Budget Measures 2009-10 - Budget Paper No. 2 - Part 2: Expense Measures

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Part 2: Expense Measures

Treasury

Australian Bureau of Statistics — Census field staff funding

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Bureau of Statistics	-	-	12.3	67.2	-

The Government will provide $79.5 million to the Australian Bureau of Statistics (ABS) over two years from 2010‑11 for remuneration of field staff for the 2011 Census of Population and Housing.

The funding will enable the ABS to provide remuneration which reflects the workload of Census field staff, consistent with workplace legislation.

Australian Bureau of Statistics — statistical capacity

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Bureau of Statistics	-	15.0	15.0	15.0	15.0

The Government will provide $60.0 million over four years to maintain the statistical capacity of the Australian Bureau of Statistics. The funding will support the scope and quality of statistical outputs over the forward years.

Australian Office of Financial Management — additional funding

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Office of Financial Management	-	4.1	4.6	5.0	5.5

The Government will provide $19.2 million over four years to the Australian Office of Financial Management to undertake the debt management activities resulting from the deterioration in the global economy. The funding will support market liaison and increased operational capacity.

Australian Prudential Regulation Authority — continuation of the National Claims and Policies Database

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Prudential Regulation Authority	-	1.3	0.7	0.7	0.7
Related revenue ($m)
Australian Prudential Regulation Authority	-	1.3	0.7	0.7	0.7

The Government will provide $3.5 million over four years to the Australian Prudential Regulation Authority (APRA) to continue to operate the National Claims and Policies Database (NCPD).

The NCPD provides a central database for public liability and professional indemnity insurance information, allowing APRA and other stakeholders to identify and monitor trends, establish industry benchmarks, set levels for insurance premiums and allocate reserves for claims.

The cost of the NCPD will continue to be recovered from industry through a special levy on regulated institutions that offer public and product liability and professional indemnity insurance.

Australian Securities and Investments Commission — enhanced monitoring and enforcement capabilities

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Securities and Investments Commission	-	15.4	15.7	15.9	16.1

The Government will provide $63.2 million over four years to support the Australian Securities and Investments Commission (ASIC) to meet the costs of additional specialist and staff, legal and forensic resources, and support three new full‑time Commissioners appointed by the Government in December 2008.

This will enable ASIC to increase monitoring and enforcement activities, market research and analysis; increase the supervision of brokers, intermediaries, operators of exchange trade products and markets; promote higher standards for risk assessment and risk management practices; and manage conflicts of interest by market participants.

Council of Australian Governments' decision — Australian Competition and Consumer Commission — implementing a system of national product safety regulation

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Competition and Consumer Commission	1.4	4.5	5.5	6.2	6.9
Related capital ($m)
Australian Competition and Consumer Commission	-	0.1	..	0.1	0.1

The Government will provide $24.8 million over five years to the Australian Competition and Consumer Commission to implement reforms to Australia's consumer product safety framework. This measure implements the Australian Government's commitments in respect of decisions taken by Council of Australian Governments during 2008.

This measure will enhance consumer safety in all States and Territories by delivering a single national product safety law with consistent enforcement by the Australian Government and state and territory regulators. These reforms include an increased ability to identify hazards posed by consumer products, a single point of information provision for consumers and an improved recall system.

This measure includes $0.2 million in capital funding over four years for developing IT systems.

Council of Australian Governments' decision — Commonwealth investment in closing Indigenous data gaps

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Total	-	nfp	nfp	nfp	nfp

The Government will provide additional funding to Commonwealth data agencies to address deficiencies in Indigenous data which are required to enable reporting against the performance indicators identified in the National Indigenous Reform Agreement with the States and Territories. This measure implements the Commonwealth's commitments in respect of decisions taken by Council of Australian Governments during 2008.

Provision has been made in the Contingency Reserve to reflect this decision, with the final amounts to be settled after consultation with the States and Territories on data collection issues.

