Apparently Wayne Swan thinks that increasing corporate taxation (via a more frequent transfer of money to the ATO) is compatible with his stated goal of reducing corporate tax. How else can one describe a measure which increases tax receipts by an estimated $8.3 billion over three years?
And where are these so-called savings measures (ie: cutting spending) – see below?
Anyhow, the reconciliation table always shows an interesting story, recall that the policy decisions are those within the control of the Government, while the parameter variations are those affected by exogenous events.
The policy decisions taken since the May budget (in underlying cash):
- increase taxes and other revenue by $1.821 billion in 2012-13, partly offset by
- increase spending by $0.410 billion in 2012-13
benefiting the underlying cash balance by $1.411 billion in 2012-13.
The parameter variations (again, underlying cash)
- reduce taxes and other revenue by $3.242 billion in 2012-13, partly offset by
- reduce spending by $1.373 billion in 2012-13
worsening the underlying cash balance by $1.869 billion.
What is being hidden?
In the section ‘decisions taken but not yet announced’, we find that there are $1.7 billion of spending decisions and $0.5 billion of revenue decisions taken but not yet announced. Was this part of the reason to rush MYEFO out the door?
Of course the Government has claimed $16.4 billion of savings measures over four years. Yet fully 78.2 per cent of these savings measures are policy decisions to increase taxes and other revenue! As for the rest, any spending reductions are more than offset by new spending decisions.
Underlying cash versus accrual
A comparison of the underlying cash and fiscal appear here, for 2012-13, to show the differences in timing: