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2007-08 BUDGET PAPER No. 3

FEDERAL FINANCIAL RELATIONS

2007-08

CIRCULATED BY THE HONOURABLE PETER COSTELLO MP

TREASURER OF THE COMMONWEALTH OF AUSTRALIA AND SENATOR THE HONOURABLE NICK MINCHIN

MINISTER FOR FINANCE AND ADMINISTRATION FOR THE INFORMATION OF HONOURABLE MEMBERS

ON THE OCCASION OF THE BUDGET 2007-08 8 MAY 2007

© Commonwealth of Australia 2007

ISBN 1741 95685 4

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Or posted at: http://www.ag.gov.au/cca

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The Commonwealth budget papers and budget related information are available on the central Budget website at: www.budget.gov.au.

Printed by Canprint Communications Pty Ltd

iii

FOREWORD Budget Paper No. 3 Federal Financial Relations 2007-08 is one of a series of Budget Papers that provides information to supplement the Budget Speech. A full list of the series is printed on the inside cover of this paper.

This Budget Paper presents information on the Australian Government’s financial relations with State, Territory and local governments. This includes information on GST revenue provision and Australian Government payments, as well as an overview of fiscal developments in the States and Territories.

Notes This paper uses the following style conventions.

The Australian Capital Territory Government and the Northern Territory Government are referred to as ‘the Territories’. References to the ‘States’ or ‘each State’ include the State governments and Territory governments.

The State and local government sector is denoted as the ‘State/local sector’. References to the ‘State/local sector’ include the Territory governments unless otherwise stated.

Payments made to the state government sector include payments made to the local government sector unless otherwise specified.

Budget year refers to 2007-08, while the forward years refer to 2008-09, 2009-10 and 2010-11.

Figures in tables, and generally in the text, have been rounded. Discrepancies in tables between totals and sums of components reflect rounding unless otherwise noted. Percentage changes in tables are based on the underlying unrounded amounts.

One billion is equal to one thousand million.

Estimates of $100,000 and over are generally rounded to the nearest tenth of a million.

Estimates midway between rounding points are rounded up.

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Tables use the following notations:

na not applicable

0 zero

- nil

* unquantifiable

.. not zero, but rounded to zero

$m millions of dollars

$b billions of dollars

The following abbreviations are used, where appropriate:

NSW New South Wales

VIC Victoria

QLD Queensland

WA Western Australia

SA South Australia

TAS Tasmania

ACT Australian Capital Territory

NT

BBA

GMA

GST

Northern Territory

Budget balancing assistance

Guaranteed minimum amount

Goods and services tax

In this paper the term Commonwealth refers to the Commonwealth of Australia. The term is used when referring to the legal entity of the Commonwealth of Australia.

The term Australian Government is used when referring to the Government and the decisions and activities made by the Government on behalf of the Commonwealth of Australia.

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CONTENTS

Foreword ....................................................................................................................... iii

Executive Summary ...................................................................................................... 1

Overview of federal financial relations ....................................................................... 3

GST revenue to the States ........................................................................................... 7 Variations in GST revenue since the 2006-07 Budget.................................................... 7 GST revenue to the States.............................................................................................. 9 Distribution of GST revenue among the States ............................................................10 GST administration........................................................................................................14

Australian Government payments to the States......................................................15 General revenue assistance to the States ....................................................................15 Specific purpose payments ...........................................................................................18 Payments to local governments ....................................................................................21 Mirror tax arrangements................................................................................................23

Reform of state taxation .............................................................................................25 Benefits from the reform of state taxes .........................................................................25 Stamp duty on conveyances of real non-residential property.......................................26

Fiscal developments in the States ............................................................................27 State general government sector net operating balance ..............................................27 State general government sector fiscal balance ...........................................................29 State general government sector cash balance............................................................30 State net debt ................................................................................................................32

The Australian Loan Council .....................................................................................35 Outcome of the 2007 Australian Loan Council .............................................................35

Appendices Appendix A: Parameters and further information..........................................................37 Appendix B: Guaranteed minimum amount ..................................................................39 Appendix C: GST revenue policy decisions..................................................................43 Appendix D: Specific purpose payments ......................................................................49 Appendix E: Timetable for the abolition of state taxes..................................................95

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LIST OF TABLES

Table 1: GST revenue and Australian Government payments to the States.............. 5 Table 2: Reconciliation of GST revenue estimates..................................................... 7 Table 3: GST revenue policy decisions since the 2006-07 MYEFO........................... 8 Table 4: GST revenue to the States............................................................................ 9 Table 5: Growth in GST revenue to the States since 2000-01 ................................... 9 Table 6: GST relativities, 2006-07 and 2007-08 .......................................................11 Table 7: Distribution of the GST pool, 2006-07 and 2007-08 ...................................12 Table 8: Effect of horizontal fiscal equalisation, 2007-08..........................................13 Table 9: GST administration costs ............................................................................14 Table 10: State revenue gains from tax reform...........................................................17 Table 11: Specific purpose payments .........................................................................19 Table 12: Growth in specific purpose payments since 1999-00 .................................20 Table 13: Australian Government payments to local government (accrual

basis)...........................................................................................................22 Table 14: Financial assistance grants to local government (cash basis)....................23 Table 15: Mirror taxes accrued on behalf of the States ..............................................24 Table 16: State taxation revenues foregone as a result of reform..............................25 Table 17: Abolishing stamp duty on conveyances of real non-residential

property .......................................................................................................26 Table 18: Loan Council Allocation (LCA) nominations for 2007-08 ............................36 Table A1: Population by State .....................................................................................37 Table A2: Parameters used in this Budget Paper .......................................................37 Table B1: Financial assistance grants relativities, 2006-07 and 2007-08 ...................39 Table B2: Guaranteed minimum amount, GST revenue provision and budget

balancing assistance in 2006-07.................................................................40 Table B3: Guaranteed minimum amount, GST revenue provision and budget

balancing assistance in 2007-08.................................................................41 Table D1: Estimated specific purpose payments to and through the States,

repayments of advances, advances and interest payments, 2006-07 to 2010-11.....................................................................................50

Table D2: Estimated specific purpose payments to and through the States, repayments of advances, advances and interest payments, 2006-07 .......................................................................................................72

Table D3: Estimated specific purpose payments to and through the States, repayments of advances, advances and interest payments, 2007-08 .......................................................................................................81

Table D4: Estimated specific purpose payments direct to local government authorities, 2006-07 to 2010-11 ..................................................................90

Table D5: Estimated specific purpose payments direct to local government authorities, 2006-07.....................................................................................92

Table D6: Estimated specific purpose payments direct to local government authorities, 2007-08.....................................................................................93

Table E1: Timetable for the abolition of state taxes ....................................................97 Table E2: State taxes abolished before 1 July 2000 or never imposed ......................99

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LIST OF CHARTS

Chart 1: Total payments to the States since 1996-97................................................. 6 Chart 2: State shares of GST revenue, 2007-08 ......................................................10 Chart 3: GST redistribution as a proportion of the GST pool....................................13 Chart 4: State shares of Australian Government payments, 2007-08 ......................15 Chart 5: Specific purpose payments, 2007-08..........................................................19 Chart 6: Composition of specific purpose payments, 2007-08 .................................20 Chart 7: Individual state general government sector net operating balance ............28 Chart 8: Individual state general government sector fiscal balance .........................29 Chart 9: Individual state general government sector cash balance..........................31 Chart 10: Individual state net debt by sector (as at end of financial year)..................33

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EXECUTIVE SUMMARY • Federal financial relations were substantially reformed from 1 July 2000, as part of

The New Tax System. The new financial arrangements provide the States and Territories (the States) with a robust, secure and growing source of revenue — the goods and services tax — which replaced several inefficient state taxes and financial assistance grants from the Australian Government.

• The States will receive GST revenue of $41.9 billion in 2007-08 — an increase of 5.8 per cent from 2006-07. This revenue will be distributed among the States in accordance with the recommendations of the Commonwealth Grants Commission in its 2007 update of relativities and as agreed by all States.

• In 2007-08, the States will be better off by an estimated $3.2 billion due to the Australian Government’s reforms. Each State will receive more revenue from the GST than it would have received had the previous financial arrangements continued. This revenue windfall will increase to $4.6 billion by 2010-11.

• GST revenue will be 3.8 per cent of GDP in 2007-08 — up from 3.6 per cent in 2001-02 (the first full year of its operation).

• The Australian Government will provide the States with specific purpose payments of $28.5 billion in 2007-08 — an increase of 8.7 per cent from 2006-07. In addition, local governments will receive $2.3 billion in Australian Government grants in 2007-08, an increase of 11.8 per cent.

• Timetables are in place for the abolition of all but one of the state taxes listed for abolition in the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations. The abolition of these taxes is estimated to save taxpayers $5.0 billion in 2007-08 and a further $18.9 billion over the forward years. However, no State has yet committed to a timetable to abolish the last remaining tax specified in the agreement.

• Most States expect to record small operating surpluses in 2007-08 and the forward years and to rely on debt financing to cover capital expenditures. State public sector debt is expected to increase in 2007-08 and the forward years.

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OVERVIEW OF FEDERAL FINANCIAL RELATIONS

THE AUSTRALIAN GOVERNMENT’S REFORMS

The Australian Government implemented The New Tax System from 1 July 2000. An important component of the new system was the substantial reforms which were also made to Australia’s system of federal financial arrangements.

In 1999, Commonwealth and State agreement was reached on the reform of federal financial relations. That agreement was formalised in the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations of June 1999. The Australian Government gave effect to the agreement by enacting the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999.

There are three objectives underpinning the Intergovernmental Agreement:

• the achievement of a new national tax system, including the elimination of inefficient indirect taxes;

• the provision to the States of a more robust tax base that will grow over time; and

• an improvement in the financial position of all States.

The Australian Government has implemented all of its Intergovernmental Agreement commitments. It abolished the inefficient Commonwealth tax listed in the agreement (wholesale sales tax) and implemented the goods and services tax. It also ensured, through legislative provision, that the States receive every dollar of GST revenue. As was anticipated at the time, GST revenues have proved to be a robust source of state revenue that has been growing over time. Furthermore, every State now receives more revenue under the current federal financial arrangements than it would have if the previous arrangements had continued.

REFORM OF STATE TAXES

In the Intergovernmental Agreement, the States agreed to abolish a range of inefficient indirect taxes that were impeding economic activity. The States themselves nominated the taxes to be abolished.

By 1 July 2005, the States had abolished several taxes that were listed in the Intergovernmental Agreement. This first tranche of abolished state taxes included accommodation tax, financial institutions duty, quoted marketable securities duty and debits tax.

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The agreement also provided for further state taxes to be abolished once GST revenues proved to be sufficient. In 2006, the Australian Government reached agreement with all States on a schedule for the abolition of a second tranche of taxes, including all but one of the remaining state taxes listed in the Intergovernmental Agreement. This second tranche of inefficient state taxes being abolished includes stamp duties on mortgages, leases, and credit and rental arrangements. Notwithstanding that all States are already receiving substantial revenue gains from the Australian Government’s reforms, some of these state taxes will not be abolished until as late as 2012-13.

Furthermore, the States are still required to abolish the one remaining tax before all of their commitments will have been met. So far, no State has specified when it will abolish stamp duty on conveyances of real non-residential property. The Australian Government will continue to pursue this matter.

PAYMENTS TO THE STATES AND TERRITORIES

In 2007-08, the States will receive GST revenue of $41.9 billion and other payments from the Australian Government of $30.8 billion, totalling $72.6 billion, as shown in Table 1. This is a 7.1 per cent increase in total payments, compared with the $67.8 billion that the States will receive in 2006-07.1

1 Payments made to the state government sector include payments made to the local government sector unless otherwise specified.

Overview of federal financial relations

5

Table 1: GST revenue and Australian Government payments to the States $million NSW VIC QLD WA SA TAS ACT NT Total

2006-07(1) GST revenue to the States 11,034 8,573 8,049 3,978 3,591 1,573 768 1,985 39,552

(2) General revenue assistance - - - - - - - - -

(3) Specific purpose payments 9,076 6,540 5,477 3,412 2,199 679 444 417 28,244Payments to the States 6,633 4,641 4,001 2,623 1,605 495 297 331 20,627Payments through the States 1,797 1,418 1,073 541 451 115 110 51 5,555Grants for local governments 539 396 326 195 117 55 35 24 1,687Payments direct to local govt 108 86 76 52 26 14 1 11 374

(4) Australian Government payments to the States and local govt (2) + (3) 9,076 6,540 5,477 3,412 2,199 679 444 417 28,244

(5) GST and total payments (1) + (4) 20,110 15,113 13,526 7,390 5,790 2,253 1,212 2,402 67,796

2007-08(1) GST revenue to the States 11,926 9,147 8,384 3,945 3,855 1,646 823 2,124 41,850

(2) General revenue assistance - - - - - - - - -

(3) Specific purpose payments 9,850 6,983 6,095 3,711 2,388 767 486 483 30,774Payments to the States 7,168 4,906 4,454 2,831 1,737 545 328 388 22,367Payments through the States 1,962 1,547 1,186 597 493 138 122 56 6,100Grants for local governments 559 410 338 202 121 57 37 25 1,749Payments direct to local govt 160 120 117 81 38 27 .. 14 557

(4) Australian Government payments to the States and local govt (2) + (3) 9,850 6,983 6,095 3,711 2,388 767 486 483 30,774

(5) GST and total payments (1) + (4) 21,776 16,130 14,479 7,657 6,243 2,413 1,309 2,606 72,624 GST revenue provided to the States will increase by $2.3 billion (5.8 per cent) in 2007-08 and Australian Government payments to state and local governments will increase by a further $2.5 billion (9.0 per cent). Australian Government payments to the States include payments provided for local governments of $2.3 billion in 2007-08.

All GST revenue is provided to the States to spend according to their own budget priorities. As agreed by all States in the Intergovernmental Agreement, GST revenues are distributed among the States in accordance with the principle of horizontal fiscal equalisation, and having regard to the recommendations of the Commonwealth Grants Commission.

Specific purpose payments are a financial contribution to important areas of state responsibility which the Australian Government makes in pursuit of its policy objectives. Typically, the States need to fulfil specified conditions in order to receive these payments, which cover most functional areas of state and local government activity, including education, health, social security, housing and transport.

At the request of the States, the Australian Government provided a commitment in the Intergovernmental Agreement that it would maintain specific purpose payments in aggregate. The commitment was consistent with the objective of the States being

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financially better off under the new arrangements. The Australian Government continues to meet this commitment.

Total payments to the States have grown steadily since the introduction of The New Tax System in 2000-01 (Chart 1). The average annual increase in total payments over this seven year period has been 6.5 per cent, compared with 6.3 per cent for the previous seven years.

Chart 1: Total payments to the States since 1996-97

0

20

40

60

80

0

20

40

60

80

Financial assistance grants Other

Local government payments

1997-98 1999-00 2001-02 2003-04 2005-06 2007-08

Specific purpose payments

GST

$billion $billion

MINISTERIAL COUNCILS

The Ministerial Council for Commonwealth-State Financial Relations was established in accordance with the Intergovernmental Agreement to oversee the operation of the agreement. The Ministerial Council generally meets annually to review the administration of the GST by the Australian Taxation Office, consider amendments to the GST, and consider the on-going reform of federal financial relations.

The Australian Loan Council generally meets annually to coordinate public sector borrowing. The council has regard to each jurisdiction’s fiscal position as well as the macroeconomic implications of the aggregate borrowing requirement. Current arrangements operate on a voluntary basis and emphasise transparency of public sector financing rather than adherence to strict borrowing limits.

7

GST REVENUE TO THE STATES In accordance with the Intergovernmental Agreement, the Australian Government administers the GST on behalf of the States and all GST revenue is paid to the States. This provides the States with a robust, secure and growing source of revenue to spend according to their own budget priorities. In 2007-08, GST revenue will be $43.1 billion — an increase of $2.4 billion (5.8 per cent) from 2006-07.

VARIATIONS IN GST REVENUE SINCE THE 2006-07 BUDGET

Table 2 is a reconciliation of the GST revenue estimates since the 2006-07 Budget and the Mid-Year Economic and Fiscal Outlook 2006-07 (MYEFO). The reconciliation accounts for policy decisions and parameter and other variations.

Table 2: Reconciliation of GST revenue estimates

$million 2006-07 2007-08 2008-09 2009-10

GST revenue at 2006-07 Budget 40,000 42,210 44,440 46,670Changes from 2006-07 Budget to MYEFO

Effect of policy decisions .. .. .. ..Effect of revenue recognition variations(a) 390 340 260 350Effect of parameter and other variations 240 580 930 980

Total variations 630 920 1,190 1,330

GST revenue at 2006-07 MYEFO 40,630 43,130 45,630 48,000Changes from MYEFO to 2007-08 Budget

Effect of policy decisions .. -110 -161 -138Effect of parameter and other variations 90 70 31 -52

Total variations 90 -40 -130 -190

GST revenue at 2007-08 Budget 40,720 43,090 45,500 47,810

Estimates Projections

(a) Accrual estimates for GST revenue at the 2006-07 Budget were recognised using the Taxation Liability

Method (TLM) of revenue recognition. Since the 2005-06 Final Budget Outcome, GST revenue has been recognised using the Economic Transactions Method (ETM) method of revenue recognition. Refer to Appendix F of Statement 5 in 2006-07 Budget Paper No. 1 for an explanation of the different methods of revenue recognition.

GST revenue for 2006-07 is expected to be $90 million higher than forecast at MYEFO. This reflects the stronger than expected March quarter outcome for consumption subject to GST. However, weaker inflation forecasts since MYEFO dampen GST revenue in 2007-08 and the forward years. Policy decisions will also have a small negative impact on GST revenue in 2007-08 and the forward years.

Policy decisions which have a positive impact on GST revenue include:

• providing funding for additional compliance activities for GST (additional revenue of $65 million over four years); and

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• not proceeding with a decision in respect to compulsory third party insurers (additional revenue of $27 million over four years).

The revenue impact of those policy decisions is more than offset by decisions which have a negative impact on GST revenue, including:

• increasing the registration turnover threshold for the GST (at a cost of $318 million over four years); and

• changes to the operation of tourist shopping arrangements to enhance their effectiveness (at a cost of $263 million over four years).

The estimated revenue effect of each GST policy decision since the 2006-07 MYEFO is shown in Table 3. Detailed information on each decision is in Appendix C.

Table 3: GST revenue policy decisions since the 2006-07 MYEFO $million 2007-08 2008-09 2009-10 2010-11

Compulsory third party schemes - alternative globaldecreasing adjustment methodology 6.7 6.7 6.7 6.7

Debt collection enhancement - reducing taxation debt andoutstanding superannuation guarantee charge payments 5.0 20.0 20.0 20.0

Employee share schemes that provide stapled securities -0.1 -0.1 -0.1 -0.1Expand the range of goods in inwards duty free stores -2.0 -2.0 -2.0 -2.0GST car concession for certain injured defence personnel - - - -GST concessions for the International Criminal Court .. .. .. ..Increasing the GST registration turnover threshold -56.7 -82.9 -87.1 -91.4Increasing the threshold for requiring an approved tax

invoice for GST -0.9 -1.1 -1.2 -1.3International telecommunications services - - - -PAYG instalments paid annually when voluntarily

registered for GST - -35.0 -5.0 -5.0Pharmaceutical concession for certain defence personnel - - - -Simplified accounting methods - extending availability -1.0 -2.0 -2.0 -2.0Tourist Refund Scheme - introducing private providers

and enhancements to tax-free shopping -61.0 -65.0 -67.0 -70.0

Total GST revenue policy decisions -110.0 -161.4 -137.7 -145.1

GST revenue to the States

9

GST REVENUE TO THE STATES

Under the Intergovernmental Agreement, all GST revenue collected by the Australian Taxation Office is provided to the States. The Commissioner of Taxation estimates the likely level of GST receipts in June, prior to the end of each financial year. A balancing adjustment is also usually made in the following financial year to ensure that the States receive the full amount of GST receipts for a financial year. The calculations of GST revenue to be provided to the States are provided in Table 4.

Table 4: GST revenue to the States Actual

$million 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

GST revenue 38,884 40,720 43,090 45,500 47,810 50,300less change in GST receivables 1,443 1,140 1,240 1,300 1,360 1,450GST receipts 37,442 39,580 41,850 44,200 46,450 48,850plus variation from the

Commissioner's determination(a) 28plus prior year balancing adjustment -288 -28GST revenue to the States 37,182 39,552 41,850 44,200 46,450 48,850


(a) The Commissioner’s determination for 2005-06 was $28 million higher than the final outcome. GST revenue to the States has grown strongly since its introduction, as shown in Table 5. The average annual growth since 2001-022 has been 7.9 per cent. Furthermore, GST revenue has increased from 3.6 per cent of GDP in 2001-02 to 3.8 per cent in 2007-08.

Table 5: Growth in GST revenue to the States since 2000-01 $million NSW VIC QLD WA SA TAS ACT NT Total

2000-01 7,258 5,099 4,658 2,375 2,279 988 473 1,226 24,3552001-02 8,132 5,593 5,019 2,518 2,477 1,060 544 1,290 26,6322002-03 9,080 6,365 5,888 2,910 2,859 1,247 616 1,515 30,4792003-04 9,667 6,961 6,553 3,158 3,146 1,394 658 1,681 33,2192004-05 9,884 7,346 7,329 3,624 3,293 1,435 680 1,730 35,3232005-06 10,362 7,833 7,689 3,804 3,442 1,496 723 1,834 37,1822006-07(a) 11,034 8,573 8,049 3,978 3,591 1,573 768 1,985 39,5522007-08(a) 11,926 9,147 8,384 3,945 3,855 1,646 823 2,124 41,850 (a) Estimates.

2 As only 11 monthly activity statements, 3 quarterly activity statements, and no annual activity statements were payable in 2000-01, the calculated annual growth uses 2001-02 as the base year.

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DISTRIBUTION OF GST REVENUE AMONG THE STATES

As agreed by all States in the Intergovernmental Agreement, GST revenue is distributed among the States in accordance with the long-standing principle of horizontal fiscal equalisation and having regard to the recommendations of the Commonwealth Grants Commission.

The state shares of GST revenue for 2007-08 (totalling $41.9 billion) are shown in Chart 2.

Chart 2: State shares of GST revenue, 2007-08

NSW $11,926 million

VIC $9,147 million

WA $3,945 million

QLD $8,384 million

SA $3,855 million

NT $2,124 million

TAS $1,646 millionACT

$823 million

GST relativities The Commission recommends relativities to be used in calculating each State’s share of GST revenue such that, if each State made the same effort to raise revenue from its own sources and operated at the same level of efficiency, each State would have the capacity to provide services at the same standard.

