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Statement of Commonwealth financial transactions - January 1984



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iVOllNDSTER FO R F IN A N C E

EMBARGO N Οβ4/6 ■

STATEMENT OF COMMONWEALTH FINANCIAL TRANSACTIONS - JANUARY 1984 ACTING MINISTER FOR FINANCE, SENATOR THE HON PETER WALSH

The acting Minister for Finance, Senator Walsh, today released the Commonwealth Government's Statement of Financial Transactions for January. The aggregates for the month are summarised below:

January 1984 Seven Months to January 1984 Increase on Increase on

Year Earlier Year Earlier

$m per cent $m per cent

Outlays 4135 18.0 31566 15.2

Receipts 3909 22.1 23461 4.9

Deficit 226 8105

The results are generally consistent with normal seasonal movements of aggregates, with outlays in January being relatively low and receipts continuing to increase on those recorded in recent months, resulting in only a small

addition to the cumulative deficit.

With Medicare payments having commenced in February and public debt interest payments expected to be strong, outlays

in the coming months are likely to be higher than in January. Consistent with the pattern of recent years, the

deficit could be expected to rise above the budgeted figure of $8361m before the usual strong increase in receipts

produces a net surplus in the June quarter.

2

An extensive mid-year review of all outlays and receipts is currently in progress and, when completed later this month,

will provide the Government with a clearer picture of the likely outcomes for 1983-84.

OUTLAYS

Strong outlays growth in January (up 18% compared to January 1983) brought cumulative outlays growth closer to the 15.8% estimate for the full year.

The most notable contributing factor to the large increase in January monthly outlays was the payment of an $80m advance to the Health Insurance Commission to enable it to pay Medicare benefits from 1 February 1984.

The following are the main functions and principal areas which have contributed to the increase in cumulative outlays for the seven months to January 1984 compared to the corresponding period of 1982-83:

Function Principal areas of Increase in Budgeted

higher cumulative cumulative full year

outlays outlays increase

$m per cent per cent

Defence - progress payments for equipment 464 18.6 10.4

Education - Universities, CAE's and Tertiary Education Scheme 97 3.9 10.7

Health - medical and nursing home

benefits 371 19.4 25.4

Social Security

and Welfare - unemployment benefits and pensions payments 1572 20.3 19.3

3

Function Principal areas of Increase in Budgeted

higher cumulative cumulative full year

outlays outlays increase

Housing - State Public and Welfare

$m pef cent per cent

housing, First Home Owners scheme 112 25.2 23.1

Labour and Employment - wage pause program, Community Employment Program and youth and

special training 191 68.0 64.1

Payments to States -the

732 11.3 11.0

Public Debt

Interest -r

430 23.5 22.4

A more detailed explanation of the significant variations in outlays is provided at Attachment A.

RECEIPTS

Total receipts in the first seven months of 1983-84 were $ 23461m, 4.9 per cent higher than in the corresponding period of 1982-83. The Budget estimate is for receipts growth of

8.6 per cent for the year as a whole.

In terms of the comparison with the corresponding seven months of 1982-83, a feature of the result to end-January was the continued strong growth in sales tax and excise duty receipts evident in earlier months (up 21.0 per cent and 15.7 per cent

respectively).

Net PAYE receipts to end-January were down 4.4 per cent on the corresponding period of 1982-83, reflecting a substantial

increase in PAYE refunds (up 22.1 per cent) and a marginally lower level of gross PAYE receipts (down 0.8 per cent).

4

As noted in comments on receipts collections for earlier months, the lower level of net PAYE receipts so far this year largely reflected the effects of the November 1982 tax cuts and rebate concessions and the faster rate of issue of refunds this

year. By end-January, however, the effects of the tax cuts and rebate concessions in holding gross PAYE collections below the collections in the corresponding months of 1982-83 had been virtually offset by growth in employment and wage and salary

earnings. The effect on net PAYE receipts of the faster issue of refunds will also dissipate as the year progresses.

Income tax receipts from other individuals as recorded in the CFT format in the seven months to end-January increased by

40.3 per cent over the corresponding period of 1982-83. This largely reflected the inclusion in this item of receipts from the Prescribed Payments System which commenced operation in September 1983. Prescribed payments receipts amounted to $33m

in January giving cumulative collections to date of $108m.

Company tax collections in the first seven months of 1983-84 were $1916m - 4.2 per cent down on the corresponding period last year. The collections to end-January include about $113m attributable to the Taxation (Unpaid Company Tax) legislation. Other receipts attributable to this legislation, which are

allocated to the 1 Other taxes fees and fines' head of the statement, totalled $44m in the first seven months of 1983-84.

Collections of bank account debit tax are also included in the other taxes, fees and fines head of the statement. These amounted to $107m in the seven months to end-January.

