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  • Costs

    The cost of administering GST is calculated by applying the ATO’s strategic costing framework (SCF). This is a cost attribution model consistent with the Australian Government’s accrual-based outcomes and programs costing framework. It calculates the proportion of the ATO’s total operating expenses that relate to GST administration activities on a full-cost basis.

    GST administration costs are monitored monthly, with oversight provided by the ATO GST Product Committee. The GST costs are endorsed by the Chief Finance Officer and are subject to an annual independent audit by the Australian National Audit Office (ANAO). Costs are reported against the Program Framework Deliverables set out in Schedule B of the GST Administration Performance Agreement.

    The ATO prepares a Schedule B estimate for consideration by the states and territories ahead of each financial year. Once agreed, the estimate serves as the initial budget for the cost of GST administration for the upcoming financial year. The SCF maps GST activities to program deliverables to capture the direct costs to administer the GST. The percentage of direct costs is applied to the ATO’s indirect costs to calculate the indirect costs. The direct and indirect costs are then added together to derive the total cost of administering the GST.

    The Schedule B estimate of $599.2 million will be the amount recovered from the states and territories for administration of the GST system in 2018–19 against preliminary(a) actual costs of $659.0 million. Subject to agreement from the states and territories, the actual cost of GST administration (as determined by the SCF) will be recovered in future years.

     Figure 3: Schedule B estimate against actual costs for 2015–2019Actual administration costs against the schedule B estimate for the last five financial years. 2014–15: actual $681.1m; schedule B $688.5m. 2015–16: actual $699.4m; schedule B $679.6m.  2016–17: actual $703.1m; schedule B $682.4m.  2017–18: actual $685.0m; schedule B $631.1m. 2018–19: actual $659.0m; schedule B $599.2m.

    NOTES:(a) Figures provided are subject to audit

    See also:

    Breakdown of costs (actuals)

    Actual costs for 2018–19 reduced by 3.8% from 2017–18. Proportionately, indirect costs reduced by a greater amount than direct costs, as a result of advances in the ATO’s ability to analyse indirect costs. This analysis enabled the realignment of some indirect activities to ATO programs outside of the administration of GST.

    Table 1: Breakdown of costs

    Type of costs




    Direct costs




    Indirect costs








    The increasing gap between actual costs for 2018–19 and the Schedule B estimate is influenced by the timing of the formulation of the Budget estimate. This is well before the financial year commences, when the ATO’s final budget for the financial year is settled. As such, there is an inevitable difference between the budget figure and actual costs. This difference has been compounded in recent years due to a widening gap in the way the indirect cost estimate is calculated for establishing the budget against the actual amount of the ATO’s indirect costs. This difference will be substantially addressed as part of the reversion to recovering the actual cost of GST administration.

    The direct cost of the GST voluntary compliance program in 2018–19 was $72.9 million, consistent with 2017–18 ($72.8 million).

      Last modified: 01 Jul 2020QC 61031