This does not necessarily result in the equalisation of government services — just the equalisation of the capacity to provide the same standard of services. States are able to spend their share of GST revenue according to their own budget priorities.

In calculating the GST relativities, the Commission takes into account differences in the States’ capacities to raise revenues and differences in the costs the States would incur in providing the same standard of government services.

The GST relativities have been endorsed by the Ministerial Council for Commonwealth-State Financial Relations. The relativities for 2006-07 and 2007-08 are shown in Table 6.


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Table 6: GST relativities, 2006-07 and 2007-08 NSW VIC QLD WA SA TAS ACT NT

2006-07(a) 0.87332 0.89559 1.02387 1.00480 1.18862 1.54931 1.14575 4.327552007-08 0.89079 0.90096 1.00607 0.94747 1.20791 1.54465 1.16293 4.36824 (a) These relativities take account of amended data provided by South Australia after the release of the

Commonwealth Grants Commission’s 2006 report.

Applying the GST relativities to the GST pool The Intergovernmental Agreement defines the GST pool for a financial year to consist of GST revenue plus health care grants provided by the Australian Government under Australian Health Care Agreements. Some health care grants are quarantined from the pool.

The GST relativities are applied to estimated state populations in order to determine a weighted population for each State. Each State is then allocated its population-weighted share of the combined pool of GST revenue and unquarantined health care grants. The final distribution of GST revenue is determined by deducting the unquarantined health care grants, which are separately provided to the States, from each State’s share of the GST pool. The calculations for the distribution of the GST pool are shown in Table 7.

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Table 7: Distribution of the GST pool, 2006-07 and 2007-08 Projected

population31 December (5) - (6)

% $m $m $m(1) (2) (3) (4) (5) (6) (7)

2006-07NSW 6,863,553 0.87332 5,994,078 28.9 13,821.4 2,787.1 11,034.2VIC 5,128,419 0.89559 4,592,961 22.1 10,590.6 2,017.8 8,572.8QLD 4,089,996 1.02387 4,187,624 20.2 9,656.0 1,607.0 8,049.0WA 2,073,267 1.00480 2,083,219 10.0 4,803.6 825.7 3,977.9SA 1,561,537 1.18862 1,856,074 8.9 4,279.8 689.0 3,590.8TAS 490,427 1.54931 759,823 3.7 1,752.0 178.8 1,573.3ACT 330,735 1.14575 378,940 1.8 873.8 105.5 768.3NT 208,330 4.32755 901,558 4.3 2,078.8 93.5 1,985.4

Total 20,746,264 n/a 20,754,277 100.0 47,855.9 8,304.2 39,551.7

2007-08NSW 6,928,601 0.89079 6,171,928 29.4 14,858.3 2,932.0 11,926.3VIC 5,198,499 0.90096 4,683,640 22.3 11,275.4 2,128.4 9,147.0QLD 4,165,916 1.00607 4,191,203 19.9 10,089.9 1,705.6 8,384.3WA 2,114,454 0.94747 2,003,382 9.5 4,822.9 877.5 3,945.4SA 1,574,204 1.20791 1,901,497 9.0 4,577.6 723.0 3,854.6TAS 493,242 1.54465 761,886 3.6 1,834.2 187.8 1,646.3ACT 333,585 1.16293 387,936 1.8 933.9 111.3 822.6NT 211,303 4.36824 923,022 4.4 2,222.1 98.6 2,123.5

Total 21,019,804 n/a 21,024,494 100.0 50,614.2 8,764.2 41,850.0

Share ofGST pool

Unquarantined HCGs

GST revenue

GST relativities

Weighted population(a)

(1) x (2)

Share of weighted

population

(a) The totals of the weighted populations in column 3 differ from the totals of the populations in column 1.

This is a consequence of the population projections in column 1 being revised subsequent to the Commonwealth Grants Commission calculating the GST relativities.


13

The effect of horizontal fiscal equalisation

One way to view the effect of horizontal fiscal equalisation is to compare each State’s share of the GST pool using the GST relativities with a notional distribution on an equal per capita basis. In 2007-08, $3.3 billion (or 6.6 per cent) of the GST pool will be redistributed among the States, compared with an equal per capita distribution (Table 8).

Table 8: Effect of horizontal fiscal equalisation, 2007-08 Redistribution(a)

$m $m $m million $

NSW 14,858.3 16,683.6 -1,825.3 6.9 -263.4VIC 11,275.4 12,517.6 -1,242.3 5.2 -239.0QLD 10,089.9 10,031.2 58.6 4.2 14.1WA 4,822.9 5,091.5 -268.5 2.1 -127.0SA 4,577.6 3,790.6 787.1 1.6 500.0TAS 1,834.2 1,187.7 646.5 0.5 1,310.6ACT 933.9 803.2 130.7 0.3 391.7NT 2,222.1 508.8 1,713.3 0.2 8,108.1

Total 50,614.2 50,614.2 3,336.1 21.0 na

GST pool distributed using GST relativities

Equal per capita distribution of GST

pool

Per capita redistribution

Estimated population

(a) The total redistribution of $3,336.1 million is the sum of positive (or negative) items in that column.

The proportion of the GST pool being redistributed in 2007-08 continues the decline evident since 2004-05 (Chart 3). This reflects the convergence in the fiscal capacities of the four most populous States, partly due to the influence of commodity prices and property market cycles on the revenue raising capacities of these States.

Chart 3: GST redistribution as a proportion of the GST pool

0

2

4

6

8

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080

2

4

6

8Per cent Per cent

Simplification of the horizontal fiscal equalisation methodology

In March 2007, the Commonwealth Grants Commission reported to the Ministerial Council for Commonwealth-State Financial Relations on its further progress with the methodology review. The report was endorsed by the Ministerial Council. The outcomes of the Commission’s methodology review are to be implemented in 2010. The Commission’s report is available on its website at www.cgc.gov.au.

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GST ADMINISTRATION

Because the GST has a national tax base, but all GST revenue is provided to the States, the Intergovernmental Agreement provides for the Australian Taxation Office to administer the GST on behalf of the States. Consequently, the States compensate the Australian Government for the agreed costs incurred by the Australian Taxation Office in administering the GST, as shown in Table 9.

Table 9: GST administration costs Actual

$million 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Australian Taxation Office 603.8 618.5 635.9 644.5 633.6 639.3State government payments -603.8 -618.5 -635.9 -644.5 -633.6 -639.3

Australian Government budget impact 0 0 0 0 0 0


In March 2007, the Ministerial Council for Commonwealth-State Financial Relations endorsed the administration costs for 2007-08, including additional costs of $15 million over four years in respect of the policy decision to improve compliance activities.

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AUSTRALIAN GOVERNMENT PAYMENTS TO THE STATES Australian Government payments to the States consist of general revenue assistance and specific purpose payments.

Prior to the reform of federal financial relations, implemented from 1 July 2000, general revenue assistance comprised the largest component of Australian Government payments to the States. Those payments consisted mostly of financial assistance grants, which have now been replaced by the provision of GST revenue to the States. General revenue assistance also includes a range of other payments, most of which have largely been phased out. For 2007-08 and the forward years, the Australian Government has estimated that it will not provide any general revenue assistance to the States.

The Australian Government will continue to provide specific purpose payments to state and local governments. In 2007-08, these payments will total $30.8 billion, an increase of $2.5 billion (9.0 per cent) from 2006-07. The state shares of these payments are shown in Chart 4.

Chart 4: State shares of Australian Government payments, 2007-08

NSW $9,850 million

VIC $6,983 million

WA $3,711 million

QLD $6,095 million

SA $2,388 millionNT

$483 millionTAS

$767 millionACT $486 million

GENERAL REVENUE ASSISTANCE TO THE STATES

General revenue assistance is a broad category of payments that are provided to the States to spend according to their own budget priorities. They include budget balancing assistance (BBA), compensation payments in respect of GST policy decisions and National Competition Policy payments.

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Budget balancing assistance In the Intergovernmental Agreement, the Australian Government guaranteed that the budgetary position of each State would be no worse than it would have been had its reforms not been implemented. The guaranteed minimum amount (GMA) is an estimate of the revenue that each State would have received under the previous system of financial assistance grants and if their own inefficient state taxes had not been abolished as part of the reforms. Detailed calculations of the GMA for 2006-07 and 2007-08 are provided in Appendix B.

The Australian Government will pay BBA to the States during the transitional period (which will expire on 30 June 2009) if a State’s share of GST revenue in a financial year is less than its GMA for that year.

In 2007-08 and the forward years, all States will receive more GST revenue than their GMA. Consequently, no State will require BBA. Indeed, the States will receive a total revenue gain from tax reform of $3.2 billion more than their GMA in the Budget year. These revenue gains are estimated to increase to $4.6 billion by 2010-11, as shown in Table 10.

Australian Government payments to the States

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Table 10: State revenue gains from tax reform(a) $million NSW VIC QLD WA SA TAS ACT NT Total

2006-07(1) GMA 10,873 8,123 7,368 3,651 3,388 1,464 707 1,867 37,440(2) GST revenue 11,034 8,573 8,049 3,978 3,591 1,573 768 1,985 39,552(3) BBA (1) - (2) 0 0 0 0 0 0 0 0 0(4) States' revenue gain (2) - (1) 162 450 681 327 203 109 61 119 2,1122007-08(1) GMA 11,295 8,422 7,554 3,516 3,585 1,529 740 2,000 38,642(2) GST revenue 11,926 9,147 8,384 3,945 3,855 1,646 823 2,124 41,850(3) BBA (1) - (2) 0 0 0 0 0 0 0 0 0(4) States' revenue gain (2) - (1) 631 725 830 429 269 117 82 124 3,2082008-09(1) GMA 11,941 8,832 7,662 3,368 3,750 1,579 765 2,122 40,019(2) GST revenue 12,911 9,849 8,629 3,898 4,092 1,710 862 2,249 44,200(3) BBA (1) - (2) 0 0 0 0 0 0 0 0 0(4) States' revenue gain (2) - (1) 970 1,017 966 530 342 131 97 127 4,1812009-10(1) GMA 12,866 9,271 7,880 3,290 3,942 1,628 804 2,250 41,931(2) GST revenue 13,969 10,393 8,847 3,850 4,324 1,768 906 2,392 46,450(3) States' revenue gain (2) - (1) 1,103 1,122 967 560 382 140 102 142 4,5192010-11(1) GMA 13,893 9,831 8,297 3,220 4,163 1,687 840 2,365 44,296(2) GST revenue 15,009 11,020 9,190 3,738 4,564 1,839 952 2,538 48,850(3) States' revenue gain (2) - (1) 1,117 1,189 893 517 402 152 112 173 4,554 (a) No BBA is payable when GST revenue exceeds the GMA. As part of the agreement with the States to

abolish most of the state taxes listed for review under the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, the Australian Government has extended the transitional period (in which BBA may be paid) from 30 June 2006 to 30 June 2009.

Compensation payments for GST policy decisions The Australian Government, with the agreement of state governments, legislated that from 2004-05, small businesses and non-profit organisations which voluntarily registered for the GST could pay and report GST on an annual rather than monthly or quarterly basis. To obtain the agreement of the States, the Australian Government agreed to compensate the States for the deferral of GST revenue.

At MYEFO, it was anticipated that the States would be provided compensation payments of $17 million in 2006-07 and $18 million in 2007-08, increasing over the forward years.

Final tax return data for 2004-05 now indicates that the impact of the policy decision on GST revenue was lower than forecast. Consequently, there has been an overpayment of compensation to the States. The overpayment is currently estimated to be about $320 million. The Australian Government has agreed with the States to suspend future compensation payments to prevent further overpayment. Once final tax return data for 2005-06, 2006-07 and 2007-08 is available, the States will acquit accounts based on a net present value calculation of the total compensation required. If the amount already

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paid to the States is less than the net present value, the shortfall will be paid to the States. More likely, there will be a remaining overpayment to be recovered.

Further information is contained in the expense measure Suspending GST compensation in Budget Paper No. 2 in the Treasury portfolio.

National Competition Policy payments Between 1997-98 and 2005-06, the Australian Government provided National Competition Policy payments to the States for implementing National Competition Policy and related reforms. Each State’s payments were conditional on that State achieving satisfactory progress with the implementation of the reforms, including a commitment to review legislation that restricts competition, applying competitive neutrality principles to government business activities and introducing specific reforms in the electricity, gas, water and road transport sectors.

The Australian Government suspended $43.2 million in 2005-06 National Competition Policy payments, following recommendations provided by the National Water Commission. This included water reform suspensions for outstanding obligations relating to interstate trading in the southern Murray-Darling Basin, and for lack of progress and outstanding reforms with respect to water planning.

The Commission has indicated that it will make recommendations about the 2005-06 suspensions following assessments in 2007.

SPECIFIC PURPOSE PAYMENTS

Specific purpose payments constitute a significant amount of Australian Government expenditure. In 2007-08, they are estimated to total $30.8 billion, an increase of $2.5 billion (9.0 per cent) over 2006-07. For the Budget year, total specific purpose payments will represent 13.1 per cent of total Australian Government expenditure.

The Australian Government provides specific purpose payments to pursue important national policy objectives in areas that may be administered by the States. Typically the States need to fulfil specified conditions in order to receive these payments, which cover most functional areas of state and local government activity, including education, health, social security, housing and transport.

Detailed tables of specific purpose payments for 2006-07 and 2007-08, including state shares of each payment, are provided in Appendix D.

The broad categories of specific purpose payment, as shown in Chart 5 and Table 11, are:

• payments made to the States to help fund state government functions;


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• payments made through the States, where the state governments distribute the payment to other organisations, such as private schools;

– this includes financial assistance grants to be distributed to local governments; and

• payments made by the Australian Government direct to local governments.

Chart 5: Specific purpose payments, 2007-08

Payments to the States $22,367 million

Payments throughthe States

$6,100 millionPayments direct to local government

$577 millionFinancial assistance grants for local government $1,749 million

Table 11: Specific purpose payments Actual

$million 2005-06 2006-07 2007-08

Payments to the States 19,612.5 20,627.0 22,367.4Payments through the States 5,296.9 5,555.3 6,100.2Financial assistance grants through States to local government 1,618.6 1,687.5 1,749.4Payments direct to local government 376.1 374.3 556.6

Total payments 26,904.1 28,244.1 30,773.6

Estimates

Specific purpose payments have grown strongly since 1999-00, as shown in Table 12, with an average annual growth of 7.0 per cent.

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Table 12: Growth in specific purpose payments since 1999-00 $million NSW VIC QLD WA SA TAS ACT NT Total

1999-00 5,813 4,148 3,213 2,082 1,500 549 321 290 17,9162000-01 6,256 4,401 3,544 2,313 1,533 526 327 309 19,2072001-02 6,806 5,024 3,999 2,517 1,687 554 366 505 21,4582002-03 7,067 5,155 3,988 2,539 1,721 550 395 366 21,7812003-04 7,618 5,355 4,287 2,551 1,801 563 405 361 22,9402004-05 8,154 5,742 4,614 2,898 1,955 637 415 379 24,7952005-06 8,727 6,262 5,055 3,249 2,079 680 426 426 26,9042006-07(a) 9,076 6,540 5,477 3,412 2,199 679 444 417 28,2442007-08(a) 9,850 6,983 6,095 3,711 2,388 767 486 483 30,774 (a) Estimates. The Australian Government’s commitment to maintain specific purpose payments in aggregate is being met. In nominal terms, total specific purpose payments have increased by 71.8 per cent since 1999-2000.

Major categories of specific purpose payments In 2007-08, specific purpose payments for health, education and transport are estimated to account for 76.2 per cent of all specific purpose payments. These categories encompass payments for public hospitals, schools, vocational education and training, and the development, construction and maintenance of the National Land Transport Network under AusLink (Chart 6). Payments to local governments account for a further 7.5 per cent of all specific purpose payments.

Chart 6: Composition of specific purpose payments, 2007-08

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Payments to the States Payments through the States Payments direct to local government

$billion $billion


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‘Tied’ and ‘untied’ specific purpose payments Agreements to provide specific purpose payments are often put in place to achieve national objectives in areas of state and local government responsibility. However, in making these payments, the Australian Government does not seek to take over responsibility for those functions.

Most specific purpose payments are ‘tied’, meaning that they are subject to conditions designed to ensure that the national objectives are achieved. Such objectives may include:

• general policy conditions — for example, the provision of free public hospital access for Medicare patients in return for funding under the Australian Health Care Agreements; and

• requirements that payments be expended for a specific purpose only — for example, grants provided for the eradication of red imported fire ant infestations detected in Australia.

Many of the ‘tied’ payments are made subject to the States maintaining real growth in their own financial contributions to a specified programme area or matching the Australian Government’s funding contributions. The States are also required to report agreed financial and performance information relating to each ‘tied’ payment in order to evaluate whether the national objectives are being achieved.

Some specific purpose payments are not subject to conditions relating to expenditure — or are ‘untied’. These typically relate to revenue sharing arrangements or compensation — either for the referral of powers, the transfer of responsibilities or for other Australian Government action that affects the States.

PAYMENTS TO LOCAL GOVERNMENTS

The Australian Government provides financial assistance to local governments to enhance their capacity to provide services to local communities. This funding is provided in the form of financial assistance grants (which are specific purpose payments paid through the States) and specific purpose payments direct to local governments.

In aggregate, Australian Government payments to local government will be $2.3 billion in 2007-08, as shown in Table 13.

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Table 13: Australian Government payments to local government (accrual basis) $million 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08

Financial assistance grants 1,328 1,394 1,455 1,508 1,548 1,619 1,687 1,749Payments direct to local govt 109 503 279 368 311 376 374 557

Australian Government payments 1,437 1,897 1,734 1,876 1,859 1,995 2,062 2,306 There is some variation in payments between financial years. This is a consequence of the specific purpose payments direct to local government being programme based and provided in response to identified needs. In contrast, financial assistance grants are indexed annually so that they are maintained in real per capita terms.

Financial assistance grants

The Australian Government provides untied financial assistance grants to local governments to spend according to their own priorities. In 2006-07, $1.69 billion in financial assistance grants will be provided to the local government sector and $1.75 billion will be provided in 2007-08 (Table 13).

The annual increase in financial assistance grants is based on an escalation factor, which the Treasurer determines with reference to population growth and the consumer price index. For 2007-08, it is estimated that the financial assistance grants will be indexed by 3.8 per cent.

Financial assistance grants are paid to the States as a specific purpose payment, on the condition that all the funds are passed on to local government. The grants contain two components:

• general purpose assistance, which is distributed on the basis of population; and

• untied local road funding, which is distributed on the basis of historical shares.

State grants commissions determine the intra-state distribution of the financial assistance grants between local governments.

State shares of financial assistance grants for 2006-07 and 2007-08 are shown in Table 14. The cash totals vary from the accrual totals shown in Table 13 due to adjustments for any overpayment or underpayment from the previous year. These adjustments arise because the Treasurer determines the escalation factors in June prior to the end of each financial year, and the adjustment in the following financial year ensures that local governments receive their correct entitlement using the final escalation factor.


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Table 14: Financial assistance grants to local government (cash basis) $million NSW VIC QLD WA SA TAS ACT NT Total

2006-07General purpose assistance 388 288 229 116 88 28 19 12 1,168Untied local road funding 150 107 97 79 28 27 17 12 518Total(a) 539 395 326 195 117 55 35 24 1,686

2007-08General purpose assistance 401 300 240 121 91 29 19 12 1,214Untied local road funding 156 111 101 82 30 29 17 13 539Total(b) 557 411 341 204 121 57 37 25 1,753 (a) The 2006-07 estimate takes into account an underpayment of $1.7 million in 2005-06. The Treasurer will

determine the final 2006-07 escalation factor in June 2007. The 2006-07 escalation factor is currently estimated to be 1.0419.

(b) The 2007-08 estimate includes the estimated adjustment for the difference between the 2006-07 escalation factor estimated in June 2006 (used to calculate payments in 2006-07) and the final factor for 2006-07 (to be determined in June 2007). On the basis of the current estimate of the 2006-07 escalation factor, this adjustment will be an increase of $2.1 million. The 2007-08 escalation factor is currently estimated to be 1.0380. Financial assistance grants in 2007-08 will be paid on the basis of the escalation factor that the Treasurer will estimate in June 2007. The Treasurer will determine the final escalation factor for 2007-08 in June 2008.

Specific purpose payments direct to local governments

The Australian Government provides specific purpose payments direct to local governments to help fund local roads and infrastructure, child care programmes, and disability and other services administered by local governments. These payments will total $374 million in 2006-07 and increase to $557 million in 2007-08 (Table 13).

These payments mainly comprise a component of AusLink funding which assists local councils with upgrading and maintenance works on local roads. In 2007-08, the local government sector will receive $496 million under the AusLink programme.

MIRROR TAX ARRANGEMENTS

The Australian Government introduced mirror tax arrangements in 1998 to ensure that the States were not financially disadvantaged by the High Court decision in Allders International Pty Ltd v Commissioner of State Revenue (Victoria), which invalidated state taxes on Commonwealth places.

These arrangements mirror certain state taxes, including payroll taxes, land taxes and stamp duties, with respect to Commonwealth places.

The States collect these mirror taxes on behalf of the Australian Government and bear the administrative costs of collection. All mirror tax revenues are credited to the Australian Government and simultaneously appropriated to the States. Hence, mirror taxes are recorded as both Australian Government revenue and negative revenue, with no net impact on the Australian Government’s Budget.

Estimates of mirror taxes are provided in Table 15.

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Table 15: Mirror taxes accrued on behalf of the States Estimates Projections

$million 2006-07 2007-08 2008-09 2009-10 2010-11

Mirror taxes 353.3 370.8 391.4 413.6 437.6Payments to state governments -353.3 -370.8 -391.4 -413.6 -437.6Australian Government budget impact 0 0 0 0 0

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REFORM OF STATE TAXATION

BENEFITS FROM THE REFORM OF STATE TAXES

The GST was introduced to replace several inefficient indirect taxes — one Commonwealth tax and ten state taxes. The state taxes included in the Intergovernmental Agreement were nominated by the States themselves as being undesirable on efficiency and equity grounds.

Implementation of the Intergovernmental Agreement has already delivered significant economic benefits as a result of abolishing a first tranche of inefficient state taxes from as early as 1 July 2000. The value of the revenue foregone from the abolition of these inefficient taxes is estimated to be $4.1 billion in 2007-08 (Table 16).

