Andrew Maslaris and Michael Robinson
Total Commonwealth revenue in 2019–20 is estimated to be $513.7
billion, representing a 3.6 per cent increase from 2018–19. This figure is
projected to increase by 13.0 per cent over the forward estimates period, to
$580.5 billion in 2022–23.
Table 1 below provides a summary of the projected changes to
government revenue over the forward estimates period. Table 2 displays these
projections as a percentage of total revenue over the forward estimates period.
Table 1: Australian Government
general government (accrual) revenue
| ($ million) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Total individuals and other withholding taxes |
228
300 |
234
100 |
247
600 |
266
100 |
270
000 |
| Superannuation fund taxes |
11
320 |
9
750 |
13
270 |
14
820 |
16
320 |
| Company tax |
95
600 |
100
600 |
100
800 |
103
400 |
106
000 |
| Petroleum rent resource tax |
1
250 |
1
290 |
1
380 |
1
400 |
1
400 |
| Goods and services tax (GST) |
68
065 |
69
630 |
72
620 |
76
290 |
80
240 |
| Total excise and customs duty |
39
890 |
45
260 |
44
360 |
46
180 |
47
920 |
| Major bank levy |
1
560 |
1
610 |
1
710 |
1
810 |
1
910 |
| Other tax revenue |
13
100 |
14
356 |
14
995 |
15
620 |
16
310 |
| Total tax revenue |
459
085 |
476
596 |
496
734 |
525
620 |
540
100 |
| Non-tax revenue |
36
711 |
37
168 |
37
526 |
39
086 |
40
379 |
| Total revenue |
495
796 |
513
763 |
534
260 |
564
707 |
580
480 |
Source: Australian Government,
Budget strategy and outlook: budget paper no. 1:
2019–20, p. 9-24.
Table 2: taxation (accrual) revenue
as a percentage of total revenue
| (Per cent) |
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Individuals and
other withholding taxes |
46.0 |
45.6 |
46.3 |
47.1 |
46.5 |
| Superannuation
fund taxes |
2.3 |
1.9 |
2.5 |
2.6 |
2.8 |
| Company tax |
19.3 |
19.6 |
18.9 |
18.3 |
18.3 |
| Petroleum rent
resource tax |
0.3 |
0.3 |
0.3 |
0.2 |
0.2 |
| GST |
13.7 |
13.6 |
13.6 |
13.5 |
13.8 |
| Total excise
and customs duty |
8.0 |
8.8 |
8.3 |
8.2 |
8.3 |
| Major bank levy |
0.3 |
0.3 |
0.3 |
0.3 |
0.3 |
| Other tax
revenue |
2.6 |
2.8 |
2.8 |
2.8 |
2.8 |
| Non-tax revenue |
7.4 |
7.2 |
7.0 |
6.9 |
7.0 |
Source: Australian Government,
Budget strategy and outlook: budget paper no. 1:
2019–20, p. 9-24.
Key figures
All page references in this section refer to Budget
Strategy and Outlook: Budget Paper No. 1: 2019–20.
- Total revenue from taxation is expected to increase from an
estimated $495.8 billion in 2018–19 to $580.5 billion in 2022–23.
- Company tax cash receipts are expected to increase from an
estimated $95.6 billion in 2018–19 to $106.0 billion in 2022–23. It is estimated
that company tax as a percentage of total tax revenue will fall steadily from a
peak of 19.6 per cent in 2019–20 to 18.3 per cent in 2022–23. The company tax
projections have factored in an increase in company tax collections
due to extending the Australian Taxation Office’s (ATO) Tax Avoidance
Taskforce, with most of this flowing through in 2021–22 and 2022–23. However, this
is expected to be offset due to several liquefied natural gas (LNG) companies
having accumulated tax losses (pp. 4-11–4-12).
- Total individuals and withholding taxes are expected to
increase steadily from $228.3 billion in
2018–19 to $270.0 billion in 2022–23 despite significant individual tax rate cuts.
As can be seen in Table 2 above, despite the tax cuts proposed in the Budget,
individual tax as a percentage of total tax revenue is predicted to increase
over the forward estimates period. It is noted that despite the package of tax
cuts, individuals and withholding tax collections are expected to broadly
increase in line with growth prospects in the Australian economy (p. 4-11).
- Superannuation fund taxes are expected to temporarily drop
from $11.3 billion in 2018–19 to $9.8 billion in 2019–20, which is largely
attributable to the impact of recent off-market share buybacks (p. 4-12). As
can be seen from tables 1 and 2, superannuation fund taxes are expected to
steadily increase from 2020–21 to 2022–23.
