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9 .  Â· * Ã¢ÂÂ  '

MINISTER FOR FINANCE

EMBARGO

PRESS  RELEASE

NO: 12/86

STATEMENT OF COMMONWEALTH GOVERNMENT FINANCIAL TRANSACTIONS -

MARCH 1986 "

MINISTER FOR FINANCE,  SENATOR THE HON PETER WALSH

The Commonwealth Government's Statement of Financial Transactions

for March 1986 is now available.  The following table provides a

comparison of the aggregates for the month with the results for the

same period of 1984-85 and the estimates for 1985-86.

Month of March

1986

9 Months to Budgeted Increase

March 1986 for 1985-86 on

1984-85 Outcome

Actual Increase

on March

1985

Actual Increase

on same

period of

1984-85

$m % $m % %

Outlays 5706 6.9 51591 10.1 00

Receipts 4253 1 00 41642 15.6 12.6 Deficit 1452 994 9 2 Â· ’  * DEFICIT / The deficit for the month of March 1986 was $1452m, compared with a  deficit of $287m in February 1986 and a deficit of $775m in  March 1985. Comparison of the.March 1986 deficit, with that for March 1985 is  complicated by the public service industrial action in January and  February of 1985. Though the backlog of postponed revenue had been  cleared by the end of March 1985, assessments for provisional tax  were delayed, partially offsetting the "catch-up" reflected in  receipts for March 1985. In addition, March 1986 receipts for  provisional tax were reduced due to the Easter public holidays  falling on days when the early provisional tax collections were to  commence. If allowance is made for the effect of all these factors,   the March 1986 deficit would only be slightly above that for  March 1985. Based on previous years' patterns as illustrated in the graph below,  the deficit for the first nine months of 1985-86 is expected to be  the peak cumulative deficit for the year. The remaining months of  the year should see a reduction in the cumulative deficit as the  monthly accounts swing into surplus reflecting receipts from 1  Other  Individuals’  and the final instalment of company tax. Pattern of Cumulative Monthly Deficits 1 2 8 4 —8 5 ÃÂÃÂ - 81 - 8 2 O JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN * Budgeted d eficit $ 4 9 1  9m OUTLAYS Outlays in March 1986 were $5706m, some $367m or 6.9% higher than in  March 1986. This moderate month-on-month outcome was the net result   of lower than budgeted expenditures in a number of functions .  including as a result of timing factors: .  lags in the rendition of claims for payment by suppliers primarily in the area of United States Foreign Military Sales   (around $114m); .  the recording of one extra family allowance payment in March   1985 and lower expenditures on age pensions and allowances   (approximately $86m); .  lower expenditure in Industry Assistance, Health, Transport and   Communication and Labour and Employment functions in pro-rata   terms (approximately $140m);  offset in part by .  Commonwealth Tertiary Education Commission two-monthly payments   which were made in March this year compared to February last   year (around $270m). The March result has brought the cumulative rate of growth in  outlays for the first nine months of 1985-86 to 10.1% (down   marginally from 10.5% at end-February). The cumulative rate of  growth is unlikely to decline much further in coming months due to   the overruns in a number of programs identified in previous months. The main programs experiencing significant variations from the   budget estimate on a cumulative basis are shown below. 4 Cumulative  Outlays to Change 1985-86 Budget Increase Mar 1985 Mar 1986 $m $m $m % % Public Debt Interest 4151 5404 1319 31.8 18.9 Tax sharing grants/  financial assistance  and temporary/special  grants - States 6973 7383 591 8.7 8.1 Ã¢ÂÂ¢ Departmental and Defence  Force wages and salaries 4091 4531 440 10.8 11.2 , Medicare medical benefits 1678 1956 278 16.6 11.4 Ã¢ÂÂ¢ Age pensions 4105 4257 153 3.7 5.9 Ã¢ÂÂ¢ Invalid pensions and  allowances 1051 1193 142 13.5 15.4 Ã¢ÂÂ¢ Supporting parents'  benefit 759 886 126 16.7 15.3 Ã¢ÂÂ¢ - Commonwealth Tertiary  Education Commission  programs 1892 2128 236 12.5 8.8 e Schools Commission  programs 1065 1207 141 13.3 9.8 Ã¢ÂÂ¢ Unemployment benefits 2219 2319 100 4.5 0.2 A functional tabulation of the variations on a cumulative basis  together with explanations, is provided at Attachment A. 5 RECEIPTS Total receipts for the first nine months of 1985-86 were $41642m, an   increase of 15.6% over the same period of 1984-85. Taxation   receipts, which are forecast to constitute over nine-tenths of total   receipts in 1985-86, were $38357m, an increase of 14.8% over   1984-85. In comparison, to end-February total receipts were 18.8%   greater than in the corresponding months of 1984-85 and taxation   receipts 18.2% greater. . Comparisons with collections for the first three-quarters of 1984-85   are complicated by the impact of public servants' industrial action   in January and February of 1985. Although the backlog of  collections had been cleared by the end of March 1985, the   industrial action delayed the issue of provisional tax assessments   for 1984-85. As a result, there was a shortfall on forecast   collections from other individuals in March 1985. In 1985-86 this   has been counterbalanced by the Easter public holidays at the end of   March which affected the early provisional tax collections. This   should result in a slightly greater proportion of collections than   usual falling in April. Gross PAYE receipts were 12.1% higher than in the same period of   1984-85. The rate of growth to date is consistent with the 13.0%   forecast for 1985-86. The increase in gross PAYE collections was partly offset by a 20.2%   growth in refunds compared with the corresponding months of   1984-85. As a result, .  net PAYE collections increased by only 11.1%. To date only 1.7.2% of total forecast income tax receipts from   non-PAYE (other) individuals have been collected. Actual   collections were 19.0% above those in the same months of 1984-85.   Most collections under this item are made in April. 6 Collections under the Prescribed Payments System were 23.5% higher  than in the first nine months of 1984-85.  This reflects higher  activity in those industries covered by the system and the growing  number of taxpayers receiving payments that are subject to PPS  deductions. Company tax collections were 18.9% higher than for the period to  end-March 1985. Included in these collections is $17.lm  attributable to the Taxation (Unpaid Company Tax) legislation,  compared with about $49.5m collected to end-March 1985. Receipts from withholding tax continue to run well ahead of those in  the corresponding months of 1984-85. The 25.3% growth in  collections from dividends reflects the increase in company income  in 1984-85, while the 48.3% growth in collections on interest  reflects both the growth in Australia's foreign debt and the impact  of the depreciation of the $A on interest payments denominated in  foreign currencies. Sales tax receipts to end-March 1986 were 17.0% higher than in the  first three-quarters of 1984-85. This reflects increased  expenditure on goods attracting sales tax and the impact of measures  enacted on 30 May 1985 to reduce sales tax avoidance and evasion. Excise duty collections from crude oil and LPG and traditionally  excisable items were 18.9% above those for the first nine months of  1984-85. This reflects a higher import parity price (IPP) to  end-February due to the depreciation of the $A and higher crude oil  production levels. While the rate of growth in collections from  crude oil and LPG excise is expected to decline over subsequent  months following the 1 March and 1 April 1986 IPP reductions, this  will be partially offset by higher growth in traditional excise  receipts due to the increase in excise duty rates on refined  petroleum products. 7 The drop in the net collections of crude oil and LPG excise   in March ($145.lm) compared with February ($439.5m) reflects   the reduction in the IPP and a decline in monthly crude oil   liftings from their previous levels, as well as $83.3m in  refunds on excise previously paid. These refunds are  principally the product of Resource Rent Royalty arrangements   entered into by the Commonwealth covering production from the   Barrow Island oilfield. Receipts from ACT taxes and charges were 18.1% higher than in  the same period of 1984-85. In the nine months to end-March 1986, receipts from customs   duty on imports were 17.7% higher than in the corresponding   months of 1984-85. This reflects higher import volumes and   the depreciation which raised the $A price of imports. Collections under the heading of Other Taxes, Fees and   Fines' increased by 8.6% in the first three-quarters of   1985-86, compared with those in 1984-85. They included   Recoupment Tax collections of $23.7m compared with $52.3m in  1984-85. Finally, receipts under the 1  Interest,  Rent and Dividends'   category were 25.7% above those for the first three-quarters   of 1984-85. This increase remains largely attributable to  the increased payment from the Reserve Bank discussed in the   August CFT press release. CANBERRA  18 April 1986 SUMMARY OF MAJOR OUTLAYS AND MAIN VARIATIONS IN  1984-85 FUNCTION/  DESCRIPTION CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m DEFENCE 4220 4659 .  Defence Force Retirement and Death Benefits 215 253 .  Defence equipment and  stores 1566 1712 .  Defence facilities 184 221 .  Defence Industrial 238 250 Capacity (adjusted for  transfers) . General administration and operational 311 353 ATTACHMENT A OUTLAYS BETWEEN JULY-MARCH 1985-86 AND JULY-MARCH CHANGE 1985-86 COMMENT ON SAME BUDGETED  PERIOD CHANGE  LAST YEAR $m % % 439 10.4 10.0 38 17.5 10.9 .  Reflects higher than expected number of new  pensions,  combined with  the effect of salary  increases awarded by the  Defence Forces  Remuneration . ’ 'Tribunal. 146 9.3 9.4 37 19.8 21.0 - 12 4.8 -1.2 .  Reflects mainly price increases due, to exchange  rate variations. 41 13.3 13.5 FUNCTION/ DESCRIPTION CUMULATIVE OUTLAYS TO MAR MAR 1985 1986 $m $m EDUCATION 3490 3899 . Commonwealth Tertiary  Education Commission - Universities & CAE's  recurrent and equipment - Other - Total .  Schools Commission programs - Government schools 428 496 - Non-Government schools 599 667 - Joint programs 39 44 - Total 1065 1207 . Schools in the ACT - Govt Schools recurrent 123 109 - Other 40 41 164 149 1665 1854 226 274 1892 2128 Total COMMENT CHANGE 1985-86  ON SAME BUDGETED PERIOD CHANGE LAST YEAR $m % % 409 11.7 9.4 .  Mainly reflects the  back payment of salary  increases to academics 189 11.4 10.2 and the variable nature 48 21.2 2.0 of claims-based payments 237 12.5 8.8 in the 'Other'  category. 68 15.9 1.6 .  Delay in payment of  recurrent grants to 68 11.4 7.8 Government schools at 5 11.8 8.0 the beginning of the 141 13.3 9.8 1985 program year. -15 -12.0 4.4 .  Payments to the Act Schools 1 2.5 7.8 authority were irregular in -14 -8.8 5.3 1984-85 compared to  monthly payments this year. FUNCTION/ CUMULATIVE OUTLAYS  DESCRIPTION TO MAR MAR 1985 1986 $m $m . Tertiary Education Assistance Scheme 179 204 . Secondary allowances 37 51 HEALTH 4607 5120 . Medicare medical benefit 1678 1956 advances to the Health  Insurance Commission (HIC) .  Advances to the Health Insurance Commission  - Administration 72 84 CHANGE 1985-86 COMMENT  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % % 25 14.2 15.3 14 38.6 50.0 .  The budget estimates  incorporate the  Government's Youth  Initiatives which did not  come into effect, and  consequently start to  affect expenditure, until  1 January 1986. 513 11.1 9.6 278 16.6 11.4 .  Higher level of Medicare claims than  estimated in the 1985-86  budget. 12 16.5 7.2 .  The cumulative increase  reflects a lag in advances  during the corresponding  period in 1984-85. FUNCTION/ CUMULATIVE OUTLAYS DESCRIPTION TO MAR MAR 1985 1986 $m $m . Medical services and  benefits for veterans and dependants 108 133 . Medicare hospital payments 868 771 .  Pharmaceutical services and benefits 478 555 . Nursing home and domicilary  care - Nursing home benefits 485 519 CHANGE 1985-86 ON SAME BUDGETED PERIOD CHANGE LAST YEAR COMMENT $m % % 26 24.1 17.8 , .  Mainly a catch-up in  payment of treatment  accounts, increased rates  and demand for a number of  medical services. 2 0.3 2.4 .  Revised Medicare grants  only recently approved and  adjustment will be made in  April grants. : 59 12.3 7.5 .  Increase in drug prices,  coupled with stronger than  estimated growth in  prescription volumes.  The  cumulative increase is  somewhat inflated by lags  in payments to chemists in  1984-85. 33 6.9 11.1 .  Reduction of $25.6m from  budget allocation is the  result of lower than  expected abatement cost  and reduced occupancy  ratesÃ¢ÂÂ ÃÂ¯ FUNCTION/  DESCRIPTION  CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m - Nursing home assistance 208 241 - Other 97 83 - Total 790 843 .  Health Services in the ACT 98 112 SOCIAL SECURITY AND WELFARE 13131 13968 . Age pensions and allowances 4105 4257 .  Disability pensions and allowances 628 723 (excluding other  pensions and allowances  for ex-service personnel) COMMENT CHANGE 1985-86  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % % 33 -14 53 15.8 -14.4 6.7 17.3 -14.3 9.7 14 14.3 11.6 .  An additional monthly  payment made this year  together with NWC decision  and price increases due to  exchange rate variations. 837 6.4 7.0 153 3.7 5.9 . Lower take-up rate than  forecast at Budget time. 94 15.0 10.5 .  Higher than expected  rate of determination  of claims and appeals  for disability pensions,  partly offset by a lower  level of arrears payments  for war/defence widows  pensions. ' FUNCTION/ CUMULATIVE OUTLAYS DESCRIPTION TO MAR MAR 1985 1986 $m $m .  Service pensions 1128 1228 . Invalid pensions and 1051 1193  allowances . Widow's pensions 647 670 .  Supporting parents' benefit 759 886 . Family allowances 1190 1167 .  Unemployment benefits 2219 2319 CHANGE 1985-86 COMMENT  ON SAME BUDGETED PERIOD CHANGE  LAST YEAR $m % .  % 100 8.9 7.0 . Higher number of service  pensioners than expected  at Budget time. 142 13.5 15.4 . Lower take-up rate then  expected at Budget time. 23 3.5 4.8 126 16.7 15.3 . The higher than budgeted  rate of increase (which  reflects budgeted rate  increases in November 1984  and increasing numbers of  recipients in 1984-85) is  expected to decline over  the course of 1985-86. -23.4 -2.0 -2.0 100 4.5 0.2 . The number of recipients  has been above projections  to date and average  benefit levels are also  above estimates for the  period. FUNCTION/ DESCRIPTION CUMULATIVE OUTLAYS  TO MAR MAR 1985 '  198 6 $m $m Sickness benefits 269 291 Special benefits 74 80 HOUSING 1059 1105 . State Government  Council Program  nominations for  housing Loan public 339 362 COMMENT CHANGE 1985-86  ON SAME BUDGETED PERIOD CHANGE LAST YEAR $in % % 22 8.2 10.0 6 8.3 4.7 .  The cumulative rate of increase is expected to  decline over the year as  the carer's pension  becomes subsumed by the  spouse carer's pension and  is paid out of applicable  Social Security pensions. 45 4.3 5.2 23 6.8 21.3 .  Several States have only recently commenced  receiving payments under  the component of the Loan  Council program because of  delays in satisfying the  CSHA matching requirements. FUNCTION/ DESCRIPTION  CUMULATIVE OUTLAYS TO MAR MAR 1985 1986 $m $m .  Commonwealth/State 422 511 Housing Agreement  grants to the States  and NT for public  housing .  First Home Owners Scheme 209 181 .  Housing in the ACT 22 3 URBAN AND REGIONAL DEVELOPMENT  (NEC) AND THE ENVIRONMENT 5 39 Land Commissions 32 CR 7 CR CHANGE 1985-86 COMMENT  ON SAME BUDGETED PERIOD CHANGE LAST YEAR $ m  % % 89 21.1 5.0 -28 -13.5 -19 -85.0 -17.8 The higher than budgeted  increase to March 86  reflects an additional  monthly payment compared  to the same period last  year, and to a lesser  extent, lower than average  payments in the first five  months of 1984-85. Lower than expected  approval rates under the  Scheme. Nil drawdown in the loans  for housing component of  this item so far this year  compared to $12.05m in the  same period last year and  conservative  implementation of the  revised loans scheme in  1985-86 . 34 670.0 15.7 25 -78.1 -68.7 FUNCTION/  DESCRIPTION  CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m CULTURE AND RECREATION 557 646 . Australian Broadcasting 277 332 Corporation . Special Broadcasting  Service 34 39 TRANSPORT AND COMMUNICATION 1300 1265 . Telecom - repayment of interest-bearing advances 168 CR 35 CR .  Air transport sites,  buildings and works 75 107 CHANGE 1985-86 COMMENT  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % % 88 15.9 12.2 55 19.8 13.8 . High level of operational expenditure including  redundancy payouts in the  first half of this  financial year,  together  with capital expenditure  payments associated with  the use of the AUSSAT  satellite. 