Table 16: State taxation revenues foregone as a result of reform(a) $million 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11

Tranche 1Financial institutions duty 1,196 1,359 1,413 1,470 1,529 1,591 1,655 1,722 1,792 1,864Debits tax 140 340 344 349 1,160 1,269 1,306 1,346 1,387 1,431Quoted marketable

securities duty 675 747 791 837 886 939 994 1,054 1,116 1,183Accomodation tax 79 80 86 91 97 106 115 125 136 148 161

Total - Tranche 1 79 2,091 2,531 2,639 2,753 3,681 3,913 4,081 4,257 4,443 4,639

Tranche 2Mortgage duty 17 223 277 384 477 776 1,051 1,356Rental duty 4 4 21 34 103 271 293 325 346Lease duty 3 39 42 50 64 80 103 140 196 212 225Non-quoted marketable

securities duty 12 20 27 32 46 59 90 136 151Cheque duty 3 9 12 12 13 13 14 14Non-real non-residential

conveyances duty 1 1 10 69 294Total - Tranche 2 3 39 58 94 345 434 650 962 1,379 1,806 2,385

Total state taxes abolished 82 2,130 2,589 2,733 3,098 4,115 4,564 5,043 5,636 6,249 7,025 (a) Includes all revenue foregone from the abolition of Intergovernmental Agreement taxes. The revenue

foregone is only included in the GMA once all States have abolished the tax. In 2006, the Australian Government agreed with the States on a schedule for the second tranche of state taxation reform. The schedule provides for the abolition of all but one of the remaining taxes listed in the Intergovernmental Agreement. The timetable for the abolition of state taxes is provided in Appendix E. The value of the revenue foregone from this second tranche of state taxation reform is estimated to be a further $1.0 billion in 2007-08 (Table 16). This benefit to consumers and business from the second tranche of tax reforms is expected to grow to $2.4 billion by 2010-11.

Notwithstanding the substantial state taxation revenues foregone from these reforms, the States are still receiving significant revenue windfalls, compared with the revenue

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they would have received had the previous Commonwealth-State financial arrangements continued (Table 17).

STAMP DUTY ON CONVEYANCES OF REAL NON-RESIDENTIAL PROPERTY

The States have so far refused to fulfil their commitments by agreeing on a timetable to abolish the final tax listed in the Intergovernmental Agreement — stamp duty on conveyances of real non-residential property. The abolition of this tax would save taxpayers $2.8 billion in 2007-08.

The cost of abolishing this tax from 1 July 2007 is shown in Table 17, together with the remaining revenue windfall to the States from tax reform and any BBA that may be required to ensure that no State is worse off relative to its position if the previous financial arrangements had continued. The Australian Government has indicated to the States that it would be willing to be flexible as to the timing and phasing of the abolition of this tax.

Table 17: Abolishing stamp duty on conveyances of real non-residential property $million NSW(a) VIC(a) QLD WA SA TAS(a) ACT NT Total

2007-08Current revenue gain 631 725 830 429 269 117 82 124 3,208Cost of abolition 884 579 505 600 143 33 40 25 2,809BBA required 253 0 0 171 0 0 0 0 424Revised revenue gain 0 146 326 0 126 84 42 98 822

2008-09

Current revenue gain 970 1,017 966 530 342 131 97 127 4,181Cost of abolition 958 589 540 600 161 33 41 26 2,948BBA required 0 0 0 70 0 0 0 0 70Revised revenue gain 12 428 426 0 181 98 56 102 1,302

2009-10 Current revenue gain 1,103 1,122 967 560 382 140 102 142 4,519Cost of abolition 1,039 593 578 600 166 35 42 26 3,079BBA required 0 0 0 40 0 0 0 0 40Revised revenue gain 64 528 389 0 216 106 60 116 1,479 (a) Australian Treasury estimates of the cost of abolition. Stamp duty on conveyances of real non-residential property is an inefficient tax that impedes the transfer of commercial property to its highest value use, and particularly impacts on small businesses, superannuation funds and smaller property investors. The Australian Government will continue to pursue the abolition of this tax.

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FISCAL DEVELOPMENTS IN THE STATES Most States are expected to record net operating surpluses in 2007-08 and over the forward estimates. After allowing for capital investment, most States are expected to record fiscal deficits in 2007-08 and over the forward estimates. As a consequence, net debt of the States is expected to rise from $10.7 billion in 2005-06 to $67.0 billion in 2009-10.

This section provides an overview of fiscal developments in the States. It provides context to the discussion of the Australian Loan Council in the next section.

STATE GENERAL GOVERNMENT SECTOR NET OPERATING BALANCE

The aggregate state general government sector net operating position is expected to be a small surplus in 2007-08, broadly in line with 2006-07 as a proportion of GDP (Chart 7). The significant fall in States’ operating balances, compared with 2005-06, largely reflects the impact of higher expenditures and slower revenue growth.

The net operating balance measures, in accrual terms, the gap between a government’s expenses and revenue for a given period. It provides a good indication of the sustainability of the existing level of government services. An operating surplus indicates that a government can finance the services it provides in a period using revenues derived in that period. An operating deficit indicates that a government must borrow or sell assets in order to finance services provided in a period.

Tasmania and the Australian Capital Territory expect to record operating deficits in 2007-08 and over the forward years.

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Chart 7: Individual state general government sector net operating balance(a)

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(a) States’ net operating balances are expressed as a percentage of Gross State Product (GSP) (left hand

axis) and the States’ aggregate net operating balance is expressed as a percentage of Gross Domestic Product (GDP) (right hand axis).

Sources: ABS cat. no. 5512.0, State 2006-07 mid-year reports, Northern Territory and Victoria 2007-08 Budgets and Treasury estimates.

Fiscal developments in the States

29

STATE GENERAL GOVERNMENT SECTOR FISCAL BALANCE

The aggregate state fiscal balance for the general government sector is estimated to be in deficit by 0.4 per cent of GDP in 2007-08 (Chart 8). Given the aggregate state operating balance is expected to be a small surplus in 2007-08, the aggregate state fiscal deficit arises from the funding of capital expenditure. The aggregate fiscal balance is expected to be in deficit over the forward years. Western Australia is the only State expected to have a fiscal surplus in 2007-08 and in the forward years, reflecting its large operating surpluses.

Chart 8: Individual state general government sector fiscal balance(a)

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fiscal balance is expressed as a percentage of GDP (right hand axis). Sources: ABS cat. no. 5512.0, State 2006-07 mid-year reports, Northern Territory and Victoria 2007-08 Budgets and Treasury estimates.

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The fiscal balance measures, in accrual terms, the gap between government savings plus net capital transfers, and investment in non-financial assets. A fiscal surplus indicates that a government is lending to other sectors. A fiscal deficit indicates that a government is borrowing.

Trends in the aggregate fiscal balance for the State/local general government, public non-financial corporations and non-financial public sectors are presented in Tables 1, 2 and 3 of Statement 12 in Budget Paper No. 1.

STATE GENERAL GOVERNMENT SECTOR CASH BALANCE

Similar to the fiscal balance, most States expect to record cash deficits in 2007-08 (Chart 9), reflecting funding of capital expenditure. The New South Wales general government sector moved into a cash deficit in 2006-07, although the recorded cash deficit in 2006-07 was substantially affected by a one-off contribution of $7.2 billion from the general government Liability Management Fund towards the defined benefits superannuation scheme. In aggregate, the general government sector cash position is expected to be a deficit of 0.3 per cent of GDP in 2007-08, compared to a 0.8 per cent deficit the previous year. The aggregate general government sector cash deficit is expected to continue over the forward years.


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Chart 9: Individual state general government sector cash balance(a)

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(a) States’ cash balances are expressed as a percentage of GSP (left hand axis) and the States’ aggregate

cash balance is expressed as a percentage of GDP (right hand axis). Sources: ABS cat. no. 5512.0, State 2006-07 mid-year reports, Northern Territory and Victoria 2007-08 Budgets and Treasury estimates.

A cash surplus reflects the extent to which cash is available to a government to increase financial assets or decrease liabilities (assuming no revaluations or other changes occur). A cash deficit measures the extent to which a government requires cash, either by running down financial assets or by borrowing.

Trends in the aggregate cash surplus for the State/local general government, public non-financial corporations and the non-financial public sectors are presented in Chart 2 of Statement 12 in Budget Paper No. 1.

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STATE NET DEBT

Most States are forecasting an increase in general government sector net debt in 2007-08 and the forward years as they borrow to finance significant capital expenditure programmes (Chart 10). Queensland, Western Australia, Tasmania and the Australian Capital Territory are the only States to forecast a net debt position below zero in 2007-08 and the forward years.

Net debt is the sum of selected financial liabilities (deposits held, advances received, government securities, loans and other borrowing) less the sum of selected financial assets (cash and deposits, advances paid, and investments, loans and placements). Net debt does not include superannuation related liabilities.

The higher the net debt of a government, the greater the call that will be imposed on the government’s future revenue flows to service that debt.

In aggregate, the state general government sector continues to record net debt levels below zero. Its net debt is expected to be -1.3 per cent of GDP in 2007-08, falling to -0.5 per cent of GDP by 2009-10.

Net debt for the aggregate state public non-financial corporations sector is estimated to be 4.7 per cent of GDP in 2006-07, up from 4.2 per cent in 2005-06. The public non-financial corporations sector owns nearly all of the stock of state non-financial public net debt.

In aggregate, net debt of the state total non-financial public sector (which combines general government and public non-financial corporations) will increase from 1.1 per cent of GDP in 2005-06 to 5.7 per cent in 2009-10, an increase of $56.4 billion.


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Chart 10: Individual state net debt by sector (as at end of financial year)(a) General government

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-15

-10

-5

0

5

10

15

20

25

1999-00 2004-05 2009-10-15

-10

-5

0

5

10

15

20

25

NSW

Vic

WA

All States

Qld


-15

-10

-5

0

5

10

15

20

25

1999-00 2004-05 2009-10-15

-10

-5

0

5

10

15

20

25

All States

SA

NTTas

ACT


(a) States’ net debt is expressed as a percentage of GSP (left hand axis) and the States’ aggregate net debt

is expressed as a percentage of GDP (right hand axis). Sources: ABS cat. no. 5512.0, State 2006-07 mid-year reports, Northern Territory and Victoria 2007-08 Budgets and Treasury estimates.

35

THE AUSTRALIAN LOAN COUNCIL The Australian Loan Council is a Commonwealth-State ministerial council that coordinates public sector borrowing. The Loan Council consists of the Prime Minister of Australia and the Premier/Chief Minister of each State and Territory. However, in practice each member is represented by a nominee, usually the Treasurer of that jurisdiction, with the Australian Treasurer as Chairman.

Current Loan Council arrangements operate on a voluntary basis and emphasise transparency of public sector financing rather than adherence to strict borrowing limits. These arrangements are designed to enhance financial market scrutiny of public sector borrowing and facilitate informed judgments about each government’s financial performance.

The Loan Council traditionally meets annually in March to consider jurisdictions’ nominated borrowings for the forthcoming year. As part of the agreed arrangements, the Loan Council considers these nominations, having regard to each jurisdiction’s fiscal position and the macroeconomic implications of the aggregate figure.

OUTCOME OF THE 2007 AUSTRALIAN LOAN COUNCIL

The Loan Council met on 30 March 2007 to consider Loan Council nominations for 2007-08. The Loan Council approved each jurisdiction’s nominated allocation. In aggregate, the nominations represent a surplus of $4.3 billion (Table 18). The States nominated a deficit of $12.8 billion and the Australian Government nominated a surplus of $17.2 billion.

36

Budget Paper No. 3

Tabl

e 18

: Loa

n C

ounc

il A

lloca

tion

(LC

A) n

omin

atio

ns fo

r 200

7-08

(a)

NS

WV

ICQ

LDW

AS

ATA

SA

CT

NT

A/G

ovTo

tal

$m$m

$m$m

$m$m

$m$m

$m$m

Nom

inat

ed 2

007-

08 L

CAs

Gen

eral

gov

ernm

ent s

ecto

r cas

h de

ficit(

+)/s

urpl

us(-)

1,60

461

399

5-3

6325

9-8

5-6

40-1

2,73

6P

NFC

sec

tor c

ash

defic

it(+)

/sur

plus

(-)3,

395

1,55

34,

694

778

2814

839

488

2N

on-fi

nanc

ial p

ublic

sec

tor c

ash

defic

it(+)

/sur

plus

(-)(b

)4,

988

2,17

95,

688

415

287

6334

44-1

1,85

4m

inus

N

et c

ash

flow

s fro

m in

vest

men

ts

in

finan

cial

ass

ets

for p

olic

y pu

rpos

es(c

)-5

02

00

-6-3

-10

4,87

8pl

us

M

emor

andu

m it

ems(

d)-3

0918

077

-564

-307

21-6

0-4

31Lo

an C

ounc

il Al

loca

tion

4,72

92,

357

5,76

5-1

49-1

487

2944

-17,

163

-4,3

1520

07-0

8 to

lera

nce

limit

1,19

371

982

445

524

610

960

725,

744

(a

) LC

A no

min

atio

ns fo

r 200

7-08

refle

ct c

urre

nt b

est e

stim

ates

of n

on-fi

nanc

ial p

ublic

sec

tor d

efic

its/s

urpl

uses

. Nom

inat

ions

hav

e be

en p

rovi

ded

on th

e ba

sis

of p

olic

ies

anno

unce

d up

to

and

incl

uded

in ju

risdi

ctio

ns’ m

id-y

ear

repo

rts.

Nom

inat

ions

are

bas

ed o

n pr

elim

inar

y es

timat

es o

f ge

nera

l gov

ernm

ent

finan

ces

prov

ided

by

juris

dict

ions

for

purp

oses

of t

heir

mid

-yea

r re

ports

, and

pro

ject

ed b

otto

m li

nes

for

each

juris

dict

ion’

s pu

blic

non

-fina

ncia

l cor

pora

tions

(PN

FC)

sect

or, w

here

act

ual

estim

ates

are

una

vaila

ble.

Eac

h ju

risdi

ctio

n w

ill pu

blis

h an

upd

ated

LC

A e

stim

ate

as p

art o

f its

bud

get d

ocum

enta

tion.

The

2 p

er c

ent (

of n

on-fi

nanc

ial p

ublic

sec

tor

cash

rec

eipt

s fro

m o

pera

ting

activ

ities

in

each

jur

isdi

ctio

n) t

oler

ance

lim

its a

roun

d ea

ch j

uris

dict

ion’

s 20

07-0

8 LC

A ar

e de

sign

ed,

inte

r al

ia,

to a

ccom

mod

ate

chan

ges

to th

e LC

A re

sulti

ng fr

om c

hang

es in

pol

icy.

(b

) Th

e su

m o

f the

sur

plus

es o

f the

gen

eral

gov

ernm

ent a

nd P

NFC

sec

tors

may

not

dire

ctly

equ

al th

e no

n-fin

anci

al p

ublic

sec

tor s

urpl

us d

ue to

inte

rsec

tora

l tra

nsfe

rs.

(c)

This

com

pris

es n

et le

ndin

g by

gov

ernm

ents

with

the

aim

of a

chie

ving

gov

ernm

ent p

olic

y, a

s w

ell a

s ne

t equ

ity s

ales

and

net

lend

ing

to o

ther

sec

tors

or j

uris

dict

ions

. Su

ch tr

ansa

ctio

ns in

volv

e th

e tra

nsfe

r or

exc

hang

e of

a fi

nanc

ial a

sset

and

are

not

incl

uded

with

in th

e ca

sh d

efic

it. H

owev

er,

the

cash

flow

fro

m in

vest

men

ts in

fin

anci

al a

sset

s fo

r pol

icy

purp

oses

has

impl

icat

ions

for g

over

nmen

ts’ c

all o

n fin

anci

al m

arke

ts. T

he A

ustra

lian

Gov

ernm

ent’s

est

imat

es in

clud

e ca

sh fl

ows

from

the

sale

of T

elst

ra.

(d)

Mem

oran

dum

item

s ar

e us

ed to

adj

ust t

he n

on-fi

nanc

ial p

ublic

sec

tor d

efic

it/su

rplu

s to

incl

ude

in L

CAs

cer

tain

tran

sact

ions

— s

uch

as o

pera

ting

leas

es —

that

hav

e m

any

of t

he c

hara

cter

istic

s of

pub

lic s

ecto

r bo

rrow

ings

but

do

not

cons

titut

e fo

rmal

bor

row

ings

. Th

ey a

re a

lso

used

, w

here

app

ropr

iate

, to

ded

uct

from

the

no

n-fin

anci

al p

ublic

sec

tor

defic

it/su

rplu

s ce

rtain

tran

sact

ions

that

the

Loan

Cou

ncil

has

agre

ed s

houl

d no

t be

incl

uded

in L

CA

s, fo

r ex

ampl

e, th

e fu

ndin

g of

mor

e th

an e

mpl

oyer

s’ e

mer

ging

cos

ts u

nder

pub

lic s

ecto

r su

pera

nnua

tion

sche

mes

, or

borro

win

gs b

y en

titie

s su

ch a

s st

atut

ory

mar

ketin

g au

thor

ities

. Whe

re r

elev

ant,

mem

oran

dum

item

s in

clud

e an

am

ount

for g

ross

new

bor

row

ings

of g

over

nmen

t hom

e fin

ance

sch

emes

.

37

APPENDIX A: PARAMETERS AND FURTHER INFORMATION

Parameter estimates used in this Budget Paper Table A1 sets out the population series used in this Budget Paper.

Table A1: Population by State Millions NSW VIC QLD WA SA TAS ACT NT Total

2006-07 6.864 5.128 4.090 2.073 1.562 0.490 0.331 0.208 20.7462007-08 6.929 5.198 4.166 2.114 1.574 0.493 0.334 0.211 21.020 The state populations for 2006-07 and 2007-08 are projections of the population of each State on 31 December in the respective year constructed using the latest demographic data available and Australian Treasury assumptions. Broadly, these assumptions are in respect of fertility, mortality, net overseas migration and interstate migration.

There is a risk that the population projection for 2006-07 may differ materially from the population to be determined by the Australian Statistician in June 2007. This is because the 2007 determination will take account of new information from the 2006 Census of Population and Housing and a new net overseas migration estimation methodology.

Table A2 sets out the parameters used in this paper, rounded to the nearest quarter.

Table A2: Parameters used in this Budget Paper Per cent growth CPI(a) Population

2006-07 3 1/2 1 1/22007-08 2 1/4 1 1/4 (a) Defined in section 8 of the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999. Some data presented in this paper are drawn from the Commonwealth Grants Commission’s Report on State Revenue Sharing Relativities — 2007 Update, 2006-07 state mid-year budget updates and 2007-08 state budgets where available.

Further information Several publications of the Australian Bureau of Statistics also provide information that is relevant to analysing federal financial relations, including:

• Taxation Revenue, Australia (cat. no. 5506.0);

• Government Finance Statistics, Australia (cat. no. 5512.0);

• Australian System of Government Finance Statistics — Concepts, Sources and Methods (cat. no. 5514.0);

Budget Paper No. 3

38

• Information Paper: Developments in Government Finance Statistics (cat. no. 5516.0); and

• Information Paper: Accruals-Based Government Finance Statistics (cat. no. 5517.0).

39

APPENDIX B: GUARANTEED MINIMUM AMOUNT The guaranteed minimum amount (GMA) is calculated using a methodology agreed by the States. The amount of each State’s GMA comprises estimates of Australian Government financial assistance grants foregone, state taxes abolished by taxation reform and other items. Revenue foregone from the abolition of state taxes is only included in the calculation of GMA once all States have abolished the tax.

The Australian Government continues to guarantee that, in each of the transitional years following the introduction of The New Tax System in July 2000, the budgetary position of each State will be no worse off than if the financial reforms had not been implemented. The Australian Government has extended the transitional period for a further three years until 30 June 2009.

Where the GMA for a state exceeds the GST revenue entitlement for that state, budget balancing assistance (BBA) is payable by the Australian Government to cover the shortfall.

Prior to taxation reform, financial assistance grants were distributed among the States according to the principle of horizontal fiscal equalisation, as embodied in relativities recommended by the Commonwealth Grants Commission. As financial assistance grants foregone are included as a component of the GMA, the Commission continues to calculate relativities for the notional allocation of these grants between the States. The relativities for 2006-07 and 2007-08 are show in Table B1.

Table B1: Financial assistance grants relativities, 2006-07 and 2007-08 NSW VIC QLD WA SA TAS ACT NT

2006-07(a) 0.80893 0.87406 1.05636 0.96845 1.28415 1.75660 1.17823 5.478332007-08 0.82028 0.87572 1.04406 0.88815 1.32813 1.79171 1.18808 5.66456 (a) These relativities take account of amended data provided by South Australia after the release of the

Commonwealth Grants Commission’s 2006 report. The detailed calculation of the GMA, GST revenue entitlement and the BBA required for each State are shown in Tables B2 and B3 for 2006-07 and 2007-08 respectively.

Budget Paper No. 3

40

Tabl

e B

2: G

uara

ntee

d m

inim

um a

mou

nt, G

ST re

venu

e pr

ovis

ion

and

budg

et b

alan

cing

ass

ista

nce

in 2

006-

07

$mill

ion

NS

WV

ICQ

LDW

AS

ATA

SA

CT

NT

Tota

l

Stat

e re

venu

es fo

rego

neFi

nanc

ial a

ssis

tanc

e gr

ants

5,62

4.9

4,77

3.7

4,93

9.0

2,21

6.4

2,34

9.2

1,12

6.5

485.

01,

635.

723

,150

.3R

even

ue re

plac

emen

t pay

men

ts2,

838.

01,

898.

61,

718.

71,

178.

873

6.5

249.

612

6.3

159.

58,

906.

0Fi

nanc

ial i

nstit

utio

ns d

uty

808.

743

5.4

na16

6.4

111.

226

.021

.521

.51,

590.

7D

ebits

tax

357.

028

3.9

385.

012

6.5

63.6

24.2

19.8

8.6

1,26

8.7

Mar

keta

ble

secu

ritie

s du

ty54

4.9

281.

830

.134

.818

.60.

826

.61.

293

8.8

Mar

keta

ble

secu

ritie

s du

ty n

eeds

-24.

812

.613

.32.

41.

02.

9-8

.30.

80.

0A

ccom

mod

atio

n ta

xes

104.

7na

nana

nana

na10

.511

5.3

Che

que

duty

nana

na5.

53.

2na

na2.

811

.4pl

usR

educ

ed re

venu

esG

ambl

ing

taxe

s66

2.5

424.

627

9.5

80.5

109.

628

.123

.833

.01,

641.

5pl

usIn

tere

st c

osts

In

tere

st c

osts

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

plus

Addi

tiona

l exp

endi

ture

sFi

rst h

ome

owne

rs s

chem

e31

8.7

266.