- Petroleum rent resource tax collections are projected to
remain relatively stable over the forward estimates period. However, these
figures have been revised down since the Mid-Year Economic and
Fiscal Outlook 2018–19 (MYEFO) to reflect
weaker than expected commodity (or oil and gas) prices (p. 4-12).
- GST collections are forecast to grow from $68.1 billion to
$80.2 billion over the four years to
2022–23. These figures have been revised down since the MYEFO as a result of
weaker than expected collections and downward revisions to forecasts for growth
in consumption and dwelling investment (p. 4-13).
Table 3: percentage change in
(accrual) tax revenues on a year-by-year basis
| (Per cent) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Individuals and
other withholding taxes |
2.5 |
5.8 |
7.5 |
1.5 |
| Superannuation
fund taxes |
–13.9 |
36.1 |
11.7 |
10.1 |
| Company tax |
5.2 |
0.2 |
2.6 |
2.5 |
| Petroleum rent
resource tax |
3.2 |
7.0 |
1.4 |
0 |
| GST |
2.3 |
4.3 |
5.1 |
5.2 |
| Total excise
and customs duty |
13.5 |
–2.0 |
4.1 |
3.8 |
| Major bank levy |
3.2 |
6.2 |
5.8 |
5.5 |
| Other tax
revenue |
9.6 |
4.5 |
4.2 |
4.4 |
| Total tax
revenue |
3.8
|
4.2
|
5.8
|
2.8
|
| Non-tax revenue |
1.2 |
1.0 |
4.2 |
3.3 |
| Total
revenue |
3.6
|
4.0
|
5.7
|
2.8
|
Source: Australian Government,
Budget strategy and outlook: budget paper no. 1: 2019–20, p. 9-24.
Major revenue announcements
All page references in this section refer to Budget
Measures: Budget Paper No. 2: 2019–20.
- Personal income tax reduction package proposed significant
reforms to the personal income tax system. The major changes proposed include:
- from
1 July 2019 until 30 June 2022 the base low and middle income tax offset (LMITO)
payment will be increased from $200 to $255, and the maximum LMITO payment will
increase from $530 to $1,080
- from
1 July 2022 to 30 June 2023 the low income tax offset (LITO) payment will be
increased from $645 to $700 to an earnings threshold of $37,000. The initial
rate of phase-out of the LITO will reduce from 6.5 cents per dollar of earnings
to 5 cents per dollar of earnings for taxpayers earning between $37,500 and
$45,000, with the final rate of phase-out occurring at the rate of 1.5 cents
per dollar of earnings
- from
1 July 2022 the 19 per cent marginal tax bracket will be extended from $41,000
to $45,000 and
- from
1 July 2024 the 37 per cent tax bracket will be abolished and a new 30 per cent
tax bracket will be created for all individuals earning between $45,001 and
$200,000 (pp. 16–18).
Additional information about the proposed changes can be
found below. The Government has also published a tax relief
estimator which shows annual reduction in tax and annual tax liability.
- Increasing the instant asset write-off to assets valued at
$30,000 (increased from $25,000) and extending the instant asset write-off to
all businesses with annual turnover of $50 million or less (increased from $10
million or less). This means that from 7.30 pm on 2 April 2019 (Budget night) until
30 June 2020, businesses with annual turnover of $50 million or less
will be able to claim an immediate tax deduction for eligible business assets
that cost $30,000 or less (pp. 14–15).
- Establishing the Emergency Response Fund to fund natural
disaster recovery and response initiatives above and beyond existing programs.
Between 2019–20 (starting on 1 October 2019) and 2023–24 the fund will make
available up to $150 million, subject to government approval. The Emergency
Response Fund will be established with $3.9 billion of uncommitted funds
currently in the dormant Education Investment Fund (p. 8).
- ATO Tax Avoidance Taskforce to receive $1 billion over
four years. The Taskforce will target large corporates, multinationals, and high-wealth
individuals and is estimated to increase the underlying cash balance by $2
billion over the forward estimates period. The Government has also committed
$24.2 million in 2018–19 to the Department of Treasury to conduct a
communications campaign focused on improving the integrity of the tax system
(pp. 24–25).
- Additional ATO funding of $41.8 million over the forward
estimates period to increase engagement and on-time payment of tax and super
liabilities for larger businesses and high-wealth individuals. This is
expected to increase the underlying cash balance by $103.6 million over the
forward estimates period (p. 25).
