The job of tonight’s budget is to outline where the Government gets its money and how it spends it.
But some policies don’t appear on either side of that ledger — even though they have a big impact on the bottom line.
In particular, some Government decisions result in revenue not being raised in the first place, most commonly tax exemptions, tax deductions and tax offsets.
Treasury produces a list of these ‘tax expenditures’ every year, along with an estimate of how much revenue was forgone due to each.
In 2017, Treasury identified 289 of them. These are the top 25.
About this data
- Treasury defines a tax expenditure as occurring when “the tax treatment of an activity or class of taxpayer differs from the standard tax treatment that applies to similar taxpayers or types of activity”.
- Under a Howard government edict, Treasury publishes an annual list of tax expenditures as it “helps inform debate on the efficiency and equity of the tax system”.
- Treasury notes that its estimates of ‘revenue foregone’ are not estimates of the revenue increase if the tax expenditure was removed.
- It also emphasises that the estimates should not be added together, as reducing one concession would often affect others as well.
- Oh, and if you do want to find this data in tonight’s budget, try looking in Budget Paper No. 1, Statement 5, Appendix A. At least, that’s where it was published last year.
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