721

5.0

94.7

72.2

20.2

19.0

8.8

1,01

5.3

GS

T ad

min

istra

tion

cost

s20

4.6

152.

912

1.9

61.8

46.6

14.6

9.9

6.2

618.

5pl

usO

ther

item

sW

ST

paym

ents

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

min

usR

educ

ed e

xpen

ditu

res

Off-

road

die

sel s

ubsi

dies

149.

963

.315

2.0

194.

639

.92.

40.

04.

360

6.5

Sav

ings

from

tax

refo

rm21

8.0

154.

212

3.0

72.1

53.3

18.2

10.9

15.9

665.

6Lo

w a

lcoh

ol b

eer s

ubsi

dies

27.5

19.1

5.4

8.7

5.1

1.9

1.1

1.3

70.2

min

usG

row

th d

ivid

end

Rem

aini

ng s

tate

taxe

s17

4.0

112.

358

.835

.028

.27.

25.

53.

942

4.8

min

usC

ompe

nsat

ion

paym

ents

Com

pens

atio

n fo

r GS

T de

ferra

l0.

00.

00.

00.

00.

00.

00.

00.

00.

0pl

usAd

just

men

ts20

05-0

6 G

MA

adj

ustm

ent

2.8

-58.

44.

6-6

.02.

50.

60.

83.

5-4

9.6

Tota

l GM

A(1

)10

,872

.78,

122.

87,

368.

03,

651.

33,

387.

61,

463.

970

7.0

1,86

6.7

37,4

39.9

GST

reve

nue

prov

isio

n (2

)11

,034

.28,

572.

88,

049.

03,

977.

93,

590.

81,

573.

376

8.3

1,98

5.4

39,5

51.7

BB

A (1

)-(2)

(a)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

(a

) W

here

the

diffe

renc

e be

twee

n th

e G

MA

and

GST

reve

nue

is le

ss th

an z

ero,

the

amou

nt is

zer

o.

Appendix B: Guaranteed minimum amount

41

Tabl

e B

3: G

uara

ntee

d m

inim

um a

mou

nt, G

ST re

venu

e pr

ovis

ion

and

budg

et b

alan

cing

ass

ista

nce

in 2

007-

08

$mill

ion

NS

WV

ICQ

LDW

AS

ATA

SA

CT

NT

Tota

l

Stat

e re

venu

es fo

rego

neFi

nanc

ial a

ssis

tanc

e gr

ants

5,91

6.9

4,95

9.6

5,06

6.4

2,04

6.4

2,53

2.2

1,18

8.1

505.

71,

765.

023

,980

.5R

even

ue re

plac

emen

t pay

men

ts2,

920.

41,

953.

51,

767.

51,

210.

275

7.4

256.

513

0.1

163.

99,

159.

5Fi

nanc

ial i

nstit

utio

ns d

uty

847.

144

8.5

na17

1.9

115.

226

.622

.023

.51,

654.

9D

ebits

tax

361.

128

6.7

411.

612

8.7

64.3

24.7

20.3

8.7

1,30

6.2

Mar

keta

ble

secu

ritie

s du

ty57

8.7

298.

831

.236

.819

.70.

827

.21.

299

4.5

Mar

keta

ble

secu

ritie

s du

ty n

eeds

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Acc

omm

odat

ion

taxe

s11

4.2

nana

nana

nana

11.1

125.

4C

hequ

e du

tyna

nana

6.0

3.4

nana

3.3

12.8

plus

Red

uced

reve

nues

Gam

blin

g ta

xes

635.

542

4.9

293.

681

.710

7.0

29.1

24.8

35.1

1,63

1.7

plus

Inte

rest

cos

ts

Inte

rest

cos

ts0.

00.

00.

00.

00.

00.

00.

00.

00.

0pl

usAd

ditio

nal e

xpen

ditu

res

Firs

t hom

e ow

ners

sch

eme

320.

426

8.1

216.

295

.372

.620

.319

.18.

81,

020.

8G

ST

adm

inis

tratio

n co

sts

209.

615

7.3

126.

064

.047

.614

.910

.16.

463

5.9

plus

Oth

er it

ems

WS

T pa

ymen

ts0.

00.

00.

00.

00.

00.

00.

00.

00.

0m

inus

Red

uced

exp

endi

ture

sO

ff-ro

ad d

iese

l sub

sidi

es15

1.9

64.5

155.

519

9.3

40.4

2.4

0.0

4.4

618.

4S

avin

gs fr

om ta

x re

form

232.

516

4.5

131.

276

.956

.819

.411

.617

.071

0.0

Low

alc

ohol

bee

r sub

sidi

es28

.219

.55.

58.

95.

21.

91.

11.

471

.7m

inus

Gro

wth

div

iden

dR

emai

ning

sta

te ta

xes

196.

512

6.8

66.4

39.6

31.9

8.1

6.2

4.4

479.

8m

inus

Com

pens

atio

n pa

ymen

tsC

ompe

nsat

ion

for G

ST

defe

rral

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Tota

l GM

A(1

)11

,294

.98,

422.

17,

554.

03,

516.

43,

585.

11,

529.

374

0.4

2,00

0.0

38,6

42.2

GST

reve

nue

prov

isio

n (2

)11

,926

.39,

147.

08,

384.

33,

945.

43,

854.

61,

646.

382

2.6

2,12

3.5

41,8

50.0

BB

A(1

)-(2)

(a)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

(a

) W

here

the

diffe

renc

e be

twee

n th

e G

MA

and

GST

reve

nue

is le

ss th

an z

ero,

the

amou

nt is

zer

o.

43

APPENDIX C: GST REVENUE POLICY DECISIONS

Compulsory third party schemes — alternative global decreasing adjustment methodology Revenue ($m)

2007-08 2008-09 2009-10 2010-11 Australian Taxation Office 6.7 6.7 6.7 6.7

The Government will not proceed with the measure announced in the 2005-06 Budget to allow compulsory third party (CTP) insurers to use a further methodology to calculate decreasing adjustments when settling claims under CTP insurance schemes.

Debt collection enhancement — reducing taxation debt and outstanding superannuation guarantee charge payments Revenue ($m)

2007-08 2008-09 2009-10 2010-11 Australian Taxation Office 5.0 20.0 20.0 20.0

The Government will provide additional funding to the Australian Taxation Office, including $15.2 million in relation to GST administration, to help reduce the existing stock of taxation debt and outstanding superannuation guarantee charge payments owed by employers. The States have agreed to reimburse the Government for the additional GST administration expense.

The enhanced debt recovery is expected to result in additional GST revenue of $65 million over four years. Total GST cash collections, including amounts previously recognised as revenue, are expected to increase by $450 million over four years. These additional collections will be paid to the States.

See also the related expense measure titled Debt collection enhancement — reducing taxation debt and outstanding superannuation guarantee charge payments in Budget Paper No. 2 in the Treasury portfolio.

Employee share schemes that provide stapled securities Revenue ($m)

2007-08 2008-09 2009-10 2010-11 Australian Taxation Office -0.1 -0.1 -0.1 -0.1

The Government has extended the GST exemption for services acquired offshore in relation to an employee share scheme, to include employee share schemes that provide stapled securities, with effect from 1 July 2006.

Budget Paper No. 3

44

Imported services used to make input taxed supplies are generally subject to the GST ‘reverse charge’. A reverse charge means that the Australian recipient of the supply is liable for GST on the imported service, rather than the overseas supplier. The reverse charge does not apply to imported services relating to employee share schemes.

This measure ensures that imported services relating to employee share schemes that provide stapled securities attract the same GST treatment as imported services relating to other employee share schemes.

This measure relates to the 2006-07 Budget measure titled Employee share schemes — extending current concessions to stapled securities (Budget Paper No. 2, Budget Measures 2006-07).

Expand the range of goods in inwards duty free stores Revenue ($m)


The Government will relax the current restrictions on the range of goods available for sale in inwards duty free stores. The type of goods available for sale will be limited by size, weight and the value of the duty free passenger concession. The changes will take effect from the date that the applicable customs regulation is amended.

The range of goods currently available for sale in inwards duty free stores is restricted. This measure will allow travellers, on arrival in Australia, to purchase a broader range of goods that are able to be carried as part of their hand luggage, up to a value of $900.

The measure will increase convenience for inward travellers purchasing duty free goods.

See also the related revenue measure titled Expand the range of goods in inwards duty free stores in Budget Paper No. 2 in the Attorney-General’s portfolio.

GST car concession for certain injured defence personnel Revenue ($m)

2007-08 2008-09 2009-10 2010-11 Australian Taxation Office - - - -

The Government has extended the GST-free motor vehicle concession to include everyone who is eligible to receive the Special Rate Disability Pension under the Military Rehabilitation and Compensation Act 2004, with effect from 1 July 2004.

This measure enhances the Government’s 2004-05 Budget announcement that it would extend the GST-free motor vehicle concession to include severely injured veterans

Appendix C: GST revenue policy decisions

45

under the Military Rehabilitation and Compensation Scheme. Before the 2004-05 Budget announcement, only those veterans who had lost (or effectively lost) a leg or both arms, and who were in receipt of a Totally and Permanently Incapacitated Pension under the Veterans’ Entitlements Act 1986, were entitled to the concession.

GST concessions for the International Criminal Court Revenue ($m)

2007-08 2008-09 2009-10 2010-11 Australian Taxation Office .. .. .. ..

The Government will provide the International Criminal Court (ICC) and certain of its officials with GST concessions that are consistent with the Agreement on the Privileges and Immunities of the International Criminal Court. The measure will have effect from the commencement of the Agreement.

Under the Agreement, the ICC is entitled to GST relief on major purchases of goods and services and on property purchases. ICC officials are entitled to certain GST concessions. The GST concessions will not be available to individuals who are Australian nationals or permanent residents.

Increasing the GST registration turnover threshold Revenue ($m)


The annual turnover thresholds for registration for the GST will be raised to $75,000 for businesses and to $150,000 for non-profit bodies, with effect from 1 July 2007.

As a result of this measure, businesses and non-profit bodies with a turnover between the present threshold ($50,000 or $100,000) and the proposed threshold ($75,000 or $150,000) will no longer be required to register for GST. Those that voluntarily register for GST will have the option of remitting GST annually, rather than quarterly or monthly.

The new thresholds are in line with recommendation 5.38 of Rethinking Regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business. See also the related revenue measure titled Increasing the GST registration turnover threshold in Budget Paper No. 2 in the Treasury portfolio and the item titled PAYG instalments paid annually when voluntarily registered for GST.

This measure is subject to the unanimous agreement of the States.

Budget Paper No. 3

46

Increasing the threshold for requiring an approved tax invoice for GST Revenue ($m)


Businesses will be allowed to claim input tax credits for purchases with a GST-exclusive value of $75 or less without the need for an approved tax invoice, with effect from 1 July 2007.

To claim an input tax credit, businesses currently have to obtain an approved tax invoice for all purchases with a GST-exclusive value greater than $50. For purchases with a GST-exclusive value of $50 or less, the documentation required for income tax purposes is sufficient to claim an input tax credit.

The increase in the threshold for requiring an approved tax invoice to claim an input tax credit to $75 will reduce business compliance costs.


See also the related revenue measure titled Increasing the threshold for requiring an approved tax invoice for GST in Budget Paper No. 2 in the Treasury portfolio.

International telecommunications services Revenue ($m)


The Government will ensure that certain international telecommunications services, including global roaming services, will remain GST-free, with effect from 1 July 2000.

The measure will confirm the GST-free status of such supplies and provide certainty to telecommunication providers.

The measure will ensure that Australia’s GST treatment of international telecommunications supplies will remain consistent with Australia’s obligations under the International Telecommunication Regulations (the Melbourne Agreement).


Appendix C: GST revenue policy decisions

47

PAYG instalments paid annually when voluntarily registered for GST Revenue ($m)

2007-08 2008-09 2009-10 2010-11 Australian Taxation Office - -35.0 -5.0 -5.0

The Government will align the pay as you go (PAYG) payment and reporting requirements with the annual payment and reporting requirements for taxpayers who are voluntarily registered for GST, with effect from 1 July 2008.

Currently, taxpayers can remit PAYG annually only if they are not registered for GST and they meet other eligibility requirements. This measure will allow taxpayers who voluntarily register for GST, and who report and pay GST on an annual basis, to meet their PAYG obligations on an annual basis, subject to the other eligibility tests. The increased scope for taxpayers to lodge PAYG instalments on an annual basis will encourage some taxpayers that are currently remitting GST on a quarterly basis to shift to an annual basis. The annual GST election has already been agreed to by the States.

The measure will reduce the compliance costs of eligible taxpayers, as they will be able to lodge only one Business Activity Statement per year.

See also the related revenue measure titled PAYG instalments paid annually when voluntarily registered for GST in Budget Paper No. 2 in the Treasury portfolio and the item titled Increasing the GST registration turnover threshold.

Pharmaceutical concession for certain defence personnel Revenue ($m)


The Government has allowed drugs, medicines and other pharmaceutical items to be GST-free when supplied on prescription as pharmaceutical benefits under the Military Rehabilitation and Compensation Act 2004, with effect from 1 July 2004.

The measure ensures consistency with the GST-free treatment of drugs, medicines and other pharmaceutical items supplied as pharmaceutical benefits under the Veterans’ Entitlements Act 1986.

Simplified accounting methods — extending availability Revenue ($m)


The Commissioner of Taxation will have power to develop simplified accounting methods (SAMs) for all entities with an annual turnover of less than $2 million that

Budget Paper No. 3

48

make mixed supplies — taxable and GST-free — or mixed purchases, with effect from 1 July 2007.

Currently, SAMs are restricted to retailers that sell food and to charities that make GST-free supplies. Under this measure, businesses will be able to approach the Australian Taxation Office to initiate the development of a SAM to simplify their GST calculations and reduce their compliance costs.


See also the related revenue measure titled Simplified accounting methods — extending availability in Budget Paper No. 2 in the Treasury portfolio.

Tourist Refund Scheme — introducing private providers and enhancements to tax-free shopping Revenue ($m)


Proposed changes to the operation of tourist shopping arrangements will be made to enhance their effectiveness by:

• enabling private providers to provide tourist refunds — with approval for refunds and compliance to remain a government function — with effect from 1 February 2008;

• extending the period during which travellers can purchase goods and be eligible to claim a refund of GST and wine equalisation tax through the Tourist Refund Scheme (TRS) from 30 days to 60 days;

• allowing travellers using the TRS to aggregate multiple invoices from single retailers in order to meet the $300 threshold for TRS claims; and

• extending the period during which travellers can make tax-free purchases through the sealed bag system from 30 days to 60 days.

The changes to the TRS (other than introducing private providers) and to the sealed bag system require the unanimous agreement of the States. These changes will be implemented as soon as practicable after that agreement is received.

See also the related revenue measure titled Tourist Refund Scheme — introducing private providers and enhancements to tax-free shopping in Budget Paper No. 2 in the Treasury portfolio.

49

APPENDIX D: SPECIFIC PURPOSE PAYMENTS This appendix provides accrual estimates of Australian Government specific purpose payments to and through the States and direct to local government. This includes payments for current and capital purposes, and Australian Government advances (loans) to the States, including new advances, interest on advances and repayments by the States. Most of these advances were funded from borrowings made on behalf of the States under previous Australian Loan Council arrangements.

Table D1 presents specific purpose payments on a functional basis for the period 2006-07 to 2010-11. Payments are categorised according to like purposes and are divided into those paid to the States and those paid through the States to be passed on to local government and other organisations. Payments through the States are indicated in the table with an asterisk.

Tables D2 and D3 present state distributions of the payments listed in Table D1, for the years 2006-07 and 2007-08 respectively.

Several agreements with the States are due for negotiation during the forward estimates period. Provision has been made for continued funding in the forward estimates. However, the extension of these agreements has not been negotiated and therefore the amounts payable under the agreements cannot be specifically identified. In these cases, the relevant sections of the tables have been marked ‘nfp’ — not for publication.

Final decisions on the distribution between the States of some payments are still to be taken by the Australian Government. For others, the final distribution for 2007-08 will not be settled until further data becomes available. In most instances, provisional or notional estimates of the distribution are included. This does not commit the Australian Government to fund a particular project or indicate that a State has agreed to participate in the programme.

Tables D4, D5 and D6 present estimates of Australian Government specific purpose payments direct to local government authorities. Table D4 presents estimates on a functional basis for the period 2006-07 to 2010-11. Tables D5 and D6 present estimates of state distributions of payments direct to local government for 2006-07 and 2007-08.

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00)

Func

tion

Paym

ent t

itle

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

Des

crip

tion

SPEC

IFIC

PU

RPO

SE P

AYM

ENTS

- C

UR

REN

T PU

RPO

SES

Publ

ic O

rder

and

Saf

ety

Lega

l aid

(a)

39,5

3741

,028

nfp

nfp

nfp

Fund

ing

is p

rovi

ded

to S

tate

and

Ter

ritor

ies'

lega

l aid

com

mis

sion

s fo

r the

pro

visi

on o

f leg

alas

sist

ance

in A

ustra

lian

Gov

ernm

ent m

atte

rs.

Film

and

lite

ratu

re c

lass

ifica

tions

817

833

850

867

884

Pay

men

t to

Sta

tes

and

Terr

itorie

s fo

r par

ticip

atio

n in

the

Coo

pera

tive

Nat

iona

l Cen

sors

hip

Sch

eme

as p

er th

e in

ter-

gove

rnm

enta

l agr

eem

ent s

igne

d on

28

Nov

embe

r 199

5.

Cla

ssifi

catio

n de

cisi

ons

are

mad

e in

acc

orda

nce

with

the

Cla

ssifi

catio

n (P

ublic

atio

ns,

Film

s an

d C

ompu

ter G

ames

) Act

199

5 a

nd th

e N

atio

nal C

lass

ifica

tions

Cod

e.

Com

plem

enta

ry e

nfor

cem

ent a

rran

gem

ents

are

in p

lace

with

all

Sta

tes

and

Terr

itorie

s.Im

prov

ing

polic

ing

in v

ery

rem

ote

area

s4,

467

15,2

3422

,265

384

0To

add

ress

vio

lenc

e an

d ch

ild a

buse

in in

dige

nous

com

mun

ities

, the

Aus

tralia

n G

over

nmen

t is

prov

idin

g as

sist

ance

to th

e S

tate

s an

d th

e N

orth

ern

Terr

itory

for t

he

cons

truct

ion

of p

olic

e st

atio

ns a

nd re

late

d in

frast

ruct

ure

incl

udin

g po

lice

hous

ing,

and

fo

r add

ition

al s

niffe

r dog

team

s to

redu

ce th

e us

e of

illic

it su

bsta

nces

in s

ome

indi

geno

us

com

mun

ities

.C

ole

Inqu

iry T

ask

Forc

e60

00

00

0Fu

ndin

g to

the

Vic

toria

n P

olic

e an

d th

e V

icto

rian

Offi

ce o

f Pub

lic P

rose

cutio

ns fo

r the

iras

sist

ance

to th

e Ta

sk F

orce

with

the

inve

stig

atio

ns a

nd in

vest

igat

ion

outc

omes

of

poss

ible

bre

ache

s of

the

Crim

es A

ct 1

914

, the

Crim

inal

Cod

e, th

e V

icto

rian

Crim

es A

ct a

nd

fore

ign

exch

ange

regu

latio

ns b

y ke

y st

akeh

olde

rs o

f the

Aus

tralia

n W

heat

Boa

rd.

Illeg

al fo

reig

n fis

hing

- in

dige

nous

rang

ers

tria

l28

20

00

0To

con

tribu

te to

a tw

elve

-mon

th tr

ial i

nvol

ving

mem

bers

of a

Wes

tern

Aus

tralia

n in

dige

nous

com

mun

ity to

car

ryou

t sur

veill

ance

act

iviti

es in

the

coas

tal w

ater

s of

nor

ther

n A

ustra

lia a

nd to

repo

rt si

ghtin

gs o

f ille

gal f

orei

gn fi

shin

g ve

ssel

s.

Crim

Trac

Pol

ice

Ref

eren

ce S

yste

m4,

000

5,31

80

00

Pay

men

ts to

the

Sta

te a

nd T

errit

orie

s fo

r the

ir co

ntrib

utio

n to

war

d a

natio

nal i

nfor

mat

ion

shar

ing

solu

tion

thro

ugh

the

deve

lopm

ent o

f the

Crim

Trac

Pol

ice

Ref

eren

ce S

yste

m.

Budget Paper No. 3

50

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SEd

ucat

ion

Gov

ernm

ent s

choo

ls(a

)1,

795,

605

1,93

1,58

1nf

pnf

pnf

pP

rovi

des

supp

lem

enta

ry a

ssis

tanc

e to

Sta

te a

nd T

errit

ory

educ

atio

n au

thor

ities

thro

ugh

per c

apita

gen

eral

recu

rren

t gra

nts

whi

ch c

an b

e ap

plie

d to

sta

ff sa

larie

s, te

ache

r pr

ofes

sion

al d

evel

opm

ent,

curr

icul

um d

evel

opm

ent a

nd m

aint

enan

ce a

nd g

ener

al

oper

atio

nal p

rovi

sion

s.* N

on-g

over

nmen

t sch

ools

(a)

5,08

2,26

55,

509,

193

nfp

nfp

nfp

Pro

vide

s su

pple

men

tary

ass

ista

nce

to n

on-g

over

nmen

t sch

ools

and

sys

tem

s th

roug

h pe

r cap

ita g

ener

al re

curr

ent g

rant

s w

hich

can

be

appl

ied

to s

taff

sala

ries,

teac

her

prof

essi

onal

dev

elop

men

t, cu

rric

ulum

dev

elop

men

t and

mai

nten

ance

and

gen

eral

op

erat

iona

l pro

visi

ons.

Skill

ing

Aus

tral

ia's

Wor

kfor

ce(a

)1,

239,

776

1,25

6,37

2nf

pnf

pnf

pFu

nds

are

used

to p

rom

ote

a na

tiona

l voc

atio

nal e

duca

tion

and

train

ing

syst

em.

Targ

eted

pro

gram

mes

- go

vern

men

t sch

ools

and

join

t(a)

432,

189

472,

318

nfp

nfp

nfp

Pro

vide

s as

sist

ance

: for

the

impr

ovem

ent o

f lite

racy

, num

erac

y an

d ed

ucat

ion

outc

omes

fo

r edu

catio

nally

dis

adva

ntag

ed s

tude

nts;

to p

rom

ote

the

stud

y of

oth

er la

ngua

ges;

and

to

assi

st in

the

trans

ition

from

sch

ool t

o w

ork.

* Tar

gete

d pr

ogra

mm

es -

non-

gove

rnm

ent s

choo

ls(a

)22

0,99

625

2,70

7nf

pnf

pnf

pP

rovi

des

assi

stan

ce fo

r: th

e im

prov

emen

t of l

itera

cy, n

umer

acy

and

educ

atio

n ou

tcom

es

for e

duca

tiona

lly d

isad

vant

aged

stu

dent

s; to

pro

mot

e th

e st

udy

of o

ther

lang

uage

s; a

nd to

as

sist

in th

e tra

nsiti

on fr

om s

choo

l to

wor

k.In

dige

nous

Edu

catio

n St

rate

gic

Initi

ativ

es P

rogr

amm

e - g

over

nmen

t(a)

71,2

8010

6,55

4nf

pnf

pnf

pP

rovi

des

supp

lem

enta

ry re

curr

ent f

undi

ng to

edu

catio

n pr

ovid

ers

in th

e pr

esch

ool,

scho

ol

and

voca

tiona

l edu

catio

n an

d tra

inin

g se

ctor

s, a

s w

ell a

s pr

ojec

t-bas

ed fu

ndin

g ai

med

at

impr

ovin

g in

dige

nous

edu

catio

n ou

tcom

es.

Appendix D: Specific purpose payments

51

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SEd

ucat

ion

(con

tinue

d)A

ustr

alia

n Te

chni

cal C

olle

ges(

a)(b

)5,

805

1,73

41,

015

nfp

nfp

The

Aus

tralia

n G

over

nmen

t is

esta

blis

hing

28

Aus

tralia

n Te

chni

cal C

olle

ges

to e

ncou

rage

m

ore

youn

g A

ustra

lians

into

trad

ition

al tr

ades

. Stu

dent

s w

ill c

ombi

ne a

cade

mic

cou

rses

le

adin

g to

a Y

ear 1

2 ce

rtific

ate

with

a S

choo

l-bas

ed N

ew A

ppre

ntic

eshi

p in

a tr

ade,

lead

ing

to a

nat

iona

lly e

ndor

sed

train

ing

pack

age

qual

ifica

tion.

Hea

lthH

epat

itis

C S

ettle

men

t Fun

d3,

615

4,65

50

00

The

Aus

tralia

n G

over

nmen

t's H

epat

itis

C S

ettle

men

t Fun

d is

des

igne

d to

pro

vide

fina

ncia

l as

sist

ance

to th

ose

who

hav

e be

en in

fect

ed w

ith H

epat

itis

C v

ia b

lood

tran

sfus

ion.

H

ealth

pro

gram

me

gran

ts1,

160

1,18

51,

207

1,23

21,

257

Hea

lth p

rogr

amm

e gr

ants

pro

vide

alte

rnat

ive

fund

ing

to M

edic

are

bene

fits,

with

the

aim

of

impr

ovin

g ac

cess

to a

ppro

ved

heal

th s

ervi

ces

and/

or w

here

fee

for s

ervi

ce is

in

appr

opria

te, b

y re

imbu

rsin

g se

rvic

e co

sts

to S

tate

and

Ter

ritor

y go

vern

men

ts.

Hea

lth c

are

gran

ts(a

)(c)

8,81

9,47

59,

278,

038

nfp

nfp

nfp

Gra

nts

to th

e S

tate

s an

d Te

rrito

ries

unde

r the

Aus

tralia

n H

ealth

Car

e A

gree

men

ts to

ass

ist

with

the

prov

isio

n of

pub

lic h

ospi

tal s

ervi

ces

free

of c

harg

e to

elig

ible

per

sons

.H

ighl

y sp

ecia

lised

dru

gs58

0,02

463

7,50

269

4,84

174

8,58

480

7,13

1P

rovi

des

acce

ss to

cer

tain

dru

gs u

nder

the

Pha

rmac

eutic

al B

enef

its S

chem

e w

hich

, be

caus

e of

spe

cial

nee

d in

clin

ical

adm

inis

tratio

n or

mon

itorin

g, c

anno

t saf

ely

be p

rovi

ded

thro

ugh

com

mun

ity p

harm

acy

and

mus

t be

supp

lied

thro

ugh

hosp

itals

to o

utpa

tient

s.Yo

uth

heal

th s

ervi

ces

2,51

02,

565

2,61

42,

661

2,71

1Fu

ndin

g is

pro

vide

d on

a m

atch

ed b

asis

to d

evel

op a

nd im

plem

ent i

nnov

ativ

e pr

imar

y he

alth

car

e se

rvic

es fo

r hom

eles

s an

d at

-ris

k yo

uth.

Nat

iona

l pub

lic h

ealth

(a)(d

)23

0,75

223

3,97

223

9,66

8nf

pnf

pP

aym

ents

to th

e S

tate

s an

d Te

rrito

ries,

und

er b

road

band

ed a

nd o

ther

arr

ange

men

ts fo

r pu

blic

hea

lth, f

or s

ubsi

dies

for h

ealth

pro

mot

ion

and

dise

ase

prev

entio

n (c

over

ing

area

s su

ch a

s w

omen

’s h

ealth

, AID

S c

ontro

l, dr

ug s

trate

gies

and

can

cer s

cree

ning

).

Budget Paper No. 3

52

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SH

ealth

(con

tinue

d)Es

sent

ial v

acci

nes(

a)24

0,77

539

6,06

326

0,60

9nf

pnf

pFu

nds

for e

ssen

tial v

acci

nes

for i

mm

unis

atio

n un

der t

he b

ilate

ral A

ustra

lian

Imm

unis

atio

n A

gree

men

ts fo

r inc

lusi

on in

the

Nat

iona

l Vac

cine

Sch

edul

e.R

epat

riatio

n ge

nera

l hos

pita

ls2,

026

2,11

62,

208

2,30

72,

357

To p

rovi

de fu

nds

for p

aym

ents

of a

non

-trea

tmen

t nat

ure

(for e

xam

ple,

sta

ff tra

nsfe

r co

sts

such

as

accr

ued

leav

e cr

edits

, inc

ome

mai

nten

ance

, sup

eran

nuat

ion

diffe

rent

ial

etc)

to S

tate

and

Ter

ritor

y go

vern

men

ts in

acc

orda

nce

with

agr

eem

ents

reac

hed

on

inte

grat

ion

of re

patri

atio

n ge

nera

l hos

pita

ls.

Supp

ortin

g W

este

rn S

ydne

y - P

ositr

on E

mis

sion

Tom

ogra

phy

scan

ner W

estm

ead

1,10

01,

200

1,30

01,

300

1,30

0Th

e A

ustra

lian

Gov

ernm

ent i

s co

ntrib

utin

g to

the

purc

hase

and

inst

alla

tion

of a

new

P

ositr

on E

mis

sion

Tom

ogra

phy

scan

ner a

t Wes

tmea

d H

ospi

tal (

New

Sou

th W

ales

) and

pr

ovid

ing

annu

al g

rant

s to

war

ds ru

nnin

g co

sts.

Roy

al D

arw

in H

ospi

tal -

equ

ippe

d, p

repa

red

and

read

y13

,184

13,4

3413

,661

13,9

1914

,184

The

Roy

al D

arw

in H

ospi

tal w

ill re

ceiv

e fu

ndin

g to

ens

ure

that

it c

an o

pera

te a

s a

Nat

iona

l C

ritic

al C

are

and

Trau

ma

Res

pons

e C

entre

. Roy

al D

arw

in H

ospi

tal's

cap

acity

will

be

enha

nced

to e

nsur

e th

at, i

n th

e ev

ent o

f a m

ajor

inci

dent

, it h

as th

e ca

paci

ty to

rece

ive

and

treat

as

man

y pe

ople

as

poss

ible

.O

rgan

tran

spla

ntat

ion

serv

ices

1,79

51,

829

1,86

41,

899

1,89

9Th

e A

ustra

lian

Gov

ernm

ent w

ill c

ontri

bute

to c

erta

in tr

ansp

lant

atio

n co

sts

in N

ew S

outh

W

ales

and

Sou

th A

ustra

lia. U

nder

long

-sta

ndin

g ar

rang

emen

ts, t

he A

ustra

lian

Gov

ernm

ent i

s co

mm

itted

to re

imbu

rse

thes

e S

tate

s fo

r 40

per c

ent o

f the

cos

t of c

erta

in

orga

n an

d tis

sue

trans

plan

tatio

n-re

late

d se

rvic

es th

at a

re c

ondu

cted

by

the

Aus

tralia

n R

ed C

ross

Blo

od S

ervi

ce.

Org

an a

nd ti

ssue

don

atio

n1,

350

3,90

02,

550

525

525

To fu

nd in

itiat

ives

that

will

ass

ist w

ith im

prov

ing

rate

s of

org

an a

nd ti

ssue

don

atio

n in

A

ustra

lia.


53

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

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720

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820

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920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SSo

cial

Sec

urity

and

Wel

fare

Age

d ca

re a

sses

smen

t64

,835

68,3

9271

,855

75,2

1878

,697

Fund

s ar

e pr

ovid

ed to

ena

ble

aged

car

e as

sess

men

t tea

ms

to c

ondu

ct h

olis

tic

asse

ssm

ents

of f

rail

aged

clie

nts

and

refe

r the

m to

app

ropr

iate

resi

dent

ial o

r com

mun

ity

care

ser

vice

s.H

ome

and

com

mun

ity c

are(

a)92

8,40

11,

038,

496

nfp

nfp

nfp

Fund

s ar

e pr

ovid

ed o

n a

mat

ched

bas

is fo

r the

pro

visi

on o

f app

ropr

iate

com

mun

ity c

are

serv

ices

to h

elp

frail

aged

peo

ple

and

peop

le w

ith a

dis

abili

ty li

ve in

depe

nden

tly in

thei

rho

mes

as

long

as

poss

ible

.D

isab

ilitie

s se

rvic

es62

0,79

263

6,91

664

3,32

565

4,89

666

6,65

5U

nder

the

term

s of

the

Com

mon

wea

lth S

tate

Ter

ritor

y D

isab

ility

Agr

eem

ents

, the

A

ustra

lian

Gov

ernm

ent p

rovi

des

fund

s to

Sta

tes

and

Terr

itorie

s to

ass

ist i

n th

e pr

ovis

ion

of a

ccom

mod

atio

n su

ppor

t and

oth

er s

ervi

ces

for p

eopl

e w

ith d

isab

ilitie

s.C

hild

ren’

s se

rvic

es10

,411

8,58

48,

736

8,88

89,

045

Fund

s ar

e pr

ovid

ed to

ens

ure

acce

ss to

affo

rdab

le q

ualit

y ch

ild c

are

in p

rogr

amm

es

adm

inis

tere

d by

Sta

te a

nd T

errit

ory

gove

rnm

ents

on

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lf of

the

Aus

tralia

n G

over

nmen

t.Su

ppor

ted

Acc

omm

odat

ion

Ass

ista

nce(

a)(e

) 18

1,95

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5,78

018

9,30

919

2,90

5nf

pTh

is is

a jo

intly

fund

ed C

omm

onw

ealth

-Sta

te G

over

nmen

t pro

gram

me

to a

ssis

t peo

ple

who

are

hom

eles

s an

d in

cris

is. U

nder

the

Com

mon

wea

lth-S

tate

agr

eem

ents

, re

curr

ent a

nnua

l fun

ding

is p

rovi

ded

unde

r the

Sup

porte

d A

ccom

mod

atio

n A

ssis

tanc

e A

ct 1

994

.U

nacc

ompa

nied

hum

anita

rian

min

ors

2,25

32,

271

2,32

72,

385

2,44

5To

ass

ist h

uman

itaria

n m

inor

s w

ithou

t par

ents

in A

ustra

lia a

nd th

e fa

mili

es p

rovi

ding

thei

r ca

re th

roug

h ea

rly in

terv

entio

n, c

ouns

ellin

g an

d as

sist

ance

by

Sta

te a

nd T

errit

ory

wel

fare

ag

enci

es.

Budget Paper No. 3

54

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

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720

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820

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920

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020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SSo

cial

Sec

urity

and

Wel

fare

(con

tinue

d)Fa

mily

Vio

lenc

e Pa

rtne

rshi

p(a)

08,

322

nfp

nfp

nfp

The

Fam

ily V

iole

nce

Par

tner

ship

Pro

gram

ass

ists

the

Sta

tes

and

Terr

itorie

s to

join

tly fu

nd

proj

ects

des

igne

d to

redu

ce a

nd p

reve

nt th

e in

cide

nce

of fa

mily

vio

lenc

e in

indi

geno

us

com

mun

ities

. The

Pro

gram

com

men

ced

on 3

0 Ju

ne 2

004

and

is c

urre

ntly

due

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pse

on

30 J

une

2008

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dige

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utur

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Pay

men

ts to

Sta

te a

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errit

ory

gove

rnm

ents

for h

ousi

ng a

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frast

ruct

ure

for I

ndig

enou

s pe

ople

in re

mot

e ar

eas.

Exte

nsio

n of

frin

ge b

enef

its20

1,83

420

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422

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is fu

ndin

g co

mpe

nsat

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e S

tate

s an

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ries

for t

he e

xtra

cos

ts re

sulti

ng fr

om th

elib

eral

isat

ion

of a

cces

s to

the

Aus

tralia

n G

over

nmen

t's P

ensi

oner

Con

cess

ion

Car

d in

1993

. In

retu

rn th

e S

tate

s an

d Te

rrito

ries

agre

e to

pro

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p of

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cess

ions

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l car

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ders

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e Ti

tle(f)

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r exp

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ture

und

er p

art 9

of t

he N

ativ

e Ti

tle A

ct 1

993

. Fun

ding

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s an

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rrito

ries

impl

emen

t a c

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sten

t fra

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ork

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g w

ith n

ativ

e tit

le is

sues

and

mee

ting

nativ

e tit

le c

ompe

nsat

ion

cost

s.Yo

ung

peop

le w

ith d

isab

ilitie

s(a)

4,19

014

,266

28,2

8837

,465

nfp

Pro

vide

s fu

ndin

g to

the

Sta

tes

on a

mat

ched

bas

is fo

r the

pur

pose

of r

educ

ing

the

num

ber o

f you

nger

peo

ple

with

a d

isab

ility

in re

side

ntia

l age

d ca

re, w

ith p

riorit

y gi

ven

to

peop

le a

ged

less

than

50

year

s.N

atio

nal a

ctio

n pl

an to

bui

ld o

n so

cial

coh

esio

n, h

arm

ony

and

secu

rity

450

461

472

482

493

Com

mon

wea

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butio

n to

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ship

pro

ject

s w

ith S

tate

and

Ter

ritor

y go

vern

men

ts

aim

ed a

t fur

ther

inte

grat

ing

the

Mus

lim c

omm

unity

into

bro

ader

Aus

tralia

n so

ciet

y.


55

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

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t titl

e20

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020

10-1

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escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SH

ousi

ng a

nd C

omm

unity

Am

eniti

esA

ssis

tanc

e fo

r wat

er a

nd s

ewer

age

9,43

59,

633

9,81

710

,004

10,1

95To

com

pens

ate

the

Aus

tralia

n C

apita

l Ter

ritor

y (A

CT)

for a

dditi

onal

cos

ts re

sulti

ng fr

om

the

natio

nal c

apita

l pla

nnin

g in

fluen

ces

on th

e pr

ovis

ion

of w

ater

and

sew

erag

e se

rvic

es.

The

leve

l of f

undi

ng is

bas

ed u

pon

the

findi

ngs

of th

e C

omm

onw

ealth

Gra

nts

Com

mis

sion

in

its

seco

nd a

nd th

ird re

ports

on

finan

cing

in th

e A

CT

prio

r to

self-

gove

rnm

ent o

f the

Te

rrito

ry in

198

9.N

atur

al H

erita

ge T

rust

of A

ustr

alia

- B

ushc

are(

g)12

,069

14,7

380

00

To c

onse

rve

and

rest

ore

habi

tat f

or A

ustra

lia's

uni

que

nativ

e flo

ra a

nd fa

una

that

und

erpi

n th

e he

alth

of o

ur la

ndsc

apes

.N

atur

al H

erita

ge T

rust

of A

ustr

alia

- C

oast

care

(g)

4,55

85,

576

00

0To

pro

tect

our

coa

stal

cat

chm

ents

, eco

syst

ems

and

the

mar

ine

envi

ronm

ent.

Nat

ural

Her

itage

Tru

st o

f Aus

tral

ia -

Land

care

(g)

9,26

411

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00

0To

reve

rse

land

deg

rada

tion

and

prom

ote

sust

aina

ble

agric

ultu

re.

Nat

ural

Her

itage

Tru

st o

f Aus

tral

ia -

Riv

erca

re(g

)9,

567

11,6

860

00

To im

prov

e w

ater

qua

lity

and

envi

ronm

enta

l con

ditio

ns in

our

rive

r sys

tem

s an

d w

etla

nds.

Nat

ural

Her

itage

Tru

st p

hase

thre

e(a)

00

nfp

nfp

nfp

For t

he p

rote

ctio

n an

d su

stai

nabl

e us

e of

nat

ural

reso

urce

s, th

roug

h pr

otec

ting

coas

tal

catc

hmen

ts, p

rovi

ding

hab

itat f

or A

ustra

lia’s

uni

que

flora

and

faun

a, a

nd im

prov

ing

wat

erqu

ality

and

the

envi

ronm

enta

l con

ditio

n of

rive

r sys

tem

s an

d w

etla

nds.

Nat

iona

l Wat

er In

itiat

ive

- Liv

ing

Mur

ray

18,2

5390

,548

48,7

1540

,000

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impl

emen

t a p

acka

ge o

f wat

er re

cove

ry a

nd w

ater

use

effi

cien

cy a

ctiv

ities

to a

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ss

wat

er o

ver-

allo

catio

n in

the

Mur

ray

Dar

ling

Bas

in a

nd im

prov

e th

e he

alth

of t

he M

urra

y D

arlin

g sy

stem

.

Budget Paper No. 3

56

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

( $'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

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720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SR

ecre

atio

n an

d C

ultu

reN

atur

al H

erita

ge T

rust

of A

ustr

alia

- B

ushc

are(

g)6,

574

6,70

00

00

To c

onse

rve

and

rest

ore

habi

tat f

or A

ustra

lia's

uni

que

nativ

e flo

ra a

nd fa

una

that

und

erpi

n th

e he

alth

of o

ur la

ndsc

apes

.N

atur

al H

erita

ge T

rust

of A

ustr

alia

- C

oast

care

(g)

2,48

62,

534

00

0To

pro

tect

our

coa

stal

cat

chm

ents

, eco

syst

ems

and

the

mar

ine

envi

ronm

ent.

Nat

ural

Her

itage

Tru

st o

f Aus

tral

ia -

Land

care

(g)

5,04

05,

139

00

0To

reve

rse

land

deg

rada

tion

and

prom

ote

sust

aina

ble

agric

ultu

re.

Nat

ural

Her

itage

Tru

st o

f Aus

tral

ia -

Riv

erca

re(g

)5,

213

5,31

40

00

To im

prov

e w

ater

qua

lity

and

envi

ronm

enta

l con

ditio

ns in

our

rive

r sys

tem

s an

d w

etla

nds.

Nat

ural

Her

itage

Tru

st p

hase

thre

e(a)

00

nfp

nfp

nfp

For t

he p

rote

ctio

n an

d su

stai

nabl

e us

e of

nat

ural

reso

urce

s, th

roug

h pr

otec

ting

coas

tal

catc

hmen

ts, p

rovi

ding

hab

itat f

or A

ustra

lia’s

uni

que

flora

and

faun

a, a

nd im

prov

ing

wat

erqu

ality

and

the

envi

ronm

enta

l con

ditio

n of

rive

r sys

tem

s an

d w

etla

nds.

Stre

ngth

enin

g Ta

sman

ia50

00

00

To u

nder

take

refu

rbis

hmen

t of b

uild

ings

in th

e Lo

w H

ead

His

toric

Pre

cinc

t to

prom

ote

incr

ease

d vi

sita

tion,

and

eco

nom

ic v

iabi

lity

and

long

-term

sus

tain

abili

ty to

the

prec

inct

th

roug

h th

e ge

nera

tion

of s

uffic

ient

reve

nue

to p

rovi

de fo

r ade

quat

e m

anag

emen

t and

m

aint

enan

ce o

f the

site

's h

erita

ge a

sset

s as

a p

ublic

faci

lity.

Fuel

and

Ene

rgy

Snow

y H

ydro

Ltd

- co

mpa

ny ta

x co

mpe

nsat

ion

4,32

334

,331

34,3

3134

,331

34,3

31To

com

pens

ate

Vic

toria

and

New

Sou

th W

ales

for c

ompa

ny ta

x pa

ymen

ts m

ade

by

Sno

wy

Hyd

ro L

td.


57

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SA

gric

ultu

re, F

ores

try

and

Fish

ing

Nat

ural

Her

itage

Tru

st o

f Aus

tral

ia -

Bus

hcar

e(g)

23,0

6723

,225

00

0To

con

serv

e an

d re

stor

e ha

bita

t for

Aus

tralia

's u

niqu

e na

tive

flora

and

faun

a th

at u

nder

pin

the

heal

th o

f our

land

scap

es.

Nat

ural

Her

itage

Tru

st o

f Aus

tral

ia -

Coa

stca

re(g

)8,

728

8,78

50

00

To p

rote

ct o

ur c

oast

al c

atch

men

ts, e

cosy

stem

s an

d th

e m

arin

e en

viro

nmen

t.N

atur

al H

erita

ge T

rust

of A

ustr

alia

- La

ndca

re(g

)17

,695

17,8

170

00

To re

vers

e la

nd d

egra

datio

n an

d pr

omot

e su

stai

nabl

e ag

ricul

ture

.N

atur

al H

erita

ge T

rust

of A

ustr

alia

- R

iver

care

(g)

18,2

8918

,417

00

0To

impr

ove

wat

er q

ualit

y an

d en

viro

nmen

tal c

ondi

tions

in o

ur ri

ver s

yste

ms

and

wet

land

s.Ex

otic

Dis

ease

Pre

pare

dnes

s Pr

ogra

mm

e37

938

738

738

739

5Th

e W

ildlif

e an

d E

xotic

Dis

ease

s P

repa

redn

ess

Pro

gram

me

supp

orts

inve

stig

atio

ns in

to

the

role

of w

ildlif

e sp

ecie

s in

the

mai

nten

ance

and

spr

ead

of e

mer

ging

ani

mal

dis

ease

s an

d in

curs

ions

of m

ajor

exo

tic d

isea

ses

of a

nim

als.

Exce

ptio

nal c

ircum

stan

ces

assi

stan

ce35

4,36

633

5,50

258

,610

00

To p

rovi

de s

uppo

rt to

elig

ible

farm

bus

ines

s an

d as

soci

ated

sm

all b

usin

ess

ente

rpris

es

whe

re in

com

es h

ave

been

adv

erse

ly a

ffect

ed b

y ex

cept

iona

l circ

umst

ance

s su

ch a

s ex

trem

e dr

ough

t and

to s

uppo

rt th

e ad

min

istra

tive

cost

s of

Sta

te a

nd T

errit

ory

rura

l as

sist

ance

aut

horit

ies

for t

he is

suin

g of

exc

eptio

nal c

ircum

stan

ce c

ertif

icat

es a

nd th

e de

liver

y of

exc

eptio

nal c

ircum

stan

ce in

tere

st ra

te s

ubsi

dies

.N

atio

nal L

andc

are

Prog

ram

me

(NLP

)(h)

25,2

7526

,822

00

0Th

e N

LP a

ims

to a

chie

ve e

ffici

ent,

sust

aina

ble

and

equi

tabl

e m

anag

emen

t of n

atur

al

reso

urce

s in

Aus

tralia

. Cur

rent

pay

men

ts m

ainl

y as

sist

com

mun

ity la

ndca

re g

roup

ac

tiviti

es a

nd p

roje

cts

whi

ch s

uppo

rt co

mm

unity

land

care

, alth

ough

som

e st

ate

and

terr

itory

age

ncy

proj

ects

are

als

o su

ppor

ted.

Thi

s fu

ndin

g is

man

aged

in c

onju

nctio

n w

ith

Nat

ural

Her

itage

Tru

st a

lloca

tions

to th

e N

LP.

Budget Paper No. 3

58

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

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00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SA

gric

ultu

re, F

ores

try

and

Fish

ing

(con

tinue

d)Im

prov

ing

Wat

er In

form

atio

n0

10,0

0020

,000

20,0

0020

,000

Fund

ing

is b

eing

pro

vide

d to

the

Bur

eau

of M

eteo

rolo

gy to

impr

ove

the

deta

il an

d sc

ope

of n

atio

nally

ava

ilabl

e w

ater

info

rmat

ion,

whi

ch w

ill a

llow

the

Bur

eau

to fo

reca

st, a

naly

se

and

publ

icly

repo

rt on

wat

er re

sour

ces.

Som

e of

this

info

rmat

ion

will

be

sour

ced

from

st

ate

agen

cies

.N

atur

al H

erita

ge T

rust

pha

se th

ree(

a)0

0nf

pnf

pnf

pFo

r the

pro

tect

ion

and

sust

aina

ble

use

of n

atur

al re

sour

ces,

thro

ugh

prot

ectin

g co

asta

l ca

tchm

ents

, pro

vidi

ng h

abita

t for

Aus

tralia

’s u

niqu

e flo

ra a

nd fa

una,

and

impr

ovin

g w

ater

qual

ity a

nd th

e en

viro

nmen

tal c

ondi

tion

of ri

ver s

yste

ms

and

wet

land

s.R

egio

nal a

ssis

tanc

e50

025

90

00

To p

rovi

de s

uppo

rt to

farm

bus

ines

s en

terp

rises

to im

prov

e fa

rm p

rodu

ctiv

ity, p

rofit

abili

ty

and

sust

aina

bilit

y.G

reat

Art

esia

n B

asin

Sus

tain

abili

ty In

itiat

ive

10,2

168,

148

8,29

914

,880

14,8

70A

ustra

lian

Gov

ernm

ent c

ontri

butio

n to

ass

ist w

ith th

e im

plem

enta

tion

of th

e G

reat

A

rtesi

an B

asin

Man

agem

ent P

lan.

Gra

nts

will

be

mad

e to

som

e S

tate

s to

ass

ist b

ore

reha

bilit

atio

n. S

uppl

emen

tary

ince

ntiv

es w

ill a

lso

be m

ade

avai

labl

e fo

r the

repl

acem

ent

of o

pen

drai

ns w

ith p

ipin

g.A

gric

ultu

re -

Adv

anci

ng A

ustr

alia

- Fa

rmB

is7,

700

8,05

00

00

To fa

cilit

ate

farm

er s

elf r

elia

nce

and

prom

ote

a po

sitiv

e ap

proa

ch to

cha

nge

and

a cu

lture

of

con

tinuo

us im

prov

emen

t by

prov

idin

g fin

anci

al a

ssis

tanc

e to

impr

ove

skill

s in

bus

ines

s an

d re

sour

ce m

anag

emen

t.Er

adic

atio

n of

red

impo

rted

fire

ant

5,13

77,

000

3,27

40

0To

pro

vide

fund

ing

for t

he e

radi

catio

n of

infe

stat

ions

det

ecte

d in

Aus

tralia

.


59

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

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720

07-0

820

08-0

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09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SA

gric

ultu

re, F

ores

try

and

Fish

ing

(con

tinue

d)N

atio

nal a

ctio

n pl

an fo

r sal

inity

and

wat

er q

ualit

y12

8,79

791

,745

00

0Th

is n

atio

nal a

ctio

n pl

an a

ims

to m

otiv

ate

and

enab

le re

gion

al c

omm

uniti

es to

use

co

ordi

nate

d an

d ta

rget

ed a

ctio

n to

: a) p

reve

nt, s

tabi

lise

and

reve

rse

trend

s in

dry

land

sa

linity

affe

ctin

g th

e su

stai

nabi

lity

of p

rodu

ctio

n, th

e co

nser

vatio

n of

bio

logi

cal d

iver

sity

an

d th

e vi

abili

ty o

f our

infra

stru

ctur

e; a

nd b

) im

prov

e w

ater

qua

lity

and

secu

re re

liabl

e al

loca

tions

for h

uman

use

s, in

dust

ry a

nd th

e en

viro

nmen

t. Pl

ant d

isea

se a

nd e

radi

catio

n61

873

040

80

0Th

is p

rogr

amm

e pr

ovid

es a

ssis

tanc

e un

der a

nat

iona

l stra

tegy

of e

radi

catio

n of

citr

us

cank

er, t

o m

itiga

te it

s po

tent

ial i

mpa

ct o

n A

ustra

lia's

citr

us in

dust

ry.

Tasm

ania

n fo

rest

s pa

ckag

e18

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19,0

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To fu

nd a

dditi

onal

pla

ntat

ion

esta

blis

hmen

t and

pro

duct

ivity

impr

ovem

ents

in e

xist

ing

pla

ntat

ions

and

nat

ive

fore

sts,

with

the

aim

of e

nsur

ing

long

term

sup

ply

of s

awlo

gs a

nd v

enee

r log

s.

Tran

spor

t and

Com

mun

icat

ion

Inte

rsta

te ro

ad tr

ansp

ort

50,4

3053

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56,2

3059

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nder

the

Inte

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te R

oad

Tran

spor

t Act

198

5, t

he A

ustra

lian

Gov

ernm

ent m

akes

pa

ymen

ts to

the

Sta

tes

whi

ch e

qual

tota

l rev

enue

rece

ived

from

the

Sta

tes

from

regi

stra

tions

mad

e un

der t

he F

eder

al In

ters

tate

Reg

istra

tion

Sch

eme.

Pay

men

t of

amou

nts

equa

l to

pena

lties

aris

ing

from

pro

secu

tions

und

er th

e A

ct a

re a

lso

mad

eby

the

Aus

tralia

n G

over

nmen

t.* S

uppl

emen

tary

fund

ing

to S

outh

Aus

tral

ian

coun

cils

for l

ocal

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s13

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13,4

7814

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Pro

vide

s su

pple

men

tary

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ent i

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outh

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tralia

to a

ddre

ss th

at

Sta

te's

cur

rent

dis

adva

ntag

e in

loca

l roa

d fu

ndin

g un

der t

he fi

nanc

ial a

ssis

tanc

e gr

ants

ar

rang

emen

ts.

Budget Paper No. 3

60

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

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cont

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nctio

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t titl

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720

07-0

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08-0

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09-1

020

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1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

STr

ansp

ort a

nd C

omm

unic

atio

n (c

ontin

ued)

Petr

oleu

m p

rodu

cts

frei

ght s

ubsi

dy s

chem

e35

00

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e S

tate

s G

rant

s (P

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Pro

duct

s) A

ct 1

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pro

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s fo

r gra

nts

to b

e m

ade

to m

ost

Sta

tes

and

the

Nor

ther

n Te

rrito

ry to

ena

ble

them

to s

ubsi

dise

the

cost

of t

rans

porti

ng

elig

ible

pet

role

um p

rodu

cts

to re

mot

e ar

eas

of A

ustra

lia.

Oth

er P

urpo

ses

* Fin

anci

al a

ssis

tanc

e gr

ants

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ocal

gov

ernm

ent

Gen

eral

pur

pose

ass

ista

nce

1,16

8,81

51,

211,

735

1,25

9,11

81,

307,

470

1,35

7,28

6P

rovi

des

untie

d ge

nera

l pur

pose

ass

ista

nce

for l

ocal

gov

ernm

ent a

utho

ritie

s. T

he g

rant

s ar

e di

strib

uted

bet

wee

n th

e S

tate

s on

an

equa

l per

cap

ita b

asis

.U

ntie

d lo

cal r

oads

gra

nts

518,

648

537,

682

558,

709

580,

163

602,

269

Pro

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s un

tied

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ce fo

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al g

over

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t aut

horit

ies

in p

lace

of s

peci

fic p

urpo

sepa

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ts fo

rmer

ly p

asse

d on

to lo

cal g

over

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t by

the

Sta

tes

for e

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ditu

re o

nlo

cal r

oads

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ompe

nsat

ion

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pani

es re

gula

tion

169,

308

173,

204

177,

532

181,

966

186,

521

Und

er th

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rms

of th

e C

orpo

ratio

ns A

gree

men

t 200

2, th

e A

ustra

lian

Gov

ernm

ent

com

pens

ates

the

six

Sta

tes

and

the

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ther

n Te

rrito

ry fo

r rev

enue

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one

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g th

e co

mm

ence

men

t of t

he n

atio

nal s

chem

e fo

r the

regu

latio

n of

com

pani

es a

nd s

ecur

ities

.N

atur

al d

isas

ter r

elie

f86

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89,5

4089

,540

Rei

mbu

rsem

ent o

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t of t

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re in

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ed b

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tate

s fo

r per

sona

l har

dshi

pan

d di

stre

ss p

aym

ents

mad

e to

per

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adv

erse

ly a

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l dis

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Roy

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s68

4,14

765

5,32

769

5,49

272

3,10

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5,09

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tralia

n G

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est S

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sec

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129

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ged

Land

s) A

ct 1

967

; and

reim

burs

emen

t to

the

Nor

ther

n Te

rrito

ry in

lieu

of u

rani

um ro

yalti

es

equi

vale

nt to

1.2

5 pe

r cen

t of n

et s

ales

pro

ceed

s as

requ

ired

unde

r the

197

8fin

anci

al M

emor

andu

m o

f Und

erst

andi

ng b

etw

een

the

Aus

tralia

n G

over

nmen

t and

the

Terr

itory

.


61

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CU

RR

ENT

PUR

POSE

SO

ther

Pur

pose

s (c

ontin

ued)

Aus

tral

ian

Cap

ital T

errit

ory

(AC

T) n

atio

nal c

apita

l inf

luen

ces

23,4

6323

,956

24,4

1124

,874

25,3

47Fu

ndin

g as

sist

s th

e A

CT

Gov

ernm

ent t

o m

eet t

he a

dditi

onal

mun

icip

al c

osts

flow

ing

from

C

anbe

rra'

s ro

le a

s th

e na

tiona

l cap

ital.

The

leve

l of f

undi

ng is

bas

ed u

pon

the

findi

ngs

of

the

Com

mon

wea

lth G

rant

s C

omm

issi

on in

its

seco

nd a

nd th

ird re

ports

on

finan

cing

in th

e A

CT

prio

r to

self-

gove

rnm

ent o

f the

Ter

ritor

y in

198

9. SPEC

IFIC

PU

RPO

SE P

AYM

ENTS

- C

API

TAL

PUR

POSE

SEd

ucat

ion

Gov

ernm

ent s

choo

ls(a

)63

3,72

560

1,55

2nf

pnf

pnf

pP

rovi

des

supp

lem

enta

ry a

ssis

tanc

e to

Sta

te a

nd T

errit

ory

educ

atio

n au

thor

ities

for t

he

prov

isio

n, m

aint

enan

ce a

nd u

pgra

ding

of s

choo

l fac

ilitie

s, w

hich

can

incl

ude,

am

ongs

t ot

her t

hing

s, la

nd o

r bui

ldin

g pu

rcha

ses,

cap

ital w

orks

or t

he p

rovi

sion

of e

quip

men

t.* N

on-g

over

nmen

t sch

ools

(a)

205,

585

269,

466

nfp

nfp

nfp

Pro

vide

s su

pple

men

tary

ass

ista

nce

to n

on-g

over

nmen

t sch

ools

and

sys

tem

s, a

s w

ell a

s ho

stel

s fo

r rur

al s

tude

nts,

for t

he p

rovi

sion

, mai

nten

ance

and

upg

radi

ng o

f sch

ool

faci

litie

s, w

hich

can

incl

ude,

am

ongs

t oth

er th

ings

, lan

d or

bui

ldin

g pu

rcha

ses,

cap

ital

wor

ks o

r the

pro

visi

on o

f equ

ipm

ent.

Hea

lthO

rgan

tran

spla

ntat

ion

serv

ices

224

229

233

238

238

The

Aus

tralia

n G

over

nmen

t will

con

tribu

te to

cer

tain

cap

ital c

osts

ass

ocia

ted

with

tra

nspl

anta

tion

serv

ices

pro

vide

d in

New

Sou

th W

ales

and

Sou

th A

ustra

lia. U

nder

lo

ng-s

tand

ing

arra

ngem

ents

, the

Aus

tralia

n G

over

nmen

t is

com

mitt

ed to

reim

burs

e th

ese

Sta

tes

for 5

0 pe

r cen

t of t

he a

gree

d ca

pita

l cos

t for

cer

tain

org

an a

nd ti

ssue

tra

nspl

anta

tion-

rela

ted

serv

ices

that

are

con

duct

ed b

y th

e A

ustra

lian

Red

Cro

ss B

lood

Ser

vice

.

Budget Paper No. 3

62

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CA

PITA

L PU

RPO

SES

Soci

al S

ecur

ity a

nd W

elfa

reC

risis

acc

omm

odat

ion

assi

stan

ce(a

)41

,155

41,8

42nf

pnf

pnf

pTo

pro

vide

fund

s to

the

Sta

tes

and

Terr

itorie

s un

der t

he C

omm

onw

ealth

Sta

te H

ousi

ng

Agr

eem

ent (

CS

HA

) for

the

acqu

isiti

on o

f acc

omm

odat

ion

for u

se u

nder

the

Sup

porte

d A

ccom

mod

atio

n A

ssis

tanc

e P

rogr

amm

e.

Indi

geno

us h

ousi

ng a

nd in

fras

truc

ture

(a)

00

nfp

nfp

nfp

Pay

men

ts to

the

Sta

tes

for h

ousi

ng a

nd in

frast

ruct

ure

for i

ndig

enou

s pe

ople

in re

mot

e ar

eas.

Hou

sing

and

Com

mun

ity A

men

ities

Hou

sing

ass

ista

nce

for I

ndig

enou

s pe

ople

(a)

94,4

3996

,019

nfp

nfp

nfp

To a

ssis

t Abo

rigin

al a

nd T

orre

s S

trait

Isla

nder

peo

ple

on lo

w to

mod

erat

e in

com

es to

ha

ve a

cces

s to

affo

rdab

le, a

ppro

pria

te a

nd s

ecur

e re

ntal

hou

sing

, inc

ludi

ng p

ublic

and

com

mun

ity-o

wne

d re

ntal

hou

sing

. Fun

ds a

re p

rovi

ded

unde

r the

CS

HA

.C

omm

unity

hou

sing

(a)

66,4

0967

,519

nfp

nfp

nfp

To d

evel

op c

omm

unity

hou

sing

whi

ch p

rovi

des

appr

opria

te a

nd a

fford

able

rent

al

acco

mm

odat

ion

for l

ow to

mod

erat

e in

com

e ea

rner

s. F

unds

are

pro

vide

d un

der t

he

CH

SA

.C

SHA

blo

ck a

ssis

tanc

e/ba

se fu

ndin

g(a)

752,

633

765,

224

nfp

nfp

nfp

The

Aus

tralia

n G

over

nmen

t, th

roug

h th

e C

SH

A, p

rovi

des

fund

s to

the

Sta

tes

and

Terr

itorie

s pr

imar

ily fo

r the

pro

visi

on o

f pub

lic re

ntal

hou

sing

for l

ow to

mod

erat

e in

com

e ho

useh

olds

. The

Sta

tes

and

Terr

itorie

s ar

e re

quire

d to

con

tribu

te to

hou

sing

ass

ista

nce

in

amou

nts

as s

et in

the

CS

HA

.So

cial

Hou

sing

Sub

sidy

Pro

gram

me

1,99

51,

995

1,99

51,

995

1,99

5P

rovi

des

mat

ched

fund

ing

to N

ew S

outh

Wal

es u

ntil

30 J

une

2016

to s

ubsi

dise

the

recu

rren

t cos

ts o

f fin

anci

ng re

ntal

acc

omm

odat

ion

for l

ow a

nd m

oder

ate

inco

me

earn

ers.


63

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CA

PITA

L PU

RPO

SES

Hou

sing

and

Com

mun

ity A

men

ities

(con

tinue

d)* D

isas

ter M

itiga

tion

Pack

age

22,4

4743

,600

00

0Fu

ndin

g fo

r a w

ide

rang

e of

miti

gatio

n m

easu

res

to h

elp

redu

ce th

e th

reat

pos

ed b

y na

tura

l dis

aste

rs s

uch

as b

ushf

ires,

cyc

lone

s, fl

oods

and

land

slid

es.

* Add

ition

al F

irst H

ome

Ow

ners

Sch

eme

02,

399

00

0Th

e A

ustra

lian

Gov

ernm

ent i

s fu

ndin

g an

add

ition

al F

irst H

ome

Ow

ners

Sch

eme

(FH

OS

) gr

ant f

or a

ll el

igib

le fi

rst h

ome

owne

rs c

ontra

ctin

g be

twee

n 9

Mar

ch 2

001

and

30 J

une

2002

to b

uy o

r bui

ld a

new

hom

e. T

he g

rant

is $

7,00

0 fo

r con

tract

s m

ade

betw

een

9 M

arch

and

31

Dec

embe

r 200

1 an

d $3

,000

for c

ontra

cts

mad

e be

twee

n 1

Janu

ary

and

30 J

une

2002

. Alth

ough

the

addi

tiona

l FH

OS

has

end

ed, g

rant

s co

ntin

ue to

be

paid

to

elig

ible

app

lican

ts d

ue to

the

time

need

ed to

com

plet

e co

nstru

ctio

n an

d th

e pe

riod

allo

wed

to lo

dge

an a

pplic

atio

n, o

nce

cons

truct

ion

is c

ompl

ete.

* Bus

hfire

Miti

gatio

n Pr

ogra

mm

e5,

055

5,00

05,

000

5,00

05,

000

The

Bus

hfire

Miti

gatio

n P

rogr

amm

e pr

ovid

es p

artn

ersh

ip fu

ndin

g to

the

Sta

tes

and

Terr

itorie

s fo

r the

con

stru

ctio

n an

d m

aint

enan

ce o

f fire

trai

ls a

nd a

ssoc

iate

d ac

cess

ibili

ty

mea

sure

s su

ch a

s th

e pr

ovis

ion

of a

cces

s ga

tes.

Fuel

and

Ene

rgy

* Pho

tovo

ltaic

Reb

ate

Prog

ram

me

5,96

54,

350

3,45

03,

650

3,65

0To

pro

vide

reba

tes

to h

ouse

hold

ers

and

com

mun

ity g

roup

s w

ho in

stal

l pho

tovo

ltaic

eq

uipm

ent t

o m

ake

elec

trici

ty fr

om s

unlig

ht fo

r dom

estic

use

.R

enew

able

rem

ote

pow

er g

ener

atio

n 13

,795

34,0

0029

,000

15,4

600

To p

rovi

de a

reba

te fo

r the

inst

alla

tion

of re

new

able

ene

rgy

gene

ratio

n te

chno

logi

es in

ar

eas

of A

ustra

lia c

urre

ntly

relia

nt o

n di

esel

for e

lect

ricity

gen

erat

ion.

Fun

ding

is b

ased

on

the

rele

vant

am

ount

of d

iese

l fue

l exc

ise

paid

in e

ach

Sta

te o

r Ter

ritor

y by

pub

licel

ectri

city

gen

erat

ors.

Budget Paper No. 3

64

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nSP

ECIF

IC P

UR

POSE

PA

YMEN

TS -

CA

PITA

L PU

RPO

SES

Rec

reat

ion

and

Cul

ture

Sydn

ey C

ricke

t Gro

und

- new

gra

ndst

and

015

,000

10,0

000

0Fu

ndin

g pr

ovid

ed to

the

Syd

ney

Cric

ket a

nd S

ports

Gro

und

Trus

t to

assi

st in

the

build

ing

of th

e ne

w g

rand

stan

d on

the

old

Hill

site

at t

he S

ydne

y C

ricke

t Gro

und.

Agr

icul

ture

, For

estr

y an

d Fi

shin

g Ta

sman

ian

wat

er in

fras

truc

ture

01,

100

00

0To

pro

vide

fund

ing

to T

asm

ania

for t

he c

onst

ruct

ion

of th

e W

arne

r Cre

ek D

am a

nd th

e N

orth

ern

Mid

land

s W

ater

Pro

ject

. The

se p

roje

cts

aim

to p

rovi

de re

liabl

e so

urce

s of

irr

igat

ion

wat

er in

thei

r res

pect

ive

regi

ons.

Tran

spor

t and

Com

mun

icat

ion

Aus

Link

(i)1,

795,

139

2,38

2,36

12,

923,

970

3,80

0,32

83,

601,

467

The

Aus

tralia

n G

over

nmen

t will

con

tribu

te fu

ndin

g fo

r the

dev

elop

men

t, co

nstru

ctio

n an

d m

aint

enan

ce o

f lan

d tra

nspo

rt pr

ojec

ts o

n th

e na

tiona

l lan

d tra

nspo

rt ne

twor

k, s

ome

cont

inui

ng p

roje

cts

off t

he n

etw

ork,

'bla

ck s

pot'

proj

ects

and

for r

oads

in u

ninc

orpo

rate

d ar

eas.

Fede

ratio

n Fu

nd p

roje

cts

- NSW

/VIC

015

,000

00

0Th

e A

ustra

lian

Gov

ernm

ent a

gree

d to

fund

$22

mill

ion

each

to b

oth

Vic

toria

and

New

S

outh

Wal

es fo

r the

repl

acem

ent o

f thr

ee k

ey c

ross

ings

of t

he M

urra

y R

iver

at E

chuc

a,

Rob

inva

le a

nd C

orow

a.


65

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

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720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nR

EPA

YMEN

TSR

epay

men

ts o

f Aus

tral

ian

Gov

ernm

ent L

oans

AC

T de

bt re

paym

ents

4,64

74,

647

4,64

74,

647

1,81

3S

ervi

cing

of r

emai

ning

not

iona

l deb

t hel

d ag

ains

t ass

ets

trans

ferr

ed fr

om th

e A

ustra

lian

Gov

ernm

ent t

o th

e A

CT

Gov

ernm

ent,

on s

elf-g

over

nmen

t, fo

r pub

lic tr

ansp

ort (

land

and

bu

ildin

gs),

elec

trici

ty, w

ater

sup

ply

and

sew

erag

e.Lo

an C

ounc

il - h

ousi

ng n

omin

atio

ns(j)

19,3

4320

,212

21,1

2122

,071

23,0

65P

rinci

pal r

epay

men

ts b

y th

e si

x S

tate

s an

d th

e N

orth

ern

Terr

itory

of a

dvan

ces

mad

e to

th

em u

nder

the

vario

us S

tate

s (W

orks

and

Hou

sing

) Ass

ista

nce

Act

s.

Def

ence

Hou

sing

for s

ervi

cem

en1,

661

1,77

61,

902

2,03

82,

152

Prin

cipa

l rep

aym

ents

by

the

Sta

tes

and

Terr

itorie

s of

adv

ance

s to

fina

nce

the

cons

truct

ion,

mai

nten

ance

and

upg

rade

of p

ublic

hou

sing

for u

se b

y se

rvic

e pe

rson

nel.

Hou

sing

and

Com

mun

ity A

men

ities

CSH

A L

oans

(j)66

,164

67,3

7569

,036

70,5

7772

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Prin

cipa

l rep

aym

ents

by

the

six

Sta

tes

and

the

Nor

ther

n Te

rrito

ry o

f adv

ance

s m

ade

to

them

und

er th

e va

rious

Hou

sing

Agr

eem

ents

, Nor

ther

n Te

rrito

ry H

ousi

ng A

gree

men

t and

H

ousi

ng A

ssis

tanc

e A

cts.

Oth

er h

ousi

ng8,

995

9,31

89,

696

10,0

5610

,300

Rep

aym

ent o

f the

prin

cipa

l of l

oans

rela

ting

to a

sset

s tra

nsfe

rred

from

the

Aus

tralia

n G

over

nmen

t to

the

Nor

ther

n Te

rrito

ry a

t the

tim

e of

sel

f gov

ernm

ent i

n 19

78

and

to th

e A

ustra

lian

Cap

ital T

errit

ory

at th

e tim

e of

sel

f gov

ernm

ent i

n 19

89.

Urb

an w

ater

sup

ply

and

trea

tmen

t1,

084

1,20

71,

276

1,35

40

Rep

aym

ent o

f prin

cipa

l on

loan

s to

Sou

th A

ustra

lia fo

r wat

er q

ualit

y im

prov

emen

t via

A

dela

ide

and

Nor

ther

n To

wns

Wat

er T

reat

men

t and

to W

este

rn A

ustra

lia fo

r sa

linity

miti

gatio

n vi

a th

e H

ardi

ng R

iver

Dam

pro

ject

.

Budget Paper No. 3

66

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nR

EPA

YMEN

TSH

ousi

ng a

nd C

omm

unity

Am

eniti

es (c

ontin

ued)

Nor

ther

n Te

rrito

ry -

wat

er a

nd s

ewer

age

assi

stan

ce13

613

613

613

613

6R

epay

men

t of t

he p

rinci

pal o

f a lo

an re

latin

g to

ass

ets

trans

ferr

ed fr

om th

e A

ustra

lian

Gov

ernm

ent t

o th

e N

orth

ern

Terr

itory

at t

he ti

me

of s

elf-g

over

nmen

t in

1978

. C

apta

ins

Flat

(Aba

tem

ent o

f Pol

lutio

n) A

gree

men

t11

95

50

This

is a

loan

agr

eem

ent t

hat g

ener

ates

repa

ymen

ts o

f prin

cipa

l and

inte

rest

from

the

New

Sou

th W

ales

Gov

ernm

ent i

n re

latio

n to

cap

ital w

orks

und

erta

ken

at C

apta

ins

Flat

to

prev

ent p

ollu

tion

of th

e M

olon

glo

Riv

er.

Sew

erag

e5,

861

6,36

66,

858

7,39

95,

674

Rep

aym

ent o

f the

prin

cipa

l of l

oans

pro

vide

d un

der t

he U

rban

and

Reg

iona

l Dev

elop

men

t (F

inan

cial

Ass

ista

nce)

Act

197

4 to

all

Sta

tes

and

Terr

itorie

s to

und

erta

ke p

rogr

amm

es

conn

ecte

d w

ith p

rovi

sion

of s

ewer

age

faci

litie

s w

ith p

artic

ular

obj

ectiv

es o

f elim

inat

ing

the

back

log

of s

ewer

age

wor

ks.

Agr

icul

ture

, For

estr

y an

d Fi

shin

gW

ar S

ervi

ce L

and

Settl

emen

t Sch

eme(

j)1,

067

1,07

01,

109

873

620

Thes

e re

paym

ents

are

of a

dvan

ces

mad

e to

vet

eran

s of

WW

II or

the

Kor

ea/M

alay

a ca

mpa

igns

for t

he p

urpo

se o

f pro

vidi

ng w

orki

ng c

apita

l fun

ding

, pay

ing

and

effe

ctin

g im

prov

emen

ts a

nd a

cqui

ring

stoc

k, p

lant

and

equ

ipm

ent.

Tran

spor

t and

Com

mun

icat

ion

Rai

lway

pro

ject

s57

557

457

055

251

1R

epay

men

t of t

he p

rinci

pal o

f loa

ns p

rovi

ded

by th

e A

ustra

lian

Gov

ernm

ent t

o up

grad

e an

d st

anda

rdis

e ra

ilway

s in

mai

nlan

d A

ustra

lia.


67

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nR

EPA

YMEN

TSO

ther

Pur

pose

sN

atur

al d

isas

ter r

elie

f3,

404

3,65

513

,155

13,7

8114

,156

Rep

aym

ent b

y S

tate

s an

d Te

rrito

ries

of lo

ans

mad

e by

the

Aus

tralia

n G

over

nmen

t und

er

the

Nat

ural

Dis

aste

r Rel

ief A

rran

gem

ents

(ND

RA

) and

the

repa

ymen

t of o

verp

aid

mon

ies.

AD

VAN

CES

Nat

ural

dis

aste

r rel

ief

80,0

005,

000

5,00

05,

000

5,00

0C

once

ssio

nal i

nter

est r

ate

loan

s to

the

Sta

tes

and

Terr

itorie

s in

resp

ect o

f loa

ns m

ade

by th

em to

indi

vidu

als

affe

cted

by

natu

ral d

isas

ters

.IN

TER

EST

Inte

rest

on

Aus

tral

ian

Gov

ernm

ent L

oans

A

ustr

alia

n C

apita

l Ter

ritor

y G

over

nmen

t deb

t7,

239

6,73

46,

220

5,69

05,

191

Rec

eipt

s fro

m th

e A

ustra

lian

Cap

ital T

errit

ory

of in

tere

st o

n A

ustra

lian

Gov

ernm

ent l

oans

an

d on

Aus

tralia

n G

over

nmen

t sec

uriti

es n

omin

ally

out

stan

ding

on

its b

ehal

f.H

ousi

ng n

omin

atio

ns73

,069

72,3

4671

,574

70,7

6169

,899

Inte

rest

rece

ived

from

the

six

Sta

tes

and

the

Nor

ther

n Te

rrito

ry o

n ou

tsta

ndin

g ad

vanc

es

mad

e to

them

und

er th

e S

tate

s (W

orks

and

Hou

sing

) Ass

ista

nce

Act

s.

Def

ence

Hou

sing

for s

ervi

cem

en4,

059

3,98

73,

909

3,82

63,

736

Inte

rest

pay

men

ts b

y fo

ur S

tate

s on

adv

ance

s to

fina

nce

the

cons

truct

ion,

m

aint

enan

ce a

nd u

pgra

de o

f pub

lic h

ousi

ng fo

r use

by

serv

ice

pers

onne

l.

Budget Paper No. 3

68

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nIN

TER

EST

Hou

sing

and

Com

mun

ity A

men

ities

CSH

A lo

ans

100,

751

97,7

1994

,607

91,3

8188

,053

Inte

rest

rece

ived

from

the

six

Sta

tes

and

the

Nor

ther

n Te

rrito

ry o

n ou

tsta

ndin

g ad

vanc

es

mad

e to

them

und

er th

e va

rious

Hou

sing

Agr

eem

ents

, Nor

ther

n Te

rrito

ry H

ousi

ng

Agr

eem

ent a

nd H

ousi

ng A

ssis

tanc

e A

cts.

Rep

aym

ents

of p

rinci

pal a

nd in

tere

st a

re m

ade

at th

e en

d of

eac

h fin

anci

al y

ear.

Oth

er h

ousi

ng13

,277

12,8

6712

,440

11,9

9711

,537

Pay

men

t of i

nter

est o

n lo

ans

rela

ting

to a

sset

s tra

nsfe

rred

from

the

Aus

tralia

n G

over

nmen

t to

the

Nor

ther

n Te

rrito

ry a

t the

tim

e of

sel

f-gov

ernm

ent i

n 19

78 a

nd to

the

Aus

tralia

n C

apita

l Ter

ritor

y at

the

time

of s

elf-g

over

nmen

t in

1989

.U

rban

wat

er s

uppl

y an

d tr

eatm

ent

949

887

817

740

653

Pay

men

t of i

nter

est o

n lo

ans

to S

outh

Aus

tralia

for w

ater

qua

lity

impr

ovem

ent v

ia

Ade

laid

e an

d N

orth

ern

Tow

ns W

ater

Tre

atm

ent a

nd to

Wes

tern

Aus

tralia

for s

alin

ity

miti

gatio

n vi

a th

e H

ardi

ng R

iver

Dam

pro

ject

.N

orth

ern

Terr

itory

- w

ater

and

sew

erag

e as

sist

ance

610

603

596

589

582

Pay

men

t of i

nter

est o

n lo

ans

rela

ting

to a

sset

s tra

nsfe

rred

from

the

Aus

tralia

n G

over

nmen

t to

the

Nor

ther

n Te

rrito

ry a

t the

tim

e of

sel

f-gov

ernm

ent i

n 19

78.

Cap

tain

s Fl

at (A

bate

men

t of P

ollu

tion)

Agr

eem

ent

31

00

0In

tere

st p

ayab

le u

nder

the

loan

agr

eem

ent w

ith th

e N

ew S

outh

Wal

es G

over

nmen

t in

rela

tion

to c

apita

l wor

ks u

nder

take

n at

Cap

tain

s Fl

at to

pre

vent

pol

lutio

n of

the

Mol

ongl

o R

iver

.Se

wer

age

5,97

05,

512

5,01

04,

456

3,84

8P

aym

ent o

f int

eres

t on

loan

s pr

ovid

ed u

nder

the

Urb

an a

nd R

egio

nal D

evel

opm

ent

(Fin

anci

al A

ssis

tanc

e) A

ct 1

974

to tw

o S

tate

s to

und

erta

ke p

rogr

amm

es

conn

ecte

d w

ith p

rovi

sion

of s

ewer

age

faci

litie

s w

ith p

artic

ular

obj

ectiv

es o

f elim

inat

ing

the

back

log

of s

ewer

age

wor

ks.


69

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)Fu

nctio

nPa

ymen

t titl

e20

06-0

720

07-0

820

08-0

920

09-1

020

10-1

1D

escr

iptio

nIN

TER

EST

Agr

icul

ture

, For

estr

y an

d Fi

shin

gW

ar S

ervi

ce L

and

Settl

emen

t Sch

eme

289

234

177

116

66P

aym

ent o

f int

eres

t on

loan

s to

vet

eran

s of

WW

II or

the

Kor

ea/M

alay

a ca

mpa

igns

whi

ch

wer

e fo

r the

pur

pose

of p

rovi

ding

wor

king

cap

ital f

undi

ng, p

ayin

g an

d ef

fect

ing

impr

ovem

ents

and

acq

uirin

g st

ock,

pla

nt a

nd e

quip

men

t.

Tran

spor

t and

Com

mun

icat

ion

Rai

lway

pro

ject

s29

526

323

120

116

8P

aym

ent o

f int

eres

t on

loan

s pr

ovid

ed b

y th

e A

ustra

lian

Gov

ernm

ent t

o up

grad

e an

d st

anda

rdis

e ra

ilway

s in

mai

nlan

d A

ustra

lia.

Oth

er P

urpo

ses

Nat

ural

dis

aste

r rel

ief

479

2,67

92,

818

2,95

73,

044

Inte

rest

pay

able

by

the

Sta

tes

and

Terr

itorie

s in

resp

ect o

f loa

ns m

ade

by th

e A

ustra

lian

Gov

ernm

ent t

o th

em u

nder

ND

RA

.

Budget Paper No. 3

70

Tabl

e D

1: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

006-

07 to

201

0-11

($'0

00) (

cont

inue

d)*

Item

s so

mar

ked

are

clas

sifie

d as

pay

men

ts th

roug

h th

e S

tate

s.(a

)P

rovi

sion

has

bee

n m

ade

for c

ontin

ued

fund

ing

in th

e fo

rwar

d es

timat

es. H

owev

er, t

he e

xten

sion

of t

he re

leva

nt a

gree

men

ts h

as n

ot b

een

nego

tiate

d an

d th

eref

ore

the

amou

nts

paya

ble

unde

r the

agr

eem

ents

can

not b

e sp

ecifi

cally

iden

tifie

d.(b

)Th

e A

ustra

lian

Gov

ernm

ent i

s in

vest

ing

$551

.8 m

illio

n to

201

1-12

to e

stab

lish

Aus

tralia

n Te

chni

cal C

olle

ges.

Mos

t of t

his

fund

ing

is c

lass

ified

as

Aus

tralia

nG

over

nmen

t ow

n pu

rpos

e ex

pend

iture

.(c

)Th

e A

ustra

lian

Hea

lth C

are

Agr

eem

ents

exp

ire o

n 30

Jun

e 20

08. G

rant

s in

clud

e fu

ndin

g, e

stim

ated

at $

152.

7 m

illio

n ov

er th

e fiv

e ye

ars

to 2

009-

10, t

o im

prov

e ca

re fo

r old

er p

atie

nts

in p

ublic

hos

pita

ls u

nder

the

Cou

ncil

of A

ustra

lian

Gov

ernm

ents

' Hea

lth S

ervi

ces

pack

age.

(d)

Incl

udes

fund

ing

for t

he P

ublic

Hea

lth O

utco

me

Fund

ing

Agr

eem

ents

with

the

Sta

tes

and

Terr

itorie

s, c

urre

ntly

est

imat

ed a

t $81

4 m

illio

n fo

r the

per

iod

from

20

04-0

5 to

200

8-09

.(e

)Th

e A

ustra

lian

Gov

ernm

ent's

fund

ing

to th

e S

tate

s an

d Te

rrito

ries

for t

he fi

fth S

uppo

rted

Acc

omm

odat

ion

Ass

ista

nce

Pro

gram

Agr

eem

ent o

ver t

he p

erio

d 20

05-0

6 to

200

9-10

incl

udes

fund

ing

for a

n In

nova

tion

and

Inve

stm

ent F

und.

The

Sta

tes

and

Terr

itorie

s al

so c

ontri

bute

to th

is F

und,

a c

ompo

nent

of w

hich

is b

eing

adm

inis

tere

d as

Com

mon

wea

lth o

wn-

purp

ose

expe

nditu

re u

ntil

2007

-08

($0.

5 m

illio

n in

200

6-07

and

$0.

5 m

illio

n in

200

7-08

). In

nova

tion

and

Inve

stm

ent F

und

paym

ents

to th

e S

tate

s an

d Te

rrito

ries

are

estim

ated

at $

6.7

mill

ion

in 2

006-

07, $

10.2

mill

ion

in 2

007-

08, $

10.9

mill

ion

in 2

008-

09 a

nd

$11.

1 m

illio

n in

200

9-10

.(f)

Con

sist

ent w

ith P

art 9

of t

he N

ativ

e Ti

tle A

ct 1

993

, the

Aus

tralia

n G

over

nmen

t has

mad

e a

com

mitm

ent t

o as

sist

the

Sta

tes

mee

t the

ir po

tent

ial c

ompe

nsat

ion

liabi

litie

s fo

r the

ext

ingu

ishm

ent o

r im

pairm

ent o

f nat

ive

title

. No

agre

emen

ts h

ave

been

con

clud

ed a

nd a

s a

resu

lt th

ere

are

unlik

ely

to b

e an

y pa

ymen

ts

mad

e in

the

imm

edia

te fu

ture

. Mec

hani

sms

are

in p

lace

to e

nabl

e fu

nds

to b

e m

ade

avai

labl

e as

agr

eem

ents

are

mad

e an

d pa

ymen

ts fa

ll du

e.(g

)A

ll fig

ures

are

indi

cativ

e on

ly.

(h)

The

Aus

tralia

n G

over

nmen

t fro

m 2

008-

09 w

ill d

istri

bute

its

own

purp

ose

expe

nditu

re to

indu

stry

and

com

mun

ity g

roup

s un

der t

he N

atio

nal L

andc

are

Pro

gram

me

Com

mun

ity S

uppo

rt C

ompo

nent

. A re

view

of t

he N

LP c

ondu

cted

in 2

006

foun

d th

at d

irect

fund

ing,

rath

er th

an th

roug

h th

e S

tate

and

Ter

ritor

y go

vern

men

ts, w

ould

pro

vide

sim

pler

, mor

e ef

ficie

nt p

rogr

amm

e de

liver

y.(i)

The

Aus

tralia

n G

over

nmen

t is

prov

idin

g an

add

ition

al $

250

mill

ion

for p

roje

cts

of s

trate

gic

regi

onal

impo

rtanc

e. T

he G

over

nmen

t will

ann

ounc

e th

e su

cces

sful

pr

ojec

ts in

the

near

futu

re. A

n am

ount

of $

7.5

mill

ion

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Tabl

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Budget Paper No. 3

76

Tabl

e D

2: E

stim

ated

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cific

pur

pose

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men

ts to

and

thro

ugh

the

Stat

es, r

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77

Tabl

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Stat

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epay

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Budget Paper No. 3

78

Tabl

e D

2: E

stim

ated

spe

cific

pur

pose

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men

ts to

and

thro

ugh

the

Stat

es, r

epay

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Tabl

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Fund

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ents

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04-0

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title

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ts h

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clud

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s a

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lt th

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are

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ade

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der t

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Pro

gram

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rt C

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nent

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view

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e S

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ore

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ery.

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e A

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lian

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s pr

ovid

ing

an a

dditi

onal

$25

0 m

illio

n fo

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ject

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gion

al im

porta

nce.

The

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ent w

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nce

the

succ

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ul

proj

ects

in th

e ne

ar fu

ture

. An

amou

nt o

f $7.

5 m

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n pe

r ann

um is

als

o be

ing

prov

ided

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er th

e R

oads

to R

ecov

ery

prog

ram

me

for w

ork

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ads

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rpor

ated

are

as o

f the

Sta

tes.

(j)R

epay

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ts a

re o

n a

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is a

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xclu

de n

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T

Budget Paper No. 3

80

Tabl

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Budget Paper No. 3

82

Tabl

e D

3: E

stim

ated

spe

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pur

pose

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men

ts to

and

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the

Stat

es, r

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ts o

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Tabl

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3: E

stim

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spe

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pur

pose

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men

ts to

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thro

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the

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es, r

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ts o

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Budget Paper No. 3

84

Tabl

e D

3: E

stim

ated

spe

cific

pur

pose

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men

ts to

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thro

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the

Stat

es, r

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ts o

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l


85

Tabl

e D

3: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

007-

08 ($

'000

) (co

ntin

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tion

Pay

men

t titl

eSP

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IC P

UR

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PA

YMEN

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Rep

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Rep

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NSW

VIC

QLD

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Budget Paper No. 3

86

Tabl

e D

3: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

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ces

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rest

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men

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Tabl

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TAS

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T

Budget Paper No. 3

88

Tabl

e D

3: E

stim

ated

spe

cific

pur

pose

pay

men

ts to

and

thro

ugh

the

Stat

es, r

epay

men

ts o

f adv

ance

s, a

dvan

ces

and

inte

rest

pay

men

ts, 2

007-

08 ($

'000

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ntin

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*Ite

ms

so m

arke

d ar

e cl

assi

fied

as p

aym

ents

thro

ugh

the

Sta

tes.

(a)

The

Aus

tralia

n G

over

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t is

inve

stin

g $5

51.8

mill

ion

to 2

011-

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est

ablis

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lian

Tech

nica

l Col

lege

s. M

ost o

f thi

s fu

ndin

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cla

ssifi

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s A

ustra

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wn

purp

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nditu

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The

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tralia

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ealth

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e A

gree

men

ts e

xpire

on

30 J

une

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nts

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ude

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tate

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stim

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at $

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7 m

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to im

prov

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r old

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nts

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pita

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ncil

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Incl

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utco

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Fund

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ents

with

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Sta

tes

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urre

ntly

est

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ed a

t $81

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n fo

r the

per

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from

20

04-0

5 to

200

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.(d

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e A

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lian

Gov

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to th

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d Te

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for t

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nce

Pro

gram

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eem

ent o

ver t

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incl

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for a

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as C

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nd $

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vatio

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vest

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t Fun

d pa

ymen

ts to

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Sta

tes

and

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itorie

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e es

timat

ed a

t $6.

