Archived News
December 2007
Revisions to Commonwealth Grant Estimates
The Commonwealth Government released its 2007‑08 Mid‑year Economic and Fiscal Outlook (MYEFO) on 15 October 2007, containing revised estimates of Commonwealth grants.
The table below shows revised national 2007–08 GST revenue collection estimates. MYEFO notes that the increase reflects continued strength in consumption.
Revised National GST Revenue Estimates
|
| |
2007-08
|
2008-09
|
2009-10
|
2010-11
|
| |
($m)
|
($m)
|
($m)
|
($m)
|
| National GST revenue grants – Cwlth Budget |
41,850
|
44,200
|
46,450
|
48,850
|
| National GST revenue grants – MYEFO |
42,250
|
45,270
|
47,670
|
50,130
|
| National GST revenue – difference |
+400
|
+1,070
|
+1,220
|
+1,280
|
The impact on Western Australia’s budget estimates will be around 10% of the above changes. The Commonwealth has indicated that it will adjust GST payments from February 2008 to reflect the higher estimates.
Benefits from Tax Reform
The MYEFO report includes revised estimates of States’ benefits from the GST reforms. However, as with previously published estimates, these gains are greatly overestimated. The table below shows Western Australia’s estimated net benefits from the GST reforms.
Impact of GST Tax Reform Commonwealth MYEFO
|
Western Australia
|
| |
2006-07
|
2007-08
|
2008-09
|
2009-10
|
2010-11
|
| |
($m)
|
($m)
|
($m)
|
($m)
|
($m)
|
Impact of GST reform published by
Commonwealth Treasurer(a) |
+322
|
+455
|
+600
|
+445
|
+462
|
Less adjustment for Commonwealth
changed assessment method(b)
|
-53
|
-63
|
-75
|
-86
|
-99
|
Less cost of abolishing stamp duties
subject to review under the IGA(c)
|
-137
|
-148
|
-244
|
-22
|
-136
|
Less NCP payments abolished(d)
|
-62
|
-64
|
-66
|
-69
|
-71
|
Full impact of GST tax reform
|
+70
|
+180
|
+215
|
+268
|
+156
|
(a) Impacts published by the Commonwealth Treasurer are net of cheque duty from 2006-07 onwards and net of stamp duties on leases, credit/rental arrangements and mortgage duty from 2009-10 onwards, by which time all States will have abolished them.
(b) In 2002, the Commonwealth Treasurer unilaterally decided to remove the inflation component of petroleum safety net revenue escalation from the calculation of revenues forgone by States as a result of the GST reforms.
(c) Includes IGA taxes abolished by Western Australia that are yet to be included in the impacts published by the Commonwealth Treasurer as all States have not abolished them.
(d) Estimated on the assumption that Western Australia would continue to receive the same proportion of the maximum available payments as it did in 2005?06, plus an extra 5% from 2006?07 due to liquor reforms.
Source: Commonwealth 2007-08 MYEFO & 2006-07 Final Budget Outcome and Department of Treasury and Finance.
|
Specific Purpose Payments
The MYEFO report incorporates minor changes to the specific purpose payments (SPP) estimates for 2007‑08. It does not provide details for individual SPPs or forward estimates.
Revised WA SPP Estimates
|
| |
2007-08
|
2007-08
|
Difference
|
| |
Cwlth Budget
|
MYEFO
|
|
|
($m)
|
($m)
|
($m)
|
| Special Purpose Payments |
|
|
|
| Payments to the State |
2,831
|
2,878
|
+47
|
| Payments through the State(a) |
799
|
778
|
-21
|
(a) These are primarily for local governments and private schools. |
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