Government Revenue and Expenditure Flashcards
Top 3 Sources of Government Income (2023-24)
- Individuals Income Tax: $325.9b
- Company and Resource Rent Taxes: $133.9b
- Sales Taxes: $91.1b
Top 3 Sources of Government Expenditure (2023-24)
- Social Security and Welfare: 36.6%
- Other Purposes: 19.6%
- Health: 15.6%
Education: 7.1% (if you wanna talk about it)
Direct Taxes
- Source of Government Revenue
Collection of tax directly from individuals or businesses on income or profits.
The taxpayer pays tax straight to the government.
- Income Tax
- Corporate Tax
- Medicare levy
Indirect Taxes
- Source of Government Revenue
A tax levied on the buyers/sellers of goods & services, not directly on income/profits.
The tax is collected by the producer/seller, and then passed on to the government.
- GST
- Excise Taxes (cigarettes, fuel, alcohol)
- Tariffs
Progressive Tax
A form of taxation in which the proportion of tax paid out of total income increases as income rises.
The more a person earns, the higher the percentage of tax that is levied on their income.
(I doubt we’d need to know the exact tax brackets, but you can google it as I can’t include images here)
Regressive Tax
A form of taxation in which the proportion of tax paid out of total income decreases as a person’s income rises.
The % of tax paid is higher for lower-income earners, than high-income earners.
“It hits low-income households harder”
Such as GST (as it is the same for everyone)
Proportional Tax
A form of taxation in which the proportion/percentage of tax paid out of total income is constant among all taxpayers.
For example: The Australian company tax rate is 27.5% if your total sales are less than $50m, or 30% if more than $50m
Government Businesses or the Sale of Government Assets
The sale of a government asset, or the revenue from Government Business Enterprises (such as Australia Post)
This revenue is from government businesses selling goods/services.
This accounts for about 7% of government revenue.
Current Spending (G1)
- Government expenditure
Day-to-day operational spending by the government. (Ongoing costs of running the government)
Have a current benefit
Examples:
- Maintenance, cleaning, repairs, staff
Capital Spending (G2)
- government expenditure
Investment spending by the government into physical assets.
Have a future benefit
Examples:
- Infrastructure, schools, roads, hospitals, submarines
Transfer Payments
One-way payment (not in exchange for anything)
- Aged pension
- Youth Allowance
- JobSeeker
This is a redistribution of government income, therefore not included in GDP