7 m

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n in

200

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, $10

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illio

n in

200

7-08

, $10

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illio

n in

200

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and

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t 9 o

f the

Nat

ive

Title

Act

199

3, t

he A

ustra

lian

Gov

ernm

ent h

as m

ade

a co

mm

itmen

t to

assi

st th

e S

tate

s m

eet t

heir

pote

ntia

l com

pens

atio

n lia

bilit

ies

for t

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xtin

guis

hmen

t or i

mpa

irmen

t of n

ativ

e tit

le. N

o ag

reem

ents

hav

e be

en c

oncl

uded

and

as

a re

sult

ther

e ar

e un

likel

y to

be

any

paym

ents

mad

e in

the

imm

edia

te fu

ture

. Mec

hani

sms

are

in p

lace

to e

nabl

e fu

nds

to b

e m

ade

avai

labl

e as

agr

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are

mad

e an

d pa

ymen

ts fa

ll du

e.(f)

All

figur

es a

re in

dica

tive

only

.(g

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is p

rogr

amm

e co

mm

ence

s in

200

8-09

.(h

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e A

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lian

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ernm

ent f

rom

200

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will

dis

tribu

te it

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n pu

rpos

e ex

pend

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dust

ry a

nd c

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unity

gro

ups

unde

r the

Nat

iona

l Lan

dcar

e P

rogr

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e C

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unity

Sup

port

Com

pone

nt. A

revi

ew o

f the

NLP

con

duct

ed in

200

6 fo

und

that

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ct fu

ndin

g, ra

ther

than

thro

ugh

the

Sta

te a

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ory

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rnm

ents

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ould

pro

vide

sim

pler

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e ef

ficie

nt p

rogr

amm

e de

liver

y.(i)

The

Aus

tralia

n G

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t is

prov

idin

g an

add

ition

al $

250

mill

ion

for p

roje

cts

of s

trate

gic

regi

onal

impo

rtanc

e. T

he G

over

nmen

t will

ann

ounc

e th

e su

cces

sful

pr

ojec

ts in

the

near

futu

re. A

n am

ount

of $

7.5

mill

ion

per a

nnum

is a

lso

bein

g pr

ovid

ed u

nder

the

Roa

ds to

Rec

over

y pr

ogra

mm

e fo

r wor

k on

road

s in

un

inco

rpor

ated

are

as o

f the

Sta

tes.

(j)R

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ts a

re o

n a

cash

bas

is a

nd e

xclu

de n

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flow

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tals

for e

ach

Sta

te a

nd T

errit

ory

excl

ude

estim

ates

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prov

ing

Wat

er In

form

atio

n pr

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e be

caus

e ag

reem

ents

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tes

have

not

bee

n ne

gotia

ted

and

the

amou

nts

paya

ble

cann

ot b

e sp

ecifi

cally

iden

tifie

d. H

owev

er, t

otal

s fo

r all

Sta

tes

and

Terr

itorie

s in

clud

e fu

ndin

g fo

r thi

s pr

ogra

mm

e.


89

Tabl

e D

4: E

stim

ated

spe

cific

pur

pose

pay

men

ts d

irect

to lo

cal g

over

nmen

t aut

horit

ies,

200

6-07

to 2

010-

11 ($

'000

)Pa

ymen

t titl

eD

escr

iptio

nD

IREC

T PA

YMEN

TS -

CU

RR

ENT

Dis

abili

ty s

ervi

ces

1,48

91,

529

1,55

81,

601

1,64

6P

aym

ents

to lo

cal g

over

nmen

t aut

horit

ies

in o

rder

to p

rovi

de s

ervi

ces

for p

eopl

e w

ith d

isab

ilitie

s.C

hild

ren'

s se

rvic

es45

,676

40,6

3042

,106

42,7

8143

,451

Fund

s ar

e pr

ovid

ed to

ens

ure

acce

ss to

affo

rdab

le q

ualit

y ch

ild c

are

in p

rogr

amm

es a

dmin

iste

red

by lo

cal g

over

nmen

ts o

n be

half

of th

e A

ustra

lian

Gov

ernm

ent.

Wei

pa S

truc

tura

l Adj

ustm

ent P

acka

ge0

2,20

02,

200

00

This

pay

men

t is

to c

ompe

nsat

e fo

r the

loss

of t

he d

iese

l fue

l reb

ate

whe

n re

spon

sibi

lity

for

Wei

pa's

ele

ctric

ity g

ener

atio

n tra

nsfe

rs fr

om C

omal

co L

td.

Reg

ulat

ion

Red

uctio

n In

cent

ive

Fund

19,8

4750

00

00

A c

ompe

titiv

e gr

ants

pro

gram

me

to e

ncou

rage

loca

l gov

ernm

ents

to re

duce

regu

lato

ry c

ompl

exity

and

co

mpl

ianc

e re

quire

men

ts fo

r hom

e-ba

sed

busi

ness

es.

Stre

ngth

enin

g Ta

sman

ia1,

420

7,42

50

00

Fund

ing

for p

roje

cts

to e

nhan

ce in

frast

ruct

ure,

com

mun

ity fa

cilit

ies

and

serv

ices

in T

asm

ania

. TO

TAL

CU

RR

ENT

68,4

3252

,284

45,8

6444

,382

45,0

97

2009

-10

2010

-11

2006

-07

2007

-08

2008

-09

Budget Paper No. 3

90

Tabl

e D

4: E

stim

ated

spe

cific

pur

pose

pay

men

ts d

irect

to lo

cal g

over

nmen

t aut

horit

ies,

200

6-07

to 2

010-

11 ($

'000

)(con

tinue

d)Pa

ymen

t titl

eD

escr

iptio

nD

IREC

T PA

YMEN

TS -

CA

PITA

LA

usLi

nk(a

)30

3,03

049

6,14

051

5,10

00

0Fu

ndin

g to

loca

l cou

ncils

und

er A

usLi

nk, t

he n

atio

nal l

and

trans

port

plan

. In

2005

-06

coun

cils

rece

ived

fu

ndin

g eq

uiva

lent

to o

ne y

ear's

Roa

ds to

Rec

over

y al

loca

tion

to b

e sp

ent o

ver t

he n

ext t

hree

yea

rs. S

ome

coun

cils

will

als

o re

ceiv

e ad

ditio

nal f

undi

ng fo

r pro

ject

s of

stra

tegi

c re

gion

al im

porta

nce.

Bla

ckbu

rn L

ake

Sanc

tuar

y0

1,80

00

00

Fund

ing

to p

urch

ase

land

adj

acen

t to

the

Bla

ckbu

rn L

ake

San

ctua

ry in

Mel

bour

ne. T

his

will

pro

tect

an

d ex

tend

the

Bla

ckbu

rn L

ake

San

ctua

ry a

rea

and

is c

ondi

tiona

l on

mat

chin

g fu

ndin

g fro

m th

e V

icto

rian

Gov

ernm

ent a

nd th

e C

ity o

f Whi

teho

rse,

and

the

Vic

toria

n G

over

nmen

t pub

licly

rele

asin

g th

e va

luat

ion

of th

e si

te.

Ber

t Hin

kler

Hal

l of A

viat

ion

01,

450

00

0Th

e A

ustra

lian

Gov

ernm

ent w

ill p

rovi

de a

$1.

5 m

illio

n co

ntrib

utio

n to

war

ds th

e co

nstru

ctio

n of

the

Ber

t Hin

kler

Hal

l of A

viat

ion

in B

unda

berg

, Que

ensl

and.

The

Hal

l of A

viat

ion

will

be

a m

useu

m s

how

casi

ng

mem

orab

ilia

rela

ted

to A

ustra

lia's

avi

atio

n hi

stor

y.D

evel

opm

ent o

f sew

erag

e sc

hem

es fo

r Boa

t Har

bour

Bea

ch a

nd S

iste

rs B

each

200

00

00

To s

uppo

rt th

e es

tabl

ishm

ent o

f env

ironm

enta

lly s

usta

inab

le s

ewer

age

treat

men

t fac

ilitie

s at

Sis

ters

Bea

ch a

nd B

oat H

arbo

ur c

omm

uniti

es, T

asm

ania

.Lo

cal c

omm

unity

spo

rtin

g in

fras

truc

ture

667

900

00

0Fu

ndin

g pr

ovid

ed to

loca

l gov

ernm

ent f

or p

roje

cts

to e

nhan

ce c

omm

unity

spo

rting

infra

stru

ctur

e an

dfa

cilit

ies.

Sout

h A

ustr

alia

n St

ate

Aqu

atic

Cen

tre

01,

000

12,0

002,

000

0C

ontri

butio

n to

ass

ist i

n th

e es

tabl

ishm

ent o

f the

Sou

th A

ustra

lian

Sta

te A

quat

ic C

entre

in M

ario

n,

Sou

th A

ustra

lia.

Vict

oria

n ro

ad p

roje

ct2,

000

3,00

020

,000

00

Fund

ing

is b

eing

con

tribu

ted

tow

ards

the

upgr

adin

g of

the

Whi

teho

rse

Roa

d an

d S

prin

gval

e R

oad

inte

rsec

tion

in M

elbo

urne

's e

ast.

TOTA

L C

API

TAL

305,

897

504,

290

547,

100

2,00

00

TOTA

L D

IREC

T PA

YMEN

TS37

4,32

955

6,57

459

2,96

446

,382

45,0

97(a

)Th

ese

estim

ates

exc

lude

a $

25 m

illio

n ex

pens

e in

200

7-08

, $10

0 m

illio

n in

200

8-09

and

$12

5 m

illio

n in

200

9-10

that

wou

ld re

sult

from

a p

rovi

sion

of a

n ad

ditio

nal

$250

mill

ion

for t

he A

usLi

nk S

trate

gic

Reg

iona

l Pro

gram

me

and

whi

ch is

yet

to b

e al

loca

ted

to S

tate

s an

d Te

rrito

ries.

2008

-09

2006

-07

2007

-08

2009

-10

2010

-11


91

Tabl

e D

5: E

stim

ated

spe

cific

pur

pose

pay

men

ts d

irect

to lo

cal g

over

nmen

t aut

horit

ies,

200

6-07

($'0

00)

Pay

men

t titl

eN

SWVI

CQ

LDW

ASA

TAS

AC

TN

TTo

tal

DIR

ECT

PAYM

ENTS

- C

UR

REN

TD

isab

ility

ser

vice

s19

460

768

80

00

00

1,48

9C

hild

ren'

s se

rvic

es13

,588

14,8

875,

757

2,09

01,

409

2,09

30

5,85

245

,676

Wei

pa S

truct

ural

Adj

ustm

ent P

acka

ge0

00

00

00

00

Reg

ulat

ion

Red

uctio

n In

cent

ive

Fund

3,54

93,

064

9,63

756

61,

676

01,

178

177

19,8

47S

treng

then

ing

Tasm

ania

00

00

01,

420

00

1,42

0TO

TAL

CU

RR

ENT

17,3

3118

,558

16,0

822,

656

3,08

53,

513

1,17

86,

029

68,4

32D

IREC

T PA

YMEN

TS -

CA

PITA

LA

usLi

nk90

,200

64,9

5060

,000

49,7

8022

,750

10,3

500

5,00

030

3,03

0B

lack

burn

Lak

e S

anct

uary

00

00

00

00

0B

ert H

inkl

er H

all o

f Avi

atio

n0

00

00

00

00

Dev

elop

men

t of s

ewer

age

sche

mes

for B

oat H

arbo

ur

00

00

020

00

020

0B

each

and

Sis

ters

Bea

chLo

cal c

omm

unity

spo

rting

infra

stru

ctur

e0

667

00

00

00

667

Sou

th A

ustra

lian

Sta

te A

quat

ic C

entre

00

00

00

00

0V

icto

rian

road

pro

ject

02,

000

00

00

00

2,00

0TO

TAL

CA

PITA

L90

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67,6

1760

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8022

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ENTS

107,

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86,1

7576

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52,4

3625

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14,0

631,

178

11,0

2937

4,32

9

Budget Paper No. 3

92

Tabl

e D

6: E

stim

ated

spe

cific

pur

pose

pay

men

ts d

irect

to lo

cal g

over

nmen

t aut

horit

ies,

200

7-08

($'0

00)

Pay

men

t titl

eN

SWVI

CQ

LDW

ASA

TAS

AC

TN

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tal

DIR

ECT

PAYM

ENTS

- C

UR

REN

TD

isab

ility

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vice

s19

862

370

80

00

00

1,52

9C

hild

ren'

s se

rvic

es12

,215

13,4

454,

992

1,86

91,

222

1,81

30

5,07

440

,630

Wei

pa S

truct

ural

Adj

ustm

ent P

acka

ge0

02,

200

00

00

02,

200

Reg

ulat

ion

Red

uctio

n In

cent

ive

Fund

8978

243

1442

030

450

0S

treng

then

ing

Tasm

ania

00

00

07,

425

00

7,42

5TO

TAL

CU

RR

ENT

12,5

0214

,146

8,14

31,

883

1,26

49,

238

305,

078

52,2

84D

IREC

T PA

YMEN

TS -

CA

PITA

LA

usLi

nk(a

)14

6,50

010

1,38

410

7,75

079

,327

35,4

3617

,264

08,

479

496,

140

Bla

ckbu

rn L

ake

San

ctua

ry0

1,80

00

00

00

01,

800

Ber

t Hin

kler

Hal

l of A

viat

ion

00

1,45

00

00

00

1,45

0D

evel

opm

ent o

f sew

erag

e sc

hem

es fo

r Boa

t Har

bour

0

00

00

00

00

Bea

ch a

nd S

iste

rs B

each

Loca

l com

mun

ity s

porti

ng in

frast

ruct

ure

900

00

00

00

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outh

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tralia

n S

tate

Aqu

atic

Cen

tre0

00

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000

00

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000

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toria

n ro

ad p

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TOTA

L C

API

TAL

147,

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106,

184

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79,3

2736

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TAL

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ECT

PAYM

ENTS

159,

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120,

330

117,

343

81,2

1037

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26,5

0230

13,5

5755

6,57

4(a

)Th

ese

estim

ates

exc

lude

a $

25 m

illio

n ex

pens

e in

200

7-08

, $10

0 m

illio

n in

200

8-09

and

$12

5 m

illio

n in

200

9-10

that

wou

ld re

sult

from

a p

rovi

sion

of a

n ad

ditio

nal

$250

mill

ion

for t

he A

usLi

nk S

trate

gic

Reg

iona

l Pro

gram

me

and

whi

ch is

yet

to b

e al

loca

ted

to S

tate

s an

d Te

rrito

ries.


93

95

APPENDIX E: TIMETABLE FOR THE ABOLITION OF STATE TAXES

The first objective of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, signed by the Commonwealth and all States and Territories in 1999, was the achievement of a new national taxation system, including the elimination of several business taxes which were impeding economic activity.

The GST was designed to replace several inefficient indirect taxes — one Commonwealth tax and ten state taxes. The state taxes which were specified in the Intergovernmental Agreement were nominated by the States themselves as being undesirable on efficiency and equity grounds.

Implementation of the Intergovernmental Agreement has already delivered significant economic benefits as a result of a first phase of taxation reforms from as early as 1 July 2000. As part of the initial reforms:

• the Australian Government fully implemented its commitments by:

– removing the wholesale sales tax;

– implementing the GST; and

– ensuring that all GST revenue is provided to the States and Territories; and

• the States and Territories partly implemented their commitments by abolishing a first tranche of state taxes by 1 July 2005:

– accommodation tax;

– financial institution duty;

– quoted marketable securities duty; and

– debits tax.

The Intergovernmental Agreement contained a provision to review the abolition of the remaining state taxes by 2005 so that the States would abolish all of the taxes listed for abolition once GST revenues proved to be sufficient to do so. This was consistent with the third objective of the agreement, which was an improvement in the financial position of all States and Territories, relative to that which would have existed if the previous financial arrangements had continued.

Budget Paper No. 3

96

In 2006, the Australian Government agreed with the States and Territories on a schedule for a second tranche of state taxation reform. The schedule provides for the abolition of a further five taxes:

• non-quoted marketable securities duty;

• lease duty;

• mortgage duty;

• credit arrangement and rental duties; and

• cheque duty.

The schedule also provides for the partial abolition of the final tax listed for abolition in the Intergovernmental Agreement — stamp duty on non-residential property conveyances. The States and Territories have only agreed to the abolition of this tax in respect of non-real non-residential property.

Even though GST revenues are now sufficient so that the States and Territories would not be worse off, relative to if the previous financial arrangements had continued, they have so far refused to fulfil their commitments by nominating a timetable for abolishing this final remaining tax.

Appendix E: Timetable for the abolition of state taxes

97

Tabl

e E1

: Tim

etab

le fo

r the

abo

litio

n of

sta

te ta

xes(a

)

NSW

VI

C

QLD

W

A

SA

TAS

AC

T N

T 20

00-0

1 Ac

com

mod

atio

n ta

x Le

ase

duty

(2

6 Ap

ril 0

1)

Ac

com

mod

atio

n ta

x 20

01-0

2 Fi

nanc

ial

inst

itutio

ns d

uty,

qu

oted

m

arke

tabl

e se

curit

ies

duty

, de

bits

tax

(1 J

an 0

2)

Fina

ncia

l in

stitu

tions

du

ty, q

uote

d m

arke

tabl

e se

curit

ies

duty

Quo

ted

mar

keta

ble

secu

ritie

s du

ty

Fina

ncia

l in

stitu

tions

du

ty, q

uote

d m

arke

tabl

e se

curit

ies

duty

Fina

ncia

l in

stitu

tions

dut

y,

quot

ed

mar

keta

ble

secu

ritie

s du

ty

Fina

ncia

l in

stitu

tions

dut

y,

quot

ed

mar

keta

ble

secu

ritie

s du

ty

Fina

ncia

l in

stitu

tions

du

ty, q

uote

d m

arke

tabl

e se

curit

ies

duty

Fina

ncia

l in

stitu

tions

dut

y,

quot

ed

mar

keta

ble

secu

ritie

s du

ty

2002

-03

N

on-q

uote

d m

arke

tabl

e se

curit

ies

duty

Le

ase

duty

, no

n-qu

oted

m

arke

tabl

e se

curit

ies

duty

, re

ntal

dut

y

2003

-04

N

on-q

uote

d m

arke

tabl

e se

curit

ies

duty

(1

Jan

04)

, ch

eque

dut

y (1

Jan

04)

, le

ase

duty

(1

Jan

04)

Mor

tgag

e du

ty

for e

ligib

le fi

rst

hom

ebuy

ers

(27

May

04)

2004

-05

M

ortg

age

duty

C

redi

t car

d du

ty

(1 A

ug 0

4)

Le

ase

duty

, ch

eque

dut

y

2005

-06

D

ebits

tax

Deb

its ta

x, le

ase

duty

(1 J

an 0

6),

cred

it bu

sine

ss

duty

(1 J

an 0

6)

Deb

its ta

x D

ebits

tax,

par

t of

mor

tgag

e du

ty (1

Jan

06)

Deb

its ta

x D

ebits

tax

Deb

its ta

x,

elec

troni

c de

bits

ta

x

2006

-07

R

enta

l dut

y (1

Jan

07)

H

ire d

uty

(1 J

an 0

7),

non-

quot

ed

mar

keta

ble

secu

ritie

s du

ty

(1 J

an 0

7)

50 p

er c

ent

mor

tgag

e du

ty,

rent

al d

uty

(1 J

an 0

7)

Oth

er m

inor

du

ties

50 p

er c

ent

mor

tgag

e du

ty

Non

-rea

l no

n-re

side

ntia

l co

nvey

ance

du

ty

Non

-quo

ted

mar

keta

ble

secu

ritie

s du

ty,

leas

e du

ty

98

Budget Paper No. 3

Tabl

e E1

: Tim

etab

le fo

r the

abo

litio

n of

sta

te ta

xes(a

) (con

tinue

d)

N

SW

VIC

Q

LD

WA

SA

TA

S A

CT

NT

2007

-08

Ren

tal d

uty,

le

ase

duty

(1

Jan

08)

50

per

cen

t m

ortg

age

duty

(1

Jan

08)

33

per

cen

t of

rem

aini

ng re

ntal

du

ty a

nd

mor

tgag

e du

ty

Mor

tgag

e du

ty

Ren

tal d

uty

Ren

tal d

uty

2008

-09

Non

-quo

ted

mar

keta

ble

secu

ritie

s du

ty

(1 J

an 0

9)

M

ortg

age

duty

(1

Jan

09)

M

ortg

age

duty

67

per

cen

t of

rem

aini

ng re

ntal

du

ty a

nd

mor

tgag

e du

ty

Non

-rea

l no

n-re

side

ntia

l co

nvey

ance

du

ty

2009

-10

50 p

er c

ent

mor

tgag

e du

ty

(1 J

an 1

0)

50

per

cen

t no

n-re

al

non-

resi

dent

ial

prop

erty

co

nvey

ance

dut

y (1

Jan

10)

R

enta

l dut

y,

mor

tgag

e du

ty,

50 p

er c

ent

non-

real

no

n-re

side

ntia

l co

nvey

ance

du

ty, 5

0 pe

r ce

nt n

on-q

uote

d m

arke

tabl

e se

curit

ies

duty

Le

ase

duty

N

on-r

eal

non-

resi

dent

ial

conv

eyan

ce

duty

2010

-11

Mor

tgag

e du

ty

(1 J

an 1

1)

N

on-r

eal

non-

resi

dent

ial

conv

eyan

ce d

uty

(1 J

an 1

1)

Non

-rea

l no

n-re

side

ntia

l co

nvey

ance

du

ty

Non

-rea

l no

n-re

side

ntia

l co

nvey

ance

du

ty,

non-

quot

ed

mar

keta

ble

secu

ritie

s du

ty

N

on-q

uote

d m

arke

tabl

e se

curit

ies

duty

2011

-12

2012

-13

Non

-rea

l no

n-re

side

ntia

l co

nvey

ance

du

ty

(a)

Abol

ition

is in

full

and

effe

ctiv

e on

1 J

uly

unle

ss o

ther

wis

e sp

ecifi

ed.

99

Appendix E: Timetable for the abolition of state taxes

Tabl

e E2

: Sta

te ta

xes

abol

ishe

d be

fore

1 J

uly

2000

or n

ever

impo

sed

NSW

VI

C

QLD

W

A

SA

TAS

AC

T N

T C

hequ

e du

ty

Acco

mm

odat

ion

tax,

che

que

duty

, no

n-re

al

non-

resi

dent

ial

conv

eyan

ce d

uty

Acco

mm

odat

ion

tax,

che

que

duty

, fin

anci

al

inst

itutio

ns d

uty

Acco

mm

odat

ion

tax

Acco

mm

odat

ion

tax

Acco

mm

odat

ion

tax,

che

que

duty

Ac

com

mod

atio

n ta

x, c

hequ

e du

ty,

mor

tgag

e du

ty

Mor

tgag

e du

ty

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