The net effect of these and other collection results to

end-January was that total taxation revenue was 4.5 per cent higher than in the corresponding period of 1982-83.

5

DEFICIT

The deficit for January was $226m, the lowest of any month so far this financial year, bringing the deficit for the seven months to end-January to $8105m, $3064m higher than in the first seven months of 1982-83.

CANBERRA

16 February 1984

ATTACHMENT A

SUMMARY OF MAJOR VARIATIONS TO CUMULATIVE OUTLAYS:

JULY-JANUARY 1983-84 COMPARED WITH JULY-JANUARY 1982-83

In many cases the variations noted below are the result of

budgeted increases and/or timing differences between the

two periods in the comparison. •The,·major variations in

each of the major functions are as follows:

. Variation

$m

DEFENCE

. Increased payments under Foreign Military Sales 249

arrangements on the F-18A fighter aircraft and

FFG guided missile frigates leading to increased

expenditure on Aircraft ($139m) and Naval

Construction ($110m).

. Increased expenditure on Other Capital Equipment 74

and Stores ($49m) and Supporting Equipment and

Stores ($26m).

. Increased payments for Forces Manpower due to 33

salary increases and greater retention rates at

higher salary levels.

. Increased payments under the Defence Forces 25

Retirement and Death Benefits scheme due to

increased pension rates and higher numbers of

pensioners.

ATTACHMENT A

2.

Variation

$m

. Increased expenditure on Plant and Equipment for 17

Defence Production.

EDUCATION Up $97m

. Increased recurrent expenditure in the States 81

for universities ($21m) and CAE's ($37m) and

increased expenditures on government schools

in the States ($23m) due mainly to higher

nominal levels of grants in 1983-84 than in

1982-83.

. Increased payments under Students Assistance 48

schemes due mainly to higher student numbers and

higher average benefits in the Tertiary Education

Assistance Scheme ($31m), Secondary Allowances

Scheme ($9m) and Aboriginal Students Assistance

Schemes ($7m).

. Reduced payments for grants to independent -61

schools in the States resulting from January

1984 payments being delayed a few days into

Feburary.

HEALTH Up $371m

. Increased payments for Medical Benefits due to 182

fee increases, growth in utilization, an increase

in the number of health cardholders and a $80m

advance made in January to the Health Insurance

Commission to enable it to pay Medicare benefits *

from 1 February 1984.

ATTACHMENT A

3.

Variation

$m

. Increased expenditures on Nursing Home Benefits 70

reflecting benefit rate increases and increased

beneficiary numbers.

. Increased costs of pharmaceutical benefits for 26

pensioners due to increases in drug prices and

the number of beneficiaries and dependants.

. Increased costs for the treatment of 22

ex-servicemen and women largely resulting

from increased hospital charges and a net

increase in demand for services for patients in

non-departmental institutions and from the

increased wage and salary costs of the

Department of Veterans' Affairs.

. Reduced payments to the Hospital Benefits -47

Reinsurance Trust Fund.

SOCIAL SECURITY AND WELFARE Up $1572m

. Increased payments in pensions and benefits 777

in line with CPI increases, increased

recipient numbers and 1983-84 Budget policy

changes which came into effect in November.

Payments involved were for aged pensions ($293m),

service pensions ($149m) (especially due to

growth in numbers), invalid pensions ($110m),

supporting parents benefits ($95m), war pensions

and allowances ($51m), widows pensions ($44m)

(especially due to growth in recipients) and

sickness benefits ($35m).

ATTACHMENT A

4.

Variation

$m

. Increased unemployment benefits reflecting 538

substantially increased beneficiary numbers,

increased average rates of benefits due to ]

compositional changes and 1983-84 policy

changes which took effect in November 1983.

. Increased expenditure for the Department of 65

Social Security which reflects higher staffing

levels to cope with increased pension and

benefits workloads and the introduction of

the Department's new computer facility.

HOUSING

. Increased grants to the States for public housing.

. Increased payments under the Loan Council Borrowing

program nominated for welfare housing by the

States (offset by a reduction in "Payments to or

for the States").

. Payments under the First Home Owners Scheme which

was not in operation until 1 October 1983.

. Reduced capital advances to the Defence Service

Homes Corporation due to lower demand for loans

and increased receipts.

CULTURE AND RECREATION Up $77m

. Increased payments to the ABC ($39m) and SBS ($6m). 45

Up $112m

59

53

30

-41

ATTACHMENT A

5.

Variation

$m

TRANSPORT AND COMMUNICATIONS Up $9m

. Payments under the Australian Bicentennial Roads 113

Development Program which was not in existence in

the first six months of 1982-83.

. Increased road grants to the States and NT. 26

. One-off special grants in 1982-83 to various -75

States for the upgrading of transport systems.