Council of Australian Governments' decision — implementing the Council of Australian Governments' federal financial framework — expanded roles

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Institute of Health and Welfare	0.7	8.9	9.7	4.9	4.8
Australian Bureau of Statistics	-	4.4	2.8	4.2	2.1
Productivity Commission	0.9	3.4	3.4	3.1	3.0
Department of Education, Employment and Workplace Relations	-	1.5	2.5	1.0	1.0
Department of the Prime Minister and Cabinet	-	1.1	2.6	2.9	2.9
Total	1.6	19.4	21.0	16.0	13.8
Related capital ($m)
Australian Institute of Health and Welfare	-	1.3	-	-	-
Department of the Prime Minister and Cabinet	-	0.8	-	-	-
Australian Bureau of Statistics	-	0.4	0.3	-	-
Total	-	2.4	0.3	-	-

The Government will provide $74.5 million over five years (including $2.7 million in capital funding) to implement a performance reporting framework that supports the Intergovernmental Agreement on Federal Financial Relations. This measure implements the Australian Government's commitments in respect of decisions taken by COAG during 2008.

This measure involves funding for the Australian Institute of Health and Welfare, the Australian Bureau of Statistics, and the National Centre for Vocational Education Research to develop data for performance indicators specified in the six new National Agreements and new National Partnerships with the States and Territories.

In addition, funding of $10.2 million over four years (including $0.8 million in capital funding), will be provided for the COAG Reform Council to undertake an expanded role in monitoring, assessing and reporting under the new performance reporting framework.

This measure also includes funding for the Productivity Commission to collate performance information for the COAG Reform Council's analysis and assessment, report on the economic impacts and benefits of COAG's reform agenda and provide relevant data and secretariat services to the Indigenous Expenditure Report Steering Committee.

Education Tax Refund — public awareness campaign

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Taxation Office	9.3	-	-	-	-

The Government will provide $9.3 million in 2008‑09 to the Australian Taxation Office to provide information on the Education Tax Refund to eligible claimants. The information campaign encourages eligible claimants to retain receipts so they can apply for a tax refund on eligible expenses incurred as a result of educating their primary and secondary school children.

The Education Tax Refund will help working families meet the cost of educating their children through primary and secondary school.

Federal finances — additional decisions — reward payment for improved Year 12 attainment levels

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	-	-	50.0	-

The Commonwealth will make available up to $100.0 million of reward payments for the achievement of improved performance against the national Year 12 attainment levels.

Up to $50.0 million will be paid in 2011‑12 based on 2010 participation data and up to $50.0 million be paid in 2013‑14 based on 2012 attainment data.

Federal finances — rationalising payments — film and literature classification

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	4.7	-0.6	-0.6	-0.6

The Commonwealth will meet its future payment commitments to the States in respect of film and literature classification by providing a single payment of $4.7 million in 2009‑10 and ceasing future annual payments.

One of the objectives of COAG's new federal financial framework is to rationalise the number of payments made between the Commonwealth and the States. COAG has provided in‑principle endorsement for several payments to be cashed out, with one final payment equal to the present value of the future stream of payments.

The Cooperative National Censorship Scheme ensures that Australians are able to make informed decisions about films, publications and computer games which they, or those in their care, may view, read or play. The Commonwealth compensates the States for revenues they gave up with the introduction of the national scheme. Cashing out these payments does not affect the on‑going operation of the scheme, which will now be fully funded by the Commonwealth.

Federal finances — rationalising payments — GST compensation

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	309.4	-301.9	-1.0	-1.0	-1.0

The Government will recover an overpayment of compensation to the States in 2009‑10 in respect of GST concessions provided to small businesses and non‑profit organisations.

In 2004‑05, the Commonwealth and the States agreed to allow small businesses and non‑profit organisations which voluntarily registered for the GST to pay and report GST on an annual rather than monthly or quarterly basis. The Commonwealth agreed to compensate the States for the consequential deferral of GST revenue. Final tax return data indicates that the impact of the measure on GST revenue was much lower than forecast, resulting in a significant overpayment of compensation.

The amount to be recovered is the present value of the overpayment less the present value of the stream of future annual payments. In the 2008‑09 Budget, it was expected that the recovery would be in 2008‑09. The Government will now recover the net overpayment of $301.9 million in 2009‑10. This arrangement will extinguish all current and future Commonwealth and State commitments in respect of this measure.

Federal finances — rationalising payments — organ transplantation services

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	16.1	-2.1	-2.1	-2.1

The Commonwealth will meet its future payment commitments to the States in respect of organ transplantation services by providing a single payment of $16.1 million in 2009‑10 and ceasing future annual payments.

Under long standing arrangements, the Commonwealth reimburses New South Wales and South Australia for 40 per cent of the cost of certain organ and tissue transplantation‑related services that are conducted by the Australian Red Cross Blood Service. The States will now be responsible for fully funding these services.

Federal finances — rationalising payments — repatriation general hospitals

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	12.3	-1.8	-1.7	-1.7

The Commonwealth will meet its future payment commitments to the States in respect of repatriation general hospitals by providing a single payment of $12.3 million in 2009‑10 and ceasing future annual payments.

The Commonwealth provides payments to the States related to staff transfer costs such as accrued leave credits, income maintenance and superannuation differentials, in accordance with agreements on the integration of the Commonwealth's former repatriation general hospitals with the state hospital systems.

Federal finances — rationalising payments — Snowy Hydro Ltd tax compensation

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	376.4	-46.7	-46.7	-46.7	-46.7

The Commonwealth will meet its future payment commitments to New South Wales and Victoria in respect of Snowy Hydro Ltd tax compensation by providing a single payment of $376.4 million in 2008‑09 and ceasing future annual payments.

The Commonwealth provides compensation to New South Wales and Victoria for Commonwealth taxes paid by Snowy Hydro Ltd in proportion to the States' shareholdings. Prior to its corporatisation, these taxes would have been payable to the shareholders through tax equivalence schemes.

Federal finances — rationalising payments — social housing subsidy program

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	9.9	-2.0	-2.0	-2.0

The Commonwealth will meet its future payment commitments to the States under the social housing subsidy program by providing a single payment of $9.9 million in 2009‑10 and ceasing future annual payments.

The social housing subsidy program provides funding to subsidise the costs of financing rental accommodation for low‑ and middle‑income earners.

Federal finances — rationalising payments — state cellar door subsidy savings

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	-184.6	-	-	-

The States have previously agreed to return to the Commonwealth savings arising to them from the Commonwealth's introduction of the wine equalisation tax producer rebate. The Commonwealth will recover these savings in a single payment in 2009‑10.

The present value of estimated State savings since the Commonwealth introduced the wine equalisation tax producer rebate is $63.0 million, of which $3.2 million has already been recovered. Rather than the States returning these savings to the Commonwealth annually, the Commonwealth will recover the present value of the future stream of annual payments. The net impact in 2009‑10 will be that the Commonwealth will recover $184.6 million. This will extinguish all current and future State commitments in respect of this measure.

First Home Owners Boost — extension

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	486.2	47.3	5.5	-

The Government will provide $539.0 million over three years to extend the First Home Owners Boost for six months to support the housing market and first home buyers.

For eligible first home buyers entering into contracts between 1 July 2009 and 30 September 2009 (inclusive) the First Home Owners Boost will continue to provide $7,000 for the purchase of established homes and $14,000 for the purchase of new homes. In combination with the existing $7,000 First Home Owners Scheme grant, this means that first home owners will receive a total of $14,000 for established homes and $21,000 for new homes.

For eligible first home buyers entering into contracts between 1 October 2009 and 31 December 2009 (inclusive) the First Home Owners Boost will provide $3,500 for the purchase of established homes and $7,000 for the purchase of new homes. When combined with the existing First Home Owners Scheme grant, this means that first home owners will receive a total of $10,500 for established homes and $14,000 for new homes.

Global recession — additional funding

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Securities and Investments Commission	-	-	18.7	-	-
Department of the Treasury	-	-	5.0	-	-
Total	-	-	23.7	-	-

The Government will provide $23.7 million in 2010‑11 to the Treasury and the Australian Securities and Investments Commission (ASIC) to continue, for an additional year, the funding for the Global financial crisis — additional funding for regulators and the Treasury measure announced in the Mid‑Year Economic and Fiscal Outlook 2008‑09. This will help ensure that Australia's financial regulators continue to have the resources to maintain strong oversight of Australia's financial system during the global financial crisis.

Grocery mandatory unit pricing

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Competition and Consumer Commission	-	1.1	1.1	-	-

The Government will provide $2.2 million over two years to the Australian Competition and Consumer Commission to establish a unit pricing code for retail supermarkets. The unit pricing scheme will be implemented via a mandatory industry code under Part IVB of the Trade Practices Act 1974. This will provide consumers with pricing information based on standard units of weight, or other applicable measures, so that consumers can compare prices between products.

Nation Building and Jobs Plan — Tax Bonus for Working Australians — reduction

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Taxation Office	-435.0	-	-	-	-

The Government agreed to an amendment to the 2009 Updated Economic and Fiscal Outlook measure Nation Building and Jobs Plan — Tax bonus for working Australians to reduce by $50 each of the Bonus payment amounts. A $900 Bonus is being paid to eligible taxpayers with a taxable income in 2007‑08 of $80,000 or less. A $600 Bonus is being paid to eligible taxpayers with a taxable income in 2007‑08 between $80,001 and $90,000, and a $250 Bonus is being paid to eligible taxpayers with a taxable income in 2007‑08 between $90,001 and $100,000.

This measure was agreed with the minor parties as part of negotiating the Nation Building and Jobs Plan announced on 3 February 2009.

Secure and sustainable pensions — Pensioner and Beneficiary Living Cost Index

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Bureau of Statistics	-	9.3	4.4	3.5	1.0
Related capital ($m)
Australian Bureau of Statistics	-	0.2	0.1	0.1	-

The Government will provide $18.5 million over four years to the Australia Bureau of Statistics to develop a new Pensioner and Beneficiary Living Cost Index, for use in the cost of living indexation of base rates of income support pensions covered by the Government's pension reform. These include the Age Pension, Disability Support Pension, Carer Payment and Service Pension. This includes $0.3 million in capital funding.

Strategic compliance — continuing to address the abuse of tax havens

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Crime Commission	-	1.8	3.2	2.4	2.0
Australian Transaction Reports and Analysis Centre	-	0.8	0.7	0.7	0.7
Commonwealth Director of Public Prosecutions	-	0.5	1.6	3.4	3.8
Attorney-General's Department	-	0.4	0.4	0.4	0.4
Australian Taxation Office	-	-	28.7	24.6	20.9
Australian Federal Police	-	-	7.9	7.5	7.4
Australian Securities and Investments Commission	-	-	0.8	0.7	0.4
Total	-	3.5	43.2	39.7	35.6
Related revenue ($m)
Australian Taxation Office	-	-	61.0	56.0	48.0
Related capital ($m)
Australian Transaction Reports and Analysis Centre	-	0.1	-	-	-
Australian Crime Commission	-	..	-	-	-
Total	-	0.2	-	-	-

The Government will provide $122 million over four years to continue to address tax fraud involving the use of offshore tax havens. This additional funding maintains the Government's commitment to deal effectively with offshore tax evasion and will allow the continuation of cross‑agency investigations and prosecutions of tax haven abuse.

This measure represents an extension of the work commenced under Project Wickenby. This measure will also complement international developments combating the abuse of tax havens.

The measure includes $0.1 million in capital funding in 2009‑10 (including $0.1 million for the Australian Transactions Reporting and Analysis Centre and $25,000 for the Australian Crime Commission) to further develop information and communication technology capabilities between agencies to support the strategic intelligence function.

This measure is estimated to result in an additional $165.0 million in revenue in fiscal balance terms over three years from 2010‑11. In underlying cash terms, the expected increase in receipts is $127.0 million over three years from 2010‑11.

Strategic compliance — managing taxation compliance risks related to Australia's economic recovery

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Taxation Office	-	44.2	80.4	86.2	91.3
Related revenue ($m)
Australian Taxation Office	-	105.0	175.0	470.0	525.0

The Government will provide $302.1 million over four years to the Australian Taxation Office (ATO) to address known risks in the tax system that could further erode Australia's revenue base and to address risks that will emerge as Australia's economy recovers from the economic downturn and returns to growth. Three areas for additional compliance attention are large and medium businesses, data matching to identify compliance anomalies and non‑compliance by individuals with high net wealth.

As Australia's economy recovers, risks will emerge or magnify as companies seek to maximise competitive advantage via tax minimisation strategies, particularly in the large and medium business market.

The ATO will also undertake additional compliance activity in relation to individuals with net wealth between $5 million and $30 million.

The ATO will also increase its compliance data matching activities to identify unreported income and obligations in relation to public, private and foreign owned companies.

This measure is estimated to result in an additional $1.3 billion in revenue in fiscal balance terms over four years. In underlying cash terms, the expected increase in receipts is $820 million over four years.