- Certain compensation payments for natural disasters to be tax
exempt, including payments made to Primary Producers in the recent Queensland
storms and Category C and D grants for the North Queensland floods paid to
primary producers, small businesses and not-for-profit organisations
(pp. 19; 22).
PERSONAL INCOME TAX RATES—PROPOSED CHANGES 17-18, 18-19, 19-20
BUDGETS
Bolded numbers indicate changes.
| 1 July 2017 to 30 June 2018 |
| Rates |
Previous
Thresholds |
18-19
Budget Thresholds |
19-20
Budget Thresholds |
| Nil |
Up to
$18,200 |
Up to
$18,200 |
|
| 19% |
$18,201
to $37,000 |
$18,201
to $37,000 |
|
| 32.5% |
$37,001
to $87,000 |
$37,001
to $87,000 |
|
| 37% |
$87,001
to $180,000 |
$87,001
to $180,000 |
|
| 45% |
Above
$180,000 |
Above
$180,000 |
|
| 1 July 2018 to 30 June 2019 |
| Rates |
Previous
Thresholds |
18-19
Budget Thresholds |
19-20
Budget Thresholds |
| Nil |
Up to
$18,200 |
Up to
$18,200 |
Up to
$18,200 |
| 19% |
$18,201
to $37,000 |
$18,201
to $37,000 |
$18,201
to $37,000 |
| 32.5% |
$37,001
to $87,000 |
$37,001
to $90,000 |
$37,001
to $90,000 |
| 37% |
$87,001
to $180,000 |
$90,001 to
$180,000 |
$90,001
to $180,000 |
| 45% |
Above
$180,000 |
Above
$180,000 |
Above
$180,000 |
| 1 July 2022 to 30 June 2023 |
| Rates |
Previous |
18-19
Budget Thresholds |
19-20
Budget Thresholds |
| Nil |
Up to
$18,200 |
Up to
$18,200 |
Up to
$18,200 |
| 19% |
$18,201
to $37,000 |
$18,201
to $41,000 |
$18,201
to $45,000 |
| 32.5% |
$37,001
to $87,000 |
$41,001 to $120,000 |
$45,001 to
$120,000 |
| 37% |
$87,001
to $180,000 |
$120,001 to $200,000 |
$120,001
to $200,000 |
| 45% |
Above
$180,000 |
Above $200,000 |
Above
$200,000 |
| 1 July 2024 to 30 June 2025 |
| Rates |
Previous
threshold |
18-19
Budget Thresholds |
19-20
Budget |
| Rates |
Thresholds |
| Nil |
Up to
$18,200 |
Up to $18,200 |
Nil |
Up to
$18,200 |
| 19% |
$18,201
to $37,000 |
$18,201
to $41,000 |
19% |
$18,201
to $45,000 |
| 32.5% |
$37,001
to $87,000 |
$41,001
to $200,000 |
30% |
$45,001
to $200,000 |
| 37% |
$87,001
to $180,00 |
|
| 45% |
Above
$180,000 |
Above $200,000 |
45% |
Above
$200,000 |
LMITO CHANGES—1 July 2019 to 30 June 2022
| |
18-19
Budget |
19-20
Budget |
| LMITO Payment Base |
$200
for taxable income of $37,000 or less |
$255
for taxable income of $37,000 or less |
| Increase |
3c
per dollar increase between $37,001 and $48,000 |
7.5c
per dollar increase between $37,001 and $48,000 |
| LMITO Payment Maximum |
$530 |
$1,080 |
| LMITO phase out |
1.5c
reduction for every dollar between $90,000 and $125,333 |
3c
per dollar reduction for every dollar between $90,000 and $126,000 |
LITO CHANGES—1 July 2022 to 30 June 2023
| |
Prior
to 18-19 Budget |
18-19
Budget |
19-20
Budget |
| LITO Payment |
$445 |
$645 |
$700 |
| Withdrawal stage 1 |
1.5c
from $37,000 to $66,667. |
6.5c
for every dollar from $37,500 to $41,000 |
5c
for every dollar from $37,500 to $45,000 |
| Withdrawal stage 2 |
|
1.5c
from $41,000 to $66,667. |
1.5c
from $45,000 to $66,667. |
Medicare levy—low-income
thresholds for CPI from the 2018-19 income year
| |
18-19
Budget |
19-20
Budget |
| Singles |
$21,980 |
$22,398 |
| Family |
$37,089 |
$37,794 |
| Single Seniors and pensioners |
$34,758 |
$35,418 |
| Family seniors and pensioners |
$48,385 |
$49,304 |
| Family uplift per dependent
child or student |
$3,406 |
$3,471 |
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