. A reduction in expenditures on Airport Building -32

and Works reflecting the completion of several

major airport projects in 1982-83 and the lead

times of other major projects which have not yet

reached an advanced stage of construction.

. One-off capital injection to the Australian -25

National Airlines Commission in 1982-83.

INDUSTRY ASSISTANCE AND DEVELOPMENT

. Increased payments under the drought relief

interest subsidy scheme due to a marked upturn

in claims submitted in 1983-84 and slow

submission of claims in the early months of the

operation of the scheme in 1982-83.

. A one-off capital instalment provided to the

Australian Industry Development Corporation in the

first seven months of 1983-84.

Down $65m

16

13

ATTACHMENT A

6.

Variation

$m

. Reduced outlays under the Export Expansion Grants -33 _ _.·· Scheme due principally to the former Government's

decision to halve the grant rate applicable to

1982-83 grant year claims. ,

. The unbudgeted repayment by Queensland of the $37m -74

IMF sugar Buffer Stock Financing Facility drawing

which was on-lent in 1982-83.

. Reduced outlays due to the termination of the -18

Wheat Board's Interest Subsidy.

LABOUR AND EMPLOYMENT

. Expenditures of $54m and $44m under the

Wage Pause Program and new Community Employment

Program (CEP).

. Increased expenditure under the youth and special

training programs.

. Increased administrative expenditures for the

Department of Employment and Industrial Relations

resulting from additional staff and increased

activity levels and the accelerated implementation

of Job Bank.

ADMINISTRATIVE SERVICES

. Increased superannuation payments due mainly to

indexation of payments, an increased number of

pensioners and an additional payday during the

first seven months of 1983-84 compared with

Up $191m

98

48

27

Up $92m

48

1982-83.

ATTACHMENT A

Variation

$m

. Increased costs for Taxation administration 29

reflecting activity and staffing increases

including expenditure associated with the

introduction of the Prescribed Payments System.

. Increased rental for civil departments ($19m) and 28

associated increased payments for the fitting out

of leased premises ($9m).

7. '

PAYMENTS TO OR FOR THE STATES

. Increased tax sharing grants to the States,

Northern Territory and Local Government.

. Increased payments in lieu of health grants.

. Increased natural disaster relief payments.

Up $732m

512

53

68

PUBLIC DEBT INTEREST Up $430m

. Increased Gross Interest paid on Commonwealth 424

Securities.

The rate of growth in expenditure on Public

Debt Interest in the seven months to

end-January (23.5 per cent) is in line with

that projected for this item in the budget

estimates (22.4 per cent). However, this rate

of expenditure can be expected to increase as

the interest payments on the large volume of

debt issued in the first half of 1983-84

becomes payable in the coming months.

-f t S '

MINISTER FOR FINANCE

COMMONWEALTH GOVERNMENT STATEMENT Of FINANCIAL TRANSACTIONS 1983-84 $ million

BUDGET

MONTH o r 7 MONTHS TO 7 MONTHS TO

f.

1983-84.

fANUARY 1984 31.1.84 31.1.83

OUTLAYS

D e fe nc e i . 5 ,2 79 .9 318.2 2,957.3 2,493.1

E d u c a t i o n , 4,' 210.5 146.7 2,542.2 2,445.6

H e a 1th 4 ,2 9 5 .3 399.1 2,285.0 1,914.3 ,

S o c i a l S e c u r i t y and W e l f a r e 1 6 ,84 3 .0 1,222.9 9,320.3 7,748.0

