Friday, October 16, 2015

No revenue problem Treasurer? Tax revenue falls $1.7 billion short:

Weeks after Treasurer Scott Morrison declared his budget had "a spending problem, not a revenue problem", new finance department figures show revenue falling short.

The figures for the first two months of the financial year show revenue of only $61.113 billion in July and August, well short of the $63.336 billion expected when the budget was delivered in July.

Tax revenue is down $1.7 billion down on the budget forecast due to both slower than expected wage growth and weaker than expected dividend payments.

Superannuation tax receipts are about 20 per cent short of expectations and the resource tax has brought in less than half of what was expected due in part to the lower oil price.

On the upside, company tax takings are $1 billion ahead of expectations and the lower Australian dollar has helped bring in an extra $1 billion in customs duty.

Spending is roughly as expected at $73.495 billion for the first two months of the financial year.

Former treasurer Joe Hockey forecast a deficit this financial year of $35.1 billion. Two months in to the year the deficit is $13.5 billion, more than one third of the forecast total.

But the department says that care needs to be taken when comparing cumulative revenue to full-year forecasts as takings can vary from month to month.

In The Age and Sydney Morning Herald