This measure will help to protect the revenue base and promote community confidence in the tax system.

Strategic compliance — promoting a level playing field for small business

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Taxation Office	-	15.6	17.2	17.6	15.9
Related revenue ($m)
Australian Taxation Office	-	59.5	72.2	87.2	94.5
Related capital ($m)
Australian Taxation Office	-	-	2.3	2.3	-

The Government will provide $70.9 million over four years to the Australian Taxation Office (ATO) to help ensure that small business and other taxpayers continue to meet taxation and other superannuation obligations during the global economic downturn.

This measure will allow the early identification of and engagement with small businesses that may engage in cash economy activities, tax minimisation schemes and serial insolvency practices, and help maintain employee entitlements.

The measure includes $4.6 million in capital funding for the ATO in 2010‑11 and 2011‑12 to implement system changes to support early identification and engagement.

This measure is estimated to result in an additional $313.4 million in revenue in fiscal balance terms over four years. In underlying cash terms, the expected increase in receipts is $216.7 million over four years.

Strategic compliance — supporting businesses and other taxpayers in financial distress

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Taxation Office	-	24.4	24.7	24.1	26.8
Related revenue ($m)
Australian Taxation Office	-	5.0	17.0	3.0	4.0

The Government will provide $100.1 million over four years to the Australian Taxation Office (ATO) to assist small businesses and other taxpayers experiencing financial distress to remain viable and stay engaged in the tax system.

The ATO will provide assistance to at‑risk taxpayers, including early identification of those experiencing financial distress and continuing to provide flexible payment arrangements. Early intervention with struggling businesses will help them to stay in business and continue to contribute to tax receipts.

This measure is estimated to result in an additional $29.0 million in revenue in fiscal balance terms over four years. In underlying cash terms, the expected increase in receipts is $815.0 million due to less debt write‑offs.

Streamlining tax law design — response to the Tax Design Review Panel report

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Department of the Treasury	-	0.6	0.6	0.6	-

The Government will provide $1.8 million over three years to the Department of the Treasury to support the engagement of private sector experts to provide advice on tax policy design. This arose from a recommendation by the Tax Design Review Panel.

Further information can be found in the press release of 22 August 2008 issued by the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs.

Superannuation — contributing to sustainable retirement income reform by temporarily reducing the Government co‑contribution

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Taxation Office	-	-385.0	-395.0	-410.0	-205.0

The Government will temporarily reduce the matching rate and maximum co‑contribution that is payable on an individual's eligible personal non‑concessional superannuation contributions, with effect from 1 July 2009. This measure is estimated to save $1.395 billion over the forward estimates period. This measure contributes to sustainable retirement income reform.

The temporary reduction in the co‑contribution matching rate is not expected to have a significant impact on the level of superannuation contributions because the scheme will remain very generous — the matching rate will continue to provide a return on contributions of at least 100 per cent.

Under this measure, the matching rate will be:

100 per cent for 2009‑10, 2010‑11 and 2011‑12, with a maximum co‑contribution of $1000, reduced by 3.333 cents for each dollar by which the person's total income exceeds the shade out threshold for receiving the full co‑contribution;
125 per cent for 2012‑13 and 2013‑14, with a maximum co‑contribution of $1,250, reduced by 4.167 cents for each dollar of total income above the shade out threshold; and
150 per cent from 2014‑15 onwards, with a maximum co‑contribution of $1,500, reduced by 5 cents for each dollar of total income above the shade out threshold.

Wheat export marketing — access arrangements

Expense ($m)
	2008‑09	2009‑10	2010‑11	2011‑12	2012‑13
Australian Competition and Consumer Commission	0.9	0.6	-	-	-
Department of Agriculture, Fisheries and Forestry	-0.9	-0.6	-	-	-
Total	-	-	-	-	-

The Government will redirect funding of $1.5 million over two years from 2008‑09 from the Department of Agriculture, Fisheries and Forestry to the Australian Competition and Consumer Commission (ACCC) for its new role under the Wheat Export Marketing Act 2008.

Under the Act, wheat exporters that own a port export wheat facility must have an access undertaking approved by the ACCC by 1 October 2009, unless the facility is subject to a certified state‑based access regime. An access undertaking contains the terms and conditions under which access to port terminal services is offered to other wheat exporters.

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