Hous i ng 911.5 130.2 554.1 442.5

Urban and R e g io n a l De v e lo p m e n t ( n e c ) and t h e

E n v i r o n m e n t . 148.3 9.1 53.9 48.2

C u l t u r e and R e c r e a t i o n 599.2 46.4 374.5 297.6

Economic S e r v i c e s -

Tran s p o r t ' a n d Co m m u n ic a t io n 1 ,7 0 5 .4 : - 116.6 847.5 838.4

Water Supply, E l e c t r i c i t y and Gas 89.2 . 5.3 51.9 55.7

Indus try Assistance and Development 1 ,1 03 .6 60.2 454.6 519.9

La b ou r and Employment . 1 ,1 2 4 .0 90.1 471.3 280.6

O t h e r Economic S e r v i c e s . 99.0 &.0 59.9 75.1

G e n e r a l P u b l i c S e r v i c e s -

L e g i s l a t i v e S e r v i c e s 223.3 14.2 114.9 102.5 Law, O r d e r and P u b l i c S a f e t y · 376.4 34.6 205.1 179.2 F o r e i g n A f f a i r s and O v e rs e a s A id 1,0 85 .5 149.4 603.6 553.3 G e n er a l and S c i e n t i f i c R e s e a r c h ' ( nec) 438.5 14.6 264.1 257.5 A d m i n i s t r a t i v e S e r v i c e s 1 ,6 71 .6 135.1 912.1 820.5 Not A l l o c a t e d t o F u n c t i o n - .Payments t o o r f o r t h e S t a t e s , t h e N o r t h e r n T e r r i t o r y ' ‘I .and Lo cal Government A u t h o r i t i e s ( n e c ) 12,202.7 1,009.9 7,233.4 6,501.1 P u b l i c Debt I n t e r e s t 4,"133.3 224.4 2,260.5 1,830.4 A l l o w a n c e f o r P r o s p e c t i v e Wage and S a l a r y I n c r e a s e s 163.0 U n a l l o c a t e d A d m i n i s t r a t i v e S a v i n g s T o t a 1 O u t l a y s 5 6 ,70 3 .2 4,135.0 31,566.2 27.403.7RECEIPTST a x a t i o n Revenue - .Cu stonis Duty - ' ·I m p o r t s . 2 ,1 2 3 .0 204.3 1,313.5 1,208.5Coal E x p o r t s 58.0 6.8 43.1 40.2 E x c i s e Duty 7 ,8 4 6 .0 799.8 4,555.8 3,937.1S a l e s Tax . 3 ,9 7 9 .0 491.5 2,412.1 1,994.0 Income T a x . - i n d i v i d u a l s - Gross PAYE . 2 2 ,5 3 7 .0 2,115.9 12,522.6 12,620.8 - Re funds 2 .4 7 5 .0 DR 1 0 4 . 2 DR 7 . 0 Λ 9 . 1 DR 1 71 1 . 5 M ' - N e t PAYE 2 0 ,0 6 2 .0 2,011.9 10,433.6 10,909.6 - O t h e r 4 ,7 1 1 .0 70.6 474.1 337.8 - .Compart i es 4 ,3 7 5 .0 42.9 1,916.0 1,999.7 - W i t h h o l d i n g Tax - D i v i d e n d s 154.0 25.8 80.4 82.2 - - I n t e r e s t 142.0 15.7 97.2 65.9 P a y r o l l Tax 22.0 2.2 13.6 12.9 D e p a r t u r e Tax 41.3 · 5.4 23.4 ■v 23.5 E s t a t e Duty 4.0- 1.3 1.2 G i f t D u t y ' — ' . 0.1 1.7 Stamp Duty 22.0 2.0 13.8 7.7 O t h e r Taxes, Fees and F in e s 641.8 49.4 293.2 121.4 Remiss i ons 0 . 4 DR ( 1. 7 DU 1 1 n o T o t a l T a x a t i o n Re v e n u e 4 4 ,1 8 0 .7 . 3,728.2 21,672.4 20,740.6I n t e r e s t , Rent and D i v i d e n d s . 3 ,3 4 7 .0 17813 1,499.2 1,356.2 Net R e c e i p t s from G overnm ent E n t e r p r i s e T r a n s a c t i o n s 701.0 2.8 DR 250.8 247.6 S a le o f E x i s t i n g A s s e t s 113-0 5.3 38.5 1 8 . 0T o t a l R e c e i p t s 4 8 ,3 4 1 .7 3,909.1 23,461.0 22,362.5DEFICIT 8 ,3 6 1 .5 226.1 8,105.3 5,041.2FINANCING TRANSACTIONS ■ · . : .. . • . .Net o v e r s e a s b o r r o w i n g s , ) ' ■ .■ ' 10.5 DR 429.2 781.1 Net p ro c e e d s o f A u s t r a l i a n S a v in g s Bonds and ) " . ■ ' S p e c i a l Bonds ) ' ■ ' 194.8 2,728.7 2,120.9 Net change in T r e a s u r y Not es on I s s u e ) ' ■ " ■ ■ ' ' 41.0 DR 1,118.2 1^832.9 Net p r o ce e d s o f o t h e r lo a n s r a i s e d in A u s t r a l i a ) 8 ,3 6 1 .5 1,110.3 6617.2 2j641.4 B o r r o w i n g s from Res erv e Bank ) 1,400.0 DR Use o f cash b a la n c e s ) 978.4 DR 2,629.1 DR 1,136.9 DR O t h e r f i n a n c i n g t r a n s a c t i o n s in A u s t r a l i a ) 49.0 DR 158.9 DR '202.0T o t a l F i n a n c i n g T r a n s a c t i o n s . 8 ,3 6 1 .5 226.1 8,105.3 5,041.2UNFUNDED DEBT AND BANK BALANCES AT 31 .ΤΑΜΠΑΡΥ 1 Q8A$ mi 11 io nT r e a s i r r y B i l l s Nil : · T r e a s u r y N o t e s 4,754Bank B a l a n c e s 3,231.4C a s t l e s PETER WALSHS e c r e t a r y t o t h e D e p a r t m e n t o f F i n a n c e Acting Minister for Finance.16 February 1984 _