Transcript Fiscal choices - Treasury.gov.au

Fiscal choices and
federal financial relations
Economic and Social Outlook Conference
1 November 2012
Mr Nigel Ray
Acting Secretary to the Treasury
Commonwealth Budget position over time
30
Per cent of GDP
Per cent of GDP
12
Forecasts
Payments (LHS)
27
9
24
6
Receipts (LHS)
21
3
18
0
15
-3
Underlying cash balance (RHS)
12
1970-71
1975-76
1980-81
1985-86
1990-91
1995-96
Source: 2012-13 Commonwealth Mid-Year Economic and Fiscal Outlook
2000-01
2005-06
2010-11
-6
2015-16
Cash Balance of Commonwealth and States
5
Per cent of GDP
Per cent of GDP
5
4
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
1970-71
-5
1975-76
1980-81
1985-86
1990-91
Commonwealth underlying cash balance
1995-96
2000-01
2005-06
2010-11
State and Territory GFS cash balance
Source: 2012-13 Commonwealth Mid-Year Economic and Fiscal Outlook, ABS Government Financial Statistics (cat no. 5512.0),
2012-13 State and Territory Budgets and Treasury estimates.
Changes to the revenue outlook
Commonwealth tax receipts
Nominal GDP
Index (2007-08=100)
Index (2007-08=100)
Index (2007-08=100)
State and Territory tax receipts*
Index (2007-08=100)
Index (2007-08=100)
Index (2007-08=100)
140
140
140
140
140
140
130
130
130
130
130
130
120
120
120
120
110
110
110
110
100
100
100
100
2008-09 Budget
120
2012-13 Budget
110
100
2008-09 Budget
110
100
2012-13 Budget
90
07-08
90
08-09
09-10
10-11
11-12
12-13
90
07-08
2012-13 Budgets
90
08-09
09-10
10-11
11-12
Source: 2012-13 Commonwealth Budget and 2012-13 State and Territory Budgets.
* State and Territory figures are for own-source receipts.
120
2008-09 Budgets
12-13
90
07-08
90
08-09
09-10
10-11
11-12
12-13
Spending Pressures
(as a percentage of GDP)
8
Per cent of GDP
Per cent of GDP
8
6
6
4
4
2
2
0
0
Aged care
Health
Education
2014-15
Source: Treasury projections from Intergenerational Report 2010.
Note: This chart reflects Commonwealth spending only.
2049-50
Aged and Service
pensions
Other payments to
individuals
Government tax revenue
Per cent of GDP
Per cent of GDP
60
50
50
40
40
30
30
20
20
10
10
0
0
Denmark
Sweden
Belgium
Finland
France
Norway
Austria
Italy
Hungary
Netherlands
Slovenia
Iceland
Luxembourg
Czech Republic
Germany
United Kingdom
Israel
Spain
New Zealand
Canada
Poland
Greece
Estonia
Slovak Republic
Portugal
Ireland
Switzerland
Australia
Japan
United States
Turkey
Korea
Chile
Mexico
China
60
Source: OECD Statistics database, October 2012. China data is from IMF, World Economic Outlook Database, October 2012 and is for total revenue.
Note: Figures are averages for the period 2000-2009.
Size of Government in Australia
40
Per cent of GDP
Per cent of GDP
40
35
35
30
30
25
25
20
1959-60
20
1969-70
1979-80
Revenue
1989-90
Expenditure
Source: ABS 5204.0, 5206.0 and 5232.0.
Note: Revenue refers to consolidated general government total gross income. Expenditure refers to
revenue less consolidated general government net lending(+)/net borrowing(-).
1999-00
2009-10
Composition of Australian Government
and state spending, 2012-13
100 Per cent
Per cent 100
60
60
Commonwealth direct expenditure
Commonwealth grants to the States
Transport and communications
Public order and safety
50
Education
0
General public services
10
Defence
20
Other purposes
30
Fuel and energy
40
Social security and welfare
50
Housing and community amenities
70
Health
70
Recreation and culture
80
Agriculture, forestry, fishing and hunting
80
Other economic affairs
90
Mining, manufacturing and construction
90
State direct expenditure
Source: Commonwealth 2012-13 Budget and State and Territory 2012-13 Budgets (except Queensland which is sourced from its
2011-12 Mid Year Fiscal and Economic Review released in January 2012).
40
30
20
10
0
Vertical Fiscal Imbalance
Commonwealth Grants as a proportion of total State revenue
2009:
Intergovernmental
Agreement on
Federal Financial
Relations
70.0
60.0
50.0
2001:
Introduction
of the GST
1901:
Federation
40.0
1941: Transfer of
income tax power
to the
Commonwealth
30.0
20.0
10.0
0.0
1901-02
1909-10
1918-19
1928-29
1938-39
1948-49
1958-59
1969-70
1979-80
1989-90
1999-00
2009-10
2015-16
Data from 1901 to 1969-70 comes from Matthews and Jay (1997) Federal Finance. Data from 1979-80 to 2010-11 is from ABS cat.
no. 5512.0 and unpublished data. Data from 2011-12 is from the States’ 2012-13 Budgets and the Commonwealth 2012-13 MYEFO.
Underlying cash balances projected to 2022-23
2.0 Per cent of GDP
Per cent of GDP
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
2012-13
2014-15
2016-17
2012-13 Budget
Source: 2012-13 Mid-Year Economic and Fiscal Outlook
2018-19
2012-13 MYEFO
2020-21
0.0
2022-23
Fiscal choices and
federal financial relations
Economic and Social Outlook Conference
1 November 2012
Mr Nigel Ray
Acting Secretary to the Treasury