 2.0 2.0 2.0 Supreme Court Regulatory Fees 1.3 1.0 1.2 1.2 1.2 1.2 Other Regulatory Fees4 47.7 47.6 48.0 48.7 49.7 49.7

74.8 74.9 74.8 76.0 77.3 77.9

TOTAL FINES AND REGULATORYFEES 98.9 99.0 98.6 99.7 101.1 101.7

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 $48 000 in 2018-19, increasing to $49 000 in 2019-20, $50 000 in 2020-21 and $51 000 in 2021-22. This amount does not appear in the table until 2020-21 due to rounding.

4. Other Regulatory Fees includes: the Tasmanian Economic Regulator; 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 $17.8 million in 2018-19, a decrease of $1.8 million compared to the 2017-18 Budget estimate of $19.6 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 IncomeDividend, Tax and Rate Equivalent Income is estimated to be $409.7 million in 2018-19, an increase of $51.3 million compared to the 2017-18 Budget estimate of $358.4 million. This increase is largely driven by improved performance by Hydro Tasmania and other businesses leading to increased dividend and income tax equivalent income.

Chart 5.5: Dividend, Tax and Rate Equivalent Income, 2010-11 to 2021-221

Note:1. Data reflects actual outcome for 2010-11 to 2016-17 and the original Budget estimates for 2017-18.


Table 5.9: Dividend, Tax and Rate Equivalent Income12017-18 2017-18 2018-19 2019-20 2020-21 2021-22



DividendsAurora Energy Pty Ltd2 16.9 17.6 16.4 16.5 14.9 14.9 Hydro Tasmania3 .... .... 67.7 72.9 83.9 84.1 Motor Accidents Insurance Board4 56.9 56.3 50.1 42.1 36.6 34.7 Tasmanian Networks Pty Ltd5 73.5 77.6 35.9 24.3 33.3 31.5 Tasmanian Ports Corporation Pty Ltd6 3.7 2.8 5.6 8.9 9.9 10.8 Tasmanian Public Finance Corporation 4.0 0.8 3.0 0.3 1.0 0.7 The Public Trustee .... 0.1 .... .... .... ....

155.0 155.2 178.8 165.0 179.7 176.7

Special DividendsSustainable Timber Tasmania7 .... .... 15.0 .... .... .... TT-Line Vessel Replacement Fund8 40.0 40.0 40.0 40.0 .... ....

40.0 40.0 55.0 40.0 .... ....

Mersey Community Hospital Dividend

Tasmanian Public Finance Corporation 78.1 78.1 80.9 83.7 86.6 89.7

78.1 78.1 80.9 83.7 86.6 89.7

Taxation EquivalentsAurora Energy Pty Ltd2 9.2 7.8 7.9 7.1 7.1 7.2 Hydro Tasmania3 11.4 30.5 34.1 39.1 38.3 35.6 Motor Accidents Insurance Board9 17.7 9.3 7.3 7.3 8.7 10.5 Public Trustee 0.1 0.1 .... .... .... .... Tasmanian Networks Pty Ltd5 31.8 38.2 31.6 35.5 35.0 35.6 Tasmanian Ports Corporation Pty Ltd6 2.4 3.9 5.1 5.2 5.6 5.9 Tasmanian Public Finance Corporation 5.0 6.0 4.7 4.0 4.3 2.9 TT-Line Company Pty Ltd10 3.4 3.2 .... .... .... ....

81.0 98.9 90.7 98.3 98.9 97.8

Rates EquivalentsHydro Tasmania 4.3 4.3 4.4 4.5 4.6 4.7

4.3 4.3 4.4 4.5 4.6 4.7

TOTAL DIVIDEND TAX AND RATEEQUIVALENT INCOME 358.4 376.5 409.7 391.6 369.9 368.9


Notes:1. All Dividend, Tax and Rate Equivalent Income is reported on an accrual basis for all years. 2. Aurora Energy dividends and taxation equivalents decreased due to increased depreciation as a result

of revisions to the useful life of certain assets and the implementation of the Special Energy Bonus.3. The increase in returns for Hydro Tasmania reflects the improvement in the financial position of the

business following the recovery from the Energy Supply event of 2015-16, which continued to impact returns in 2017-18. Dividends from Hydro Tasmania are expected to return to a 90 per cent dividend pay-out ratio from 2018-19.

4. Dividends from the Motor Accidents Insurance Board are based on the average of the past five years earnings, with investment income returns expected to moderate over the Forward Estimates.

5. The decline in the Tasmanian Networks dividend in 2018-19 is the result of lower forecast regulated revenues due to a lower regulated rate of return. A combined transmission and distribution revenue reset will occur in 2019-20 which will impact returns from that date.

6. Tasmanian Ports Corporation dividends and income tax equivalents improve over the Forward Estimates period as freight volumes increase but are impacted in 2017-18 and 2018-19 by the costs of its subsidiary, Bass Island Line.

7. The special dividend of $15 million from Sustainable Timber Tasmania in 2018-19 represents the return of part of the proceeds from the plantation sale.

8. The Special Dividends from TT-Line Company Pty Ltd are contributions from the company to be deposited into the TT-Line Vessel Replacement Fund for the purpose of funding the replacement vessels.

9. The decrease in taxation equivalents from the Motor Accidents Insurance Board is due to an increase in forecast claims expense and a reassessment of the components of investment revenue.

10. Due to the application of a shipping tax exemption, TT-Line Company Pty Ltd is not expecting to pay taxation equivalents over the Budget and Forward Estimates period.


Other Revenue Other Revenue is anticipated to be $164.6 million in 2018-19, a decrease of $13.1 million below the 2017-18 Budget of $177.7 million.Table 5.10 lists the sources of Other Revenue.

Table 5.10: Other Revenue12017-18 2018-19 2019-20 2020-21 2021-22

Forward Forward Forward Budget Budget Estimate Estimate Estimate

$m $m $m $m $m

Mineral Royalties2 41.1 34.1 34.6 28.1 23.1 Regional Water Authority Licence Fees 2.3 2.3 2.3 2.3 2.3 Other Revenue by Agency

Communities Tasmania 24.8 24.8 24.8 25.1 22.7 Education 27.2 26.6 27.0 27.3 27.7 Finance-General3 10.2 6.1 3.9 4.5 3.6 Health 26.3 18.7 20.2 20.8 22.0 Justice 23.7 26.4 24.5 24.9 24.9 Police, Fire and Emergency Management 10.8 11.4 12.2 10.0 10.0 Premier and Cabinet 0.1 3.6 2.2 3.7 2.2 Primary Industries, Parks, Water and Environment 2.3 2.6 2.6 2.6 2.6 State Fire Commission 1.4 1.5 1.5 1.5 1.6 State Growth 3.2 2.0 2.2 2.0 2.0 Treasury and Finance 1.4 1.9 1.6 1.6 1.6 Other 2.7 2.7 2.8 2.9 2.9

TOTAL OTHER REVENUE 177.7 164.6 162.3 157.3 149.2

Notes: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.

2. The decrease in Mineral Royalties in 2018-19 reflects volatility in the iron ore price. 3. The decrease in 2018-19 primarily reflects revised cash flows associated with property insurance

claims related to the June 2016 flood event. At the time of publication, the total costs and expected recoveries relating to the May 2018 Hobart extreme weather event are still being assessed.


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