Insights into Government Finance Statistics, June 2022 – Australian Bureau of Statistics

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Government fiscal support in June quarter 2022 targeted the rising cost of living and inflationary pressures faced by households and businesses. Funding for healthcare and assistance for those affected by floods in Queensland and New South Wales also continued.
Annual Consumer Price Inflation (CPI) increased to 6.1 per cent in the June quarter, due to higher dwelling construction costs and automotive fuel prices (a). The average wholesale electricity price for all regions reached a record-high (b), and weather impacts and transport costs drove food prices higher. In response, the Commonwealth government halved the fuel excise from 44.2 cents to 22.1 cents per litre and implemented a $250 Cost of Living Payment to eligible income support recipients.
The record-high wholesale electricity prices increased revenues for Public Non-Financial Corporation (PNFC) electricity generators, however higher input costs for coal and gas increased PNFC expenses.
The Reserve Bank of Australia raised the cash rate target by a total of 75 basis points in the quarter to 0.85%. Interest revenues and expenses of all levels of government increased. Cost of living pressures and higher interest rates impacted the property market. Stamp duty on conveyances revenue fell in most jurisdictions, as the estimated number of sale settlements and capital city dwellings values declined (c).
Healthcare spending for hospitalisations, testing, vaccinations, and distribution of rapid antigen tests (RATs) continued, albeit at a lower level than March quarter 2022. Other COVID-19 response spending such as business support programs decreased. 
While severe flooding events in Queensland and New South Wales continued in the June quarter, flooding was not as widespread as the March quarter. Consequently, government disaster recovery payments and other support from the Commonwealth decreased.
Taxation revenue rose in most jurisdictions due to strong company profits in the resources sector, low unemployment, and reduced impacts from COVID-19 restrictions and weather events. The main contributors to the rise were:
Net operating balance rose for all levels of general government. This is the third consecutive quarterly increase.  
In June quarter 2022 total net operating balance:
The main contributors were:
Total revenue received by general government increased 14.2% from March quarter 2022 to $233.3 billion due to a rise in taxation revenue, and a rise in royalty income from higher commodity prices
Total revenue rose 12.6% from June quarter 2021 as improved economic conditions increased company income tax, personal income tax, and royalty income. Higher interest revenue was due to higher interest rates since April 2022
State and local general government net operating balance rose $2.6 billion from March quarter 2022 to $1.6 billion. 
Queensland (up $2.7 billion) saw the largest increase
All jurisdictions rose except Victoria (down $2.1 billion)
All states recorded a positive net operating balance except Victoria (-$4.1 billion) and New South Wales (-$0.3 billion)
Through the year, net operating balance decreased $3.6 billion from June quarter 2021:
Net operating balance rose for all levels of public non-financial corporations (PNFCs). This is the first time since March quarter 2015 that this series has recorded a positive balance. The main contributors were:
Capital transfers received from general government to support social housing projects (up $0.7 billion)
9.3% increase in sales of goods and services revenue from record-high wholesale electricity prices (up $2.0 billion)
12.1% increase in subsidy revenue (up $0.4 billion) from general government
The 15.0% increase in other operating expenses (up $2.2 billion) was driven by higher electricity production input costs for coal and gas.  
In June quarter 2022 total net operating balance:
Total taxation revenue increased 14.5% (up $24.4 billion) from March quarter 2022.
Commonwealth taxation revenue increased 17.2% (up $23.3 billion) to $158.7 billion. The rise in taxation revenue in June quarter 2022 followed a fall in March quarter 2022, which was the usual seasonal pattern. The main contributors were:
The 41.8% fall in excise on petroleum products (down $2.1 billion) reflected the Commonwealth government’s reduction of the fuel excise from 44.2 cents to 22.1 cents per litre from 30 March 2022. The reduction in fuel excise is expected to continue until 28 September 2022.
State and local taxation revenue increased 3.3% (up $1.1 billion) to $34.2 billion, following a slight decrease in March quarter 2022. The main contributors were a 9.1% rise in payroll tax (up $0.6 billion) due to an increase in people employed, a 14.2% rise in motor vehicle taxes (up $0.4 billion), and a 5.3% rise in taxes on gambling (up $0.1 billion).
The main contributors to the rise in motor vehicle taxes were:
The main contributors to taxes on gambling were:
Stamp duty on conveyances decreased 2.7% (down $0.2 billion) across most jurisdictions. Victoria, Queensland, and New South Wales recorded the largest declines.
Total public investment in new assets (e) rose 14.6% through the year (up $4.6 billion) to $36.4 billion. Investment across most levels of government increased.
The ABS continues to undertake extensive consultation with stakeholders and subject matter experts to determine the appropriate classification for new government policies. These classifications are based on well-established conceptual frameworks (f), which ensure consistent recording of these policies across macroeconomic statistics, particularly in relation to Government Finance Statistics (GFS) and the National Accounts (NA).
These policies are grouped into five broad categories (g):
The following presents a summary of the ABS classification of major new government policies that began during June quarter 2022 (h).
Commonwealth and state: (j) Co-funding for the new Private Hospital staff support agreement
GFS: Current grants, Use of goods and services
NA: Income accounts – Current transfers, GDP (E) – Government final consumption expenditure
Commonwealth: National Immunisation Program for all children 6 months to less than 5 years, adults 65 years and older and other at-risk groups
State: Free Influenza A vaccine jabs at general practitioners and pharmacies for residents aged 5 to 64 years of age
GFS: Social benefits to households in goods and services
Donated assets for foreign aid purposes
GFS:  Assets donated (defence equipment systems)
Provision of assistance to households
Commonwealth:  Australian Government Disaster Recovery Payment and the Disaster Recovery Allowance
GFS: Current monetary transfers to households
GFS: Capital transfer expenses nec
Commonwealth and state: Disaster Recovery Flooding Assistance – payments for reconnecting utilities, replacing essential household contents and temporary accommodation
GFS: Current grants, Current transfer expenses nec
Provision of assistance to corporations, unincorporated enterprises, and non-profit institutions
Co-funding business cash support
GFS: Current grants, Other subsidies on production
GFS: Other subsidies on production
GFS: Subsidies on products
GFS: Other taxes on production
Capital injections, establishment of new, or extended, lending facilities and provision of guarantees
GFS: Contingent liabilities
 
These frameworks are supported by international standards such as the International Monetary Fund (IMF) Government Finance Statistics Manual 2014 (GFSM 2014) and the System of National Accounts 2008 (2008 SNA)
The categories are broadly based on the recommendations in “COVID-19: How to Record Government Policy Interventions in Fiscal Statistics” (IMF, 2020)
This table summarises key policies with an impact on the macroeconomic accounts and does not cover every specific government policy in Australia
NA includes the gross domestic product (GDP) accounts, which are measured using the expenditure approach (GDP (E)), the income approach (GDP (I)) or the production approach (GDP (P)).  NA also includes income accounts, capital accounts, financial accounts, and balance sheets
‘States’ refers to the state sector in macroeconomic statistics which covers all eight state and territory jurisdictions in Australia
Insights into Government Finance Statistics (March 2022)
Insights into Government Finance Statistics (December 2021)
Insights into Government Finance Statistics (September 2021)
Government Finance Statistics, Australia – Analysis (June 2021)
Government Finance Statistics, Australia – Analysis (March 2021)
Government Finance Statistics, Australia – Analysis (December 2020)
Government Finance Statistics, Australia – Analysis (September 2020)
Insights into Government Finance Statistics (2020-21)
Public sector debt analysis (2019-20)
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