6 16.2 17.7 -35 -2.7 -6.1 133 -79.1 -79.1 33 43.8 29.1 .  Variation in progress of capital works being  undertaken, principally at  Brisbane and Perth  airports. FUNCTION/  DESCRIPTION CUMULATIVE OUTLAYS  TO .  ' MAR MAR 1985 1986 $m $m . Road grants to the States  and the NT - under the Australian 619 530 Land Transport Program Australian Bicentennial  Road Development (ABRD)  program 273 343 CHANGE 1985-86 COMMENT ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m %~ % -89 -14.3 rr CM  1 .  Continuing effect of temporary administrative  delays experienced earlier  in the financial year  associated with the introduction of the  Australian Land Transport  Act 1985 ÃÂÃÂ· 1 July 1985. 71 25.9 5.5 . Continuing effect of "catch-up" expenditure on  a backlog of projects in the early months of  1985-86. FUNCTION/  DESCRIPTION  CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m WATER SUPPLY, ELECTRICITY  AND GAS 65 43 .  Electricity supply in  the NT 60 43 INDUSTRY ASSISTANCE AND  DEVELOPMENT 749 830 .  Assistance to the Wheat  Industry 19 111 .  Export Market Development  Grants 75 75 COMMENT CHANGE 1985-86 ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % % -22 -33.3 -53.0 -17 -28.7 -34.d .  Reflects better than  expected progress with  capital works. 81 10.8 5.3 92 498.4 569.6 Ã¢ÂÂ¢  Â· 0.1 -34.6 . Budget estimate reflects a  one-off large payment made  in June 1985 to reduce a  backlog of claims. FUNCTION/  DESCRIPTION CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m . Petroleum Products Freight Subsidy Scheme 103 19 LABOUR AND EMPLOYMENT 776 712 . Training programs 106 101 (excluding salary and  administrative costs) .  Community Employment Program (excluding  salary and administrative costs) 259 183 .  Employer incentives 111 82 (excluding salary and  administrative costs) CHANGE 1985-86 ON SAME BUDGETED PERIOD CHANGE LAST YEAR COMMENT $m % % -85 -81.8 -84.2 -64 -8.3 -2.7 -5 -4.7 17.0 .  Lower than anticipated  approvals in skills  training programs,  unexpected delays in the  take-up of Australian  Traineeships and slow  take-up rate in adult  training programs. -76 -29.3 -28.9 -29 -26.1 -1.6 .  Lower approvals in the  Jobstart program which  began on 1 December 1985,  December and January being  seasonably low activity  months, combined with the  slow submission of payment  claims. FUNCTION/ CUMULATIVE OUTLAYS DESCRIPTION TO MAR MAR 1985 1986 $m .  $m LEGISLATIVE SERVICES 228 251 .  Parliament House Construction Authority 86 132 FOREIGN AFFAIRS AND OVERSEAS AID 833 864 .  Aid payments to PNG 235 238 .  Other components of bilateral aid 253 227 Multilateral aid 142 136 CHANGE 1985-86 COMMENT ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % % 23 10.0 7.4 45 52.3 39.4 . Better than expected rates of progress with  construction in the first  half of 1985-86. 31 3.7 4.1 3 1.3 1.6 -26 -10.3 -3.1 .  Delays in wheat shipments and lower appropriation in  1985-86 of Emergency  Humanitarian Relief .  funds. Mainly  difficulties in the  administration of food aid  with recipient countries,  especially in Africa,  leading to low expenditure  to date. -6 -4.5 11.5 . Delay in drawdowns by the  World Food Program of  Australian food aid. FUNCTION/  DESCRIPTION CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m GENERAL AND SCIENTIFIC  RESEARCH NEC 373 393 .  Australian Atomic  Energy Commission 30 33 . CSIRO 266 278 ADMINISTRATIVE SERVICES 1451 1632 .  Rent - civil departments 123 166 .  Net superannuation  payments  - Commonwealth  superannuation departmental 369 409 CHANGE 1985-86 COMMENT ON SAME BUDGETED PERIOD CHANGE LAST YEAR $m % % 21 5.6 4.7 3 11.3 6.7 . Salary award increases. 12 4.6 3.6 181 12.5 10.2 43 34.6 39.8 . New leases are not being finalised as early as  anticipated because of  competitive market conditions. 40 10.8 13.2 .  Increases arising from the Carpenter Case are not  being paid until the end  of the financial year. FUNCTION/  DESCRIPTION CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m - Other 101 CR 81 CR - Total 268 328 Taxation Administration 288 358 . Construction Services 144 155 .  Property and Management Services 88 114 .  ACT - General Administration 45 59 CHANGE 1985-86 COMMENT  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % % 20 19.8 -6.3 60 22.4 21.3 70 24.3 12.1 10 7.2 5.6 Lower than expected  receipt of superannuation  contributions from  Approved Authorities so  far this year due to  timing factors. Mainly NWC decision and  increase in interest on  taxation overpayments. Mainly NWC decision and  increases in the cost of  consultant work for  approved work projects. 27 30.5 20.5 . Mainly NWC decision and increases in electricity  tariffs on Commonwealth  owned buildings. 14 31.1 27.8 FUNCTION/ CUMULATIVE OUTLAYS CHANGE 1985-86 COMMENT DESCRIPTION TO ON SAME BUDGETED PERIOD CHANGE MAR MAR LAST YEAR 1985 1986 $m $m $m % % PAYMENTS TO OR FOR THE STATES, NT AND LOCAL GOVERNMENT AUTHORITIES 9464 10268 805 8.5 6.9 .  Tax sharing grants/  financial assistance  and Temporary/Special grants - States 6973 7383 591 00 ft 00 Identified health  grants - States 1030 1110 80 7.8 00 State Government Loan 761 835 74 9.7 -4.6 Council Program  (excluding Housing  nominations and  offsetting Sinking Fund  Receipts Special assistance grants  were paid in full during  June 85, whilst this year  they are being paid on a  weekly basis. Accelerated payments were  made earlier in the year  as several States had not  then satisfied the  requirements for receiving  payments under the Housing  Nomination arrangements.  Also,  State Domestic  Raisings were not brought  to account until the end  of 1984-85. % FUNCTION/  DESCRIPTION CUMULATIVE OUTLAYS  TO MAR MAR 1985 1986 $m $m . General revenue assistance to local government 487 535 . Tax sharing grants,   identified health  grants and debt  charges assistance/ Financial assistance  grants - Northern Territory 412 419 . NT General Capital Assistance (excluding  Housing nominations and Repayments) 103 105 COMMENT CHANGE 1985-86  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $m % 49 10.0 9.9 7 1.7 2.5 . Reflects the pattern of payments for Debt Charges  Assistance in 1984-85  which were paid on an  emerging cost basis. 2 2.0 0.7 . Accelerated payments have been made in the year to  date as the NT has only  recently commenced  receiving payments under  the Housing Nomination  arrangements. FUNCTION/ CUMULATIVE OUTLAYS DESCRIPTION TO MAR MAR 1965 1986  $m $m PUBLIC DEBT INTEREST 4151 5470 OUTLAYS SPREAD ACROSS  FUNCTIONS . Departmental and Defence Force wages . and salaries 4091 4531 . National Capital Development Commission (NCDC) - Construction 154 151 TOTAL OUTLAYS 46879 51591 CHANGE 1985-86 COMMENT ON SAME BUDGETED  PERIOD CHANGE LAST YEAR $ m  % % 1319 31.8 18.9 . Reflects, in part, changes in the within-year pattern  of Treasury Note issue;  the cumulative percentage  increase has been  declining since December,   when it peaked at 37.9%,  and will continue to do so  as the year progresses.  Additional factors in. the  increase are that the  average yield on Note  issues to date has been  higher than estimated at  budget-time and the value  of the Australian dollar  against overseas  currencies has generally  Ã¢ÂÂ¢  been lower. 440 10.8 11.2 -3 -1.9 12.8 . Uneven pattern of payments inherent in construction  activity. 4712 10.1 8.4 ! MINISTER FOR FINANCE c o m m o n w e a l t h  g o v e r n m e n t  . STATEMENT ÃÂÃÂÂ·’  FIHANC 1AL TRANSACTIONS 1985-06  S MILLION I I  !  I BUDGET MONTH OF 9 MONTHS TC 9 MONTHS TO  ESTIMATE  '  1985-36 MARCH 1986 31.3.86 31.3.35 OUTLAYS Defence 6,535 683.9 4,658.9 4,220.1 Education 1,914 495.3 3,898.7 3,489.5 Health . 6,701 571.1 5,102.0 4,607.0 Social Security and Welfare 19,077 1,505.8 13,967.9 13,130.6 Housing Urban and Regional Development (nee) and the 1,397 154.7 1,104.7 1,059.4Environment 38 13.9 38.5 5.0 Culture and Recreation Economic Services - 849 71.6 645.5 557.1Transport and Communication 1,785 116.5 1,265.2 1,299.1 Water Supply, Electricity and Gas 55 3.2 43.2 64.8 Industry Assistance and Development 1,256 64.1 830.0 748.9 Labour and Employment .  1,102 83.5 712.2 776.4 Other Economic Services General Public Services - 144 16.8 121.1 111.5Legislative Services 325 33.1 250.6 227.9 Law,  Order and Public Safety 454 40.8 325.4 310.9 Foreign Affairs and Overseas Aid 1,332 47.9 863.7 832.6 General and Scientific Research (nec) 4 80 43.3 393.4 372.6 Administrative Services Not allocated to Function - ' 2,176 156.5 1,631.71,450.7Payments to or for the States, the Northern Territoryand Local Government Authorities (ncc) 13,531 956.3 10,268.4 9,463.8 Public Debt InterestAllowances for Prospective Wage and Salary increases 6,724 647.3 5,469.6 4,150.6(non-Dcfence)  Ã¢ÂÂ  162 - - -Total Outlays 69,067 5705.6 51590.5 46,878.5RECEIPTS .Income Tax - Individuals - Gross PAYE 28,850 2280.3 21,055.1 18,789.4 - Kc 1  unth; 2.380DR 67.0DR 2.309.1DI t 1.921.6DI- Net PAYE 26.470 2213.3 18,746.0 16,867.8 - Other 5,760 437.8 990.6 832.5- Prescribed Payments 460 '  36.2 376.0 304.4 - Companies 6,440 237.3 3,375.1 2,837.6 - Withholding Tax - Dividends/Mining 180 11.2 144.1 115.0 .  - Interest 300 25.5 256.0 172.6Sales Tax 6,000 340.8 4,171.9 3,567.1 Excise Duty - Crude Oil and LVG 4,368 145.1 3,705.1 )  6,055.1 '  - Other 4,609 369.9 3,493.1 ) Customs Duty - Imports 3,209 234.4 2,532.2 2,152.0 - Coal Exports 70 4.9 43.9 44.0 Bank Accounts Debits Tax' 200 16.0 Ã¢ÂÂ 149.5 139.8 ACT Taxes and Charges 145 9.2 120.2 101.8 Other Taxes,  Fees and Fines 416 70.6 253.6 233.6Remissions - 0.2D 0.2D tTotal Taxation Revenue 58,627 4152.1 38,357.0 33,423.1Interest, Rent and Dividends 5,519 101.9 3,282.6 2,610.5Net Receipts from Government 2 . 9DR 2.0 2.,7 Enterprise TransactionsTotal Receipts . 64,149 4253.2 41,641.7 '  36,036.2DEFICIT 4,919 1452.4_____________ _9948.9 10,842.3\. continued over BUDGET ESTIMATE MONTH OF  MARCH 19 8 i 9 MONTHS TO  31.3.86 I  9 MONTHS TO  31.3.85 FINANCING TRANSACTIONS Domestic Financing Â· Treasury Bonds - Official r -  Non-Official - Less Discounts 92.2DR  356.6  .  12.3DR 467.9DR  2,510.7  166.SDR 1,860.7  4,374.3  211.3DR Sub-total ) 252.1 1,876.3 6,023.7 Treasury Indexed Bonds - Official .- Non-Official - Less Discounts - 255.9 32.1DR - Sub-total ) - 223.8 - ' Treasury Notes - Official - Non-Official 407.2 31.9 2,777.6 .  '   4,282.0 1,590.7 2,545.3 Sub-total ) 4,919 439.1 7,059.6 4,136.0 Australian Savings Bonds ) 150.9DR 1,858.0DR 230.1DR Other Borrowings from Reserve Bank ) - Ã¢ÂÂ  r Ã¢ÂÂ   Â· . Use of Cash Balances ) 510-9 1,138.8, 2-92.4 Other Loans and Financing Transactions ) 94.0 272.4 . .  ,  ,1.2DR Total Domestic Financing 1,145.0 8,712.9 10,220.8 .  j Overseas Financing 307.1 1,235.9 .  , 621.'5. -V '. Total Financing Transactions 4,919 1,452.4 9.948.9 10.842.3 OUTSTANDING SHORT TERM DEPT AND CASH BALANCES $ MILLION Other Borrowings from Reserve Bank  Treasury Notes Cash Balances with Reserve Bank - Net Public Account - Net Other Accounts . NIL 9954.3 125.1 CR  .  665.8 M S KEATING  Secretary to the Department of Finance  18 April 1986 PETER WALSH  Minister for Finance

00

41642 15.6 12.6

Deficit 1452 994 9

2 Â· ’  *

DEFICIT

/

The deficit for the month of March 1986 was $1452m, compared with a

deficit of $287m in February 1986 and a deficit of $775m in

March 1985.

Comparison of the.March 1986 deficit, with that for March 1985 is

complicated by the public service industrial action in January and

February of 1985. Though the backlog of postponed revenue had been

cleared by the end of March 1985, assessments for provisional tax

were delayed, partially offsetting the "catch-up" reflected in

receipts for March 1985. In addition, March 1986 receipts for

provisional tax were reduced due to the Easter public holidays

falling on days when the early provisional tax collections were to

commence. If allowance is made for the effect of all these factors,

the March 1986 deficit would only be slightly above that for

March 1985.

Based on previous years' patterns as illustrated in the graph below,

the deficit for the first nine months of 1985-86 is expected to be

the peak cumulative deficit for the year. The remaining months of

the year should see a reduction in the cumulative deficit as the

monthly accounts swing into surplus reflecting receipts from 1  Other

Individuals’  and the final instalment of company tax.

Pattern of Cumulative Monthly Deficits 1 2

8 4 —8 5

ÃÂÃÂ -

81 - 8 2

O JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

* Budgeted d eficit $ 4 9 1  9m

OUTLAYS

Outlays in March 1986 were $5706m, some $367m or 6.9% higher than in

March 1986. This moderate month-on-month outcome was the net result

of lower than budgeted expenditures in a number of functions .

including as a result of timing factors:

.  lags in the rendition of claims for payment by suppliers

primarily in the area of United States Foreign Military Sales

(around $114m);

.  the recording of one extra family allowance payment in March

1985 and lower expenditures on age pensions and allowances

(approximately $86m);

.  lower expenditure in Industry Assistance, Health, Transport and

Communication and Labour and Employment functions in pro-rata

terms (approximately $140m);  offset in part by

.  Commonwealth Tertiary Education Commission two-monthly payments

which were made in March this year compared to February last

year (around $270m).

The March result has brought the cumulative rate of growth in

outlays for the first nine months of 1985-86 to 10.1% (down

marginally from 10.5% at end-February). The cumulative rate of

growth is unlikely to decline much further in coming months due to

the overruns in a number of programs identified in previous months.

The main programs experiencing significant variations from the

budget estimate on a cumulative basis are shown below.

4

Cumulative  Outlays to Change 1985-86

Budget Increase

Mar 1985

Mar 1986

$m $m $m % %

Public Debt Interest 4151 5404 1319 31.8 18.9

Tax sharing grants/  financial assistance  and temporary/special  grants - States 6973 7383 591 8.7 8.1

Ã¢ÂÂ¢ Departmental and Defence  Force wages and salaries 4091 4531 440 10.8 11.2

, Medicare medical benefits 1678 1956 278 16.6 11.4

Ã¢ÂÂ¢ Age pensions 4105 4257 153 3.7 5.9

Ã¢ÂÂ¢ Invalid pensions and  allowances 1051 1193 142 13.5 15.4

Ã¢ÂÂ¢ Supporting parents'  benefit 759 886 126 16.7 15.3

Ã¢ÂÂ¢ - Commonwealth Tertiary  Education Commission  programs 1892 2128 236 12.5 8.8

e Schools Commission  programs 1065 1207 141 13.3 9.8

Ã¢ÂÂ¢ Unemployment benefits 2219 2319 100 4.5 0.2

A functional tabulation of the variations on a cumulative basis

together with explanations, is provided at Attachment A.

5

RECEIPTS

Total receipts for the first nine months of 1985-86 were $41642m, an

increase of 15.6% over the same period of 1984-85. Taxation

receipts, which are forecast to constitute over nine-tenths of total

receipts in 1985-86, were $38357m, an increase of 14.8% over

1984-85. In comparison, to end-February total receipts were 18.8%

greater than in the corresponding months of 1984-85 and taxation

receipts 18.2% greater. .

Comparisons with collections for the first three-quarters of 1984-85

are complicated by the impact of public servants' industrial action

in January and February of 1985. Although the backlog of

collections had been cleared by the end of March 1985, the

industrial action delayed the issue of provisional tax assessments

for 1984-85. As a result, there was a shortfall on forecast

collections from other individuals in March 1985. In 1985-86 this

has been counterbalanced by the Easter public holidays at the end of

March which affected the early provisional tax collections. This

should result in a slightly greater proportion of collections than

usual falling in April.

Gross PAYE receipts were 12.1% higher than in the same period of

1984-85. The rate of growth to date is consistent with the 13.0%

forecast for 1985-86.

The increase in gross PAYE collections was partly offset by a 20.2%

growth in refunds compared with the corresponding months of

1984-85. As a result, .  net PAYE collections increased by only 11.1%.

To date only 1.7.2% of total forecast income tax receipts from

non-PAYE (other) individuals have been collected. Actual

collections were 19.0% above those in the same months of 1984-85.

Most collections under this item are made in April.

6

Collections under the Prescribed Payments System were 23.5% higher

than in the first nine months of 1984-85.  This reflects higher

activity in those industries covered by the system and the growing

number of taxpayers receiving payments that are subject to PPS

deductions.

Company tax collections were 18.9% higher than for the period to

end-March 1985. Included in these collections is $17.lm

attributable to the Taxation (Unpaid Company Tax) legislation,

compared with about $49.5m collected to end-March 1985.

Receipts from withholding tax continue to run well ahead of those in

the corresponding months of 1984-85. The 25.3% growth in

collections from dividends reflects the increase in company income

in 1984-85, while the 48.3% growth in collections on interest

reflects both the growth in Australia's foreign debt and the impact

of the depreciation of the $A on interest payments denominated in

foreign currencies.

Sales tax receipts to end-March 1986 were 17.0% higher than in the

first three-quarters of 1984-85. This reflects increased

expenditure on goods attracting sales tax and the impact of measures

enacted on 30 May 1985 to reduce sales tax avoidance and evasion.

Excise duty collections from crude oil and LPG and traditionally

excisable items were 18.9% above those for the first nine months of

1984-85. This reflects a higher import parity price (IPP) to

end-February due to the depreciation of the $A and higher crude oil

production levels. While the rate of growth in collections from

crude oil and LPG excise is expected to decline over subsequent

months following the 1 March and 1 April 1986 IPP reductions, this

will be partially offset by higher growth in traditional excise

receipts due to the increase in excise duty rates on refined

petroleum products.

7

The drop in the net collections of crude oil and LPG excise

in March ($145.lm) compared with February ($439.5m) reflects

the reduction in the IPP and a decline in monthly crude oil

liftings from their previous levels, as well as $83.3m in

refunds on excise previously paid. These refunds are

principally the product of Resource Rent Royalty arrangements

entered into by the Commonwealth covering production from the

Barrow Island oilfield.

Receipts from ACT taxes and charges were 18.1% higher than in

the same period of 1984-85.

In the nine months to end-March 1986, receipts from customs

duty on imports were 17.7% higher than in the corresponding

months of 1984-85. This reflects higher import volumes and

the depreciation which raised the $A price of imports.

Collections under the heading of Other Taxes, Fees and

Fines' increased by 8.6% in the first three-quarters of

1985-86, compared with those in 1984-85. They included

Recoupment Tax collections of $23.7m compared with $52.3m in

1984-85.

Finally, receipts under the 1  Interest,  Rent and Dividends'

category were 25.7% above those for the first three-quarters

of 1984-85. This increase remains largely attributable to

the increased payment from the Reserve Bank discussed in the

August CFT press release.

CANBERRA  18 April 1986

SUMMARY OF MAJOR OUTLAYS AND MAIN VARIATIONS IN

1984-85

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

DEFENCE 4220 4659

.  Defence Force Retirement and Death Benefits 215 253

.  Defence equipment and  stores 1566 1712

.  Defence facilities 184 221

.  Defence Industrial 238 250

Capacity (adjusted for  transfers)

. General administration and operational 311 353

ATTACHMENT A

OUTLAYS BETWEEN JULY-MARCH 1985-86 AND JULY-MARCH

CHANGE 1985-86 COMMENT

ON SAME BUDGETED

PERIOD CHANGE

LAST YEAR

$m % %

439 10.4 10.0

38 17.5 10.9 .  Reflects higher than

expected number of new  pensions,  combined with  the effect of salary  increases awarded by the

Defence Forces  Remuneration . ’ 'Tribunal.

146 9.3 9.4

37 19.8 21.0 -

12 4.8 -1.2 .  Reflects mainly price

increases due, to exchange  rate variations.

41 13.3 13.5

FUNCTION/ DESCRIPTION

CUMULATIVE OUTLAYS TO

MAR MAR

1985 1986

$m $m

EDUCATION 3490 3899

. Commonwealth Tertiary  Education Commission - Universities & CAE's  recurrent and equipment

- Other - Total

.  Schools Commission programs - Government schools 428 496

- Non-Government schools 599 667

- Joint programs 39 44

- Total 1065 1207

. Schools in the ACT - Govt Schools recurrent 123 109

- Other 40 41

164 149

1665 1854

226 274

1892 2128

Total

COMMENT CHANGE 1985-86  ON SAME BUDGETED PERIOD CHANGE LAST YEAR

$m % %

409 11.7 9.4

.  Mainly reflects the  back payment of salary  increases to academics

189 11.4 10.2 and the variable nature

48 21.2 2.0 of claims-based payments

237 12.5 8.8 in the 'Other'  category.

68 15.9 1.6

.  Delay in payment of

recurrent grants to

68 11.4 7.8 Government schools at

5 11.8 8.0 the beginning of the

141 13.3 9.8 1985 program year.

-15 -12.0 4.4 .  Payments to the Act Schools

1 2.5 7.8 authority were irregular in

-14 -8.8 5.3 1984-85 compared to

monthly payments this year.

FUNCTION/ CUMULATIVE OUTLAYS

DESCRIPTION TO

MAR MAR

1985 1986

$m $m

. Tertiary Education Assistance Scheme 179 204

. Secondary allowances 37 51

HEALTH 4607 5120

. Medicare medical benefit 1678 1956

advances to the Health  Insurance Commission (HIC)

.  Advances to the Health Insurance Commission  - Administration 72 84

CHANGE 1985-86 COMMENT

ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m % %

25 14.2 15.3

14 38.6 50.0 .  The budget estimates

incorporate the  Government's Youth  Initiatives which did not  come into effect, and  consequently start to  affect expenditure, until

1 January 1986.

513 11.1 9.6

278 16.6 11.4 .  Higher level of

Medicare claims than  estimated in the 1985-86  budget.

12 16.5 7.2 .  The cumulative increase

reflects a lag in advances  during the corresponding  period in 1984-85.

FUNCTION/ CUMULATIVE OUTLAYS

DESCRIPTION TO

MAR MAR

1985 1986

$m $m

. Medical services and  benefits for veterans and dependants 108 133

. Medicare hospital payments 868 771

.  Pharmaceutical services and benefits 478 555

. Nursing home and domicilary  care

- Nursing home benefits 485 519

CHANGE 1985-86 ON SAME BUDGETED PERIOD CHANGE LAST YEAR

COMMENT

$m % %

26 24.1 17.8 , .  Mainly a catch-up in

payment of treatment  accounts, increased rates  and demand for a number of  medical services.

2 0.3 2.4 .  Revised Medicare grants

only recently approved and  adjustment will be made in  April grants. :

59 12.3 7.5 .  Increase in drug prices,

coupled with stronger than  estimated growth in  prescription volumes.  The  cumulative increase is  somewhat inflated by lags

in payments to chemists in  1984-85.

33 6.9 11.1 .  Reduction of $25.6m from

budget allocation is the  result of lower than  expected abatement cost  and reduced occupancy  ratesÃ¢ÂÂ ÃÂ¯

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

- Nursing home assistance 208 241

- Other 97 83

- Total 790 843

.  Health Services in the ACT 98 112

SOCIAL SECURITY AND WELFARE 13131 13968

. Age pensions and allowances 4105 4257

.  Disability pensions and allowances 628 723

(excluding other  pensions and allowances  for ex-service personnel)

COMMENT CHANGE 1985-86  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m % %

33

-14 53

15.8 -14.4 6.7

17.3 -14.3 9.7

14 14.3 11.6 .  An additional monthly

payment made this year  together with NWC decision  and price increases due to  exchange rate variations.

837 6.4 7.0

153 3.7 5.9 . Lower take-up rate than

forecast at Budget time.

94 15.0 10.5 .  Higher than expected

rate of determination  of claims and appeals  for disability pensions,  partly offset by a lower  level of arrears payments  for war/defence widows  pensions. '

FUNCTION/ CUMULATIVE OUTLAYS

DESCRIPTION TO

MAR MAR

1985 1986

$m $m

.  Service pensions 1128 1228

. Invalid pensions and 1051 1193

allowances

. Widow's pensions 647 670

.  Supporting parents' benefit 759 886

. Family allowances 1190 1167

.  Unemployment benefits 2219 2319

CHANGE 1985-86 COMMENT

ON SAME BUDGETED PERIOD CHANGE  LAST YEAR

$m % .  %

100 8.9 7.0 . Higher number of service

pensioners than expected  at Budget time.

142 13.5 15.4 . Lower take-up rate then

expected at Budget time.

23 3.5 4.8

126 16.7 15.3 . The higher than budgeted

rate of increase (which  reflects budgeted rate  increases in November 1984  and increasing numbers of  recipients in 1984-85) is  expected to decline over

the course of 1985-86.

-23.4 -2.0 -2.0

100 4.5 0.2 . The number of recipients

has been above projections  to date and average  benefit levels are also  above estimates for the  period.

FUNCTION/ DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 '  198 6

$m $m

Sickness benefits 269 291

Special benefits 74 80

HOUSING 1059 1105

. State Government  Council Program  nominations for  housing

Loan

public

339 362

COMMENT CHANGE 1985-86  ON SAME BUDGETED PERIOD CHANGE LAST YEAR

$in % %

22 8.2 10.0

6 8.3 4.7 .  The cumulative rate of

increase is expected to  decline over the year as  the carer's pension  becomes subsumed by the

spouse carer's pension and  is paid out of applicable  Social Security pensions.

45 4.3 5.2

23 6.8 21.3 .  Several States have only

recently commenced  receiving payments under  the component of the Loan  Council program because of  delays in satisfying the  CSHA matching requirements.

FUNCTION/ DESCRIPTION

CUMULATIVE OUTLAYS TO

MAR MAR

1985 1986

$m $m

.  Commonwealth/State 422 511

Housing Agreement  grants to the States  and NT for public  housing

.  First Home Owners Scheme 209 181

.  Housing in the ACT 22 3

URBAN AND REGIONAL DEVELOPMENT  (NEC) AND THE ENVIRONMENT 5 39

Land Commissions 32 CR 7 CR

CHANGE 1985-86 COMMENT

ON SAME BUDGETED PERIOD CHANGE LAST YEAR

$ m  % %

89 21.1 5.0

-28 -13.5

-19 -85.0 -17.8

The higher than budgeted  increase to March 86  reflects an additional  monthly payment compared  to the same period last

year, and to a lesser  extent, lower than average  payments in the first five  months of 1984-85.

Lower than expected  approval rates under the  Scheme.

Nil drawdown in the loans  for housing component of  this item so far this year  compared to $12.05m in the

same period last year and  conservative  implementation of the  revised loans scheme in

1985-86 .

34 670.0 15.7

25 -78.1 -68.7

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

CULTURE AND RECREATION 557 646

. Australian Broadcasting 277 332

Corporation

. Special Broadcasting  Service 34 39

TRANSPORT AND COMMUNICATION 1300 1265

. Telecom - repayment of interest-bearing advances 168 CR 35 CR

.  Air transport sites,  buildings and works 75 107

CHANGE 1985-86 COMMENT

ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m % %

88 15.9 12.2

55 19.8 13.8 . High level of operational

expenditure including  redundancy payouts in the  first half of this  financial year,  together  with capital expenditure  payments associated with

the use of the AUSSAT  satellite.

6 16.2 17.7

-35 -2.7 -6.1

133 -79.1 -79.1

33 43.8 29.1 .  Variation in progress of

capital works being  undertaken, principally at  Brisbane and Perth  airports.

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO .  '

MAR MAR

1985 1986

$m $m

. Road grants to the States  and the NT - under the Australian 619 530

Land Transport Program

Australian Bicentennial  Road Development (ABRD)  program 273 343

CHANGE 1985-86 COMMENT

ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m %~ %

-89 -14.3

rr CM  1

.  Continuing effect of temporary administrative  delays experienced earlier  in the financial year  associated with the

introduction of the  Australian Land Transport  Act 1985 ÃÂÃÂ· 1 July 1985.

71 25.9 5.5 . Continuing effect of

"catch-up" expenditure on  a backlog of projects in the early months of  1985-86.

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

WATER SUPPLY, ELECTRICITY  AND GAS 65 43

.  Electricity supply in  the NT 60 43

INDUSTRY ASSISTANCE AND  DEVELOPMENT 749 830

.  Assistance to the Wheat  Industry 19 111

.  Export Market Development  Grants 75 75

COMMENT CHANGE 1985-86 ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m % %

-22 -33.3 -53.0

-17 -28.7 -34.d .  Reflects better than

expected progress with  capital works.

81 10.8 5.3

92 498.4 569.6

Ã¢ÂÂ¢  Â· 0.1 -34.6 . Budget estimate reflects a

one-off large payment made  in June 1985 to reduce a  backlog of claims.

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

. Petroleum Products Freight Subsidy Scheme 103 19

LABOUR AND EMPLOYMENT 776 712

. Training programs 106 101

(excluding salary and  administrative costs)

.  Community Employment Program (excluding  salary and administrative costs)

259 183

.  Employer incentives 111 82

(excluding salary and  administrative costs)

CHANGE 1985-86 ON SAME BUDGETED PERIOD CHANGE

LAST YEAR

COMMENT

$m % %

-85 -81.8 -84.2

-64 -8.3 -2.7

-5 -4.7 17.0 .  Lower than anticipated

approvals in skills  training programs,  unexpected delays in the  take-up of Australian  Traineeships and slow

take-up rate in adult  training programs.

-76 -29.3 -28.9

-29 -26.1 -1.6 .  Lower approvals in the

Jobstart program which  began on 1 December 1985,  December and January being  seasonably low activity  months, combined with the

slow submission of payment  claims.

FUNCTION/ CUMULATIVE OUTLAYS

DESCRIPTION TO

MAR MAR

1985 1986

$m .  $m

LEGISLATIVE SERVICES 228 251

.  Parliament House Construction Authority 86 132

FOREIGN AFFAIRS AND OVERSEAS AID 833 864

.  Aid payments to PNG 235 238

.  Other components of bilateral aid 253 227

Multilateral aid 142 136

CHANGE 1985-86 COMMENT

ON SAME BUDGETED

PERIOD CHANGE

LAST YEAR

$m % %

23 10.0 7.4

45 52.3 39.4 . Better than expected rates

of progress with  construction in the first  half of 1985-86.

31 3.7 4.1

3 1.3 1.6

-26 -10.3 -3.1 .  Delays in wheat shipments

and lower appropriation in  1985-86 of Emergency  Humanitarian Relief .  funds. Mainly

difficulties in the  administration of food aid  with recipient countries,  especially in Africa,

leading to low expenditure  to date.

-6