Australian Local Government Association

For information about ALGA's analysis of the 2005-06 Federal Budget please contact:

Larissa Karpish
Assistant Director, Ageing, Finance and Economic Policy
Phone: 02 6122 9427   
larissa.karpish@alga.asn.au

Federal Budget priorities

The Australian Government has budgeted for expenses amounting to $206.1 billion in 2005-06. This represents 22.2% of Gross Domestic Product.

This will increase to $236.6 billion in 2008-09.

The Commonwealth estimates total Revenue to be $214.5 billion in 2005-06 (23.1% of GDP) increasing to an estimated $245.3 billion in 2008-09.

Consequently, the underlying cash budget surplus for 2005-06 is $8.9 billion and will increase to $9.3 billion in 2008-09.

Tables 56.1 and 56.2 outline the Commonwealth General Government Budget Aggregates (03-04 to 08-09)¹ and its real growth over the same period.

In 2005-06 major areas of expenditure include:

• $2 billion in new and expanded services over four years focusing on parents and people with disabilities
• $266 million will be provided for child care, including an additional 84,300 Outside School Hours Child Care places to assist working parents
• 4,500 pre-vocational places for people interested in a trades career ($20 million) and a further 7,000 School-Based New Apprenticeships ($26 million)
• $33 billion to Australian schools over 2005-08
• $105 million over 2007-08 and 2008-09 for business to attract skilled workers to fill short-term vacancies through changes to the taxation of foreign source income for temporary residents $45 billion on health and aged care including $208 million to assist carers of senior Australians and increasing the Medicare rebate to 100 per cent of the schedule fee ($2.3 billion over five years)
• $522 million to improve protective security
• $580 million to maintain and enhance Australia's quarantine inspection regime

Chart 20 outlines Commonwealth expenditure by function as a percentage for 2005-06. Table 57 provides an overview of the funding attached to each function for the period 2003-04 to 2007-08.

Chart 20: Commonwealth general government expenditure by function 2005-06

The major source of revenue in 2005-06 will be from individual income tax accounting for 56% of total Commonwealth revenue. This includes the significant income tax cuts ($21.7 billion over four years).

Table 58.1 - 58.6 provides details on estimated Commonwealth revenue for the five-year period 2003-04 to 2008-09.

Chart 21 provides an overview of the Commonwealth's main sources of revenue.

Chart 21: Commonwealth general government revenue