In assessing the taxation revenue story of this budget let’s first recap what actually happened in years gone by, excluding GST revenue which Labor has commendably put back into the figures this year. Here are the actual federal tax revenue figures over the past four completed financial years:
2003-04: $175 billion
2004-05: $194 billion (up $19 billion or 10.85%)
2005-06: $206.8 billion (up $12.8 billion or 6.6%)
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2006-07: $221.3 billion (up $14.5 billion or 7%)
Peter Costello’s last budget tipped federal tax revenue of $231.1 billion in 2007-08, a rise of $10 billion or just 2.2%.
After all those election promises and talk of the credit crunch hitting revenue, Treasury is now forecasting 2007-08 revenue of $242 billion, so Wayne Swan’s claims of a credit crunch hitting revenue are pure bunkum, even though he was presenting slides to this effect during his press conference.
Treasury admits the China-driven terms of trade boom have alone lifted company tax receipts by $10.7 billion over the five years to 2008-09. The impact is also substantial with individual tax payments soaring by $48 billion to $126.7 billion over the same period as near full employment and soaring mining industry wages overload the tills in Canberra.
Another way to demonstrate this point about the mining boom being bigger than the credit crunch is to look back at what was predicted about 2008-09 tax revenue in the forward estimates over the last three years:
Previous predictions of 2008-09 tax revenue
2005-06: $230.1 billion
2006-07: $236.7 billion
2007-08: $244.1 billion
2008-09: $252.1 billion
If revenue really has been savaged, how on earth is 2008-09 tax revenue predicted to be $8 billion more in today’s figures than those presented by Treasury and Peter Costello 12 months ago?
Swan admitted the 20% improvement in Australia’s terms of trade over the past year was unprecedented so he should stop trying to downplay the revenue implications. At this level, Peter Costello was right this morning about how easy this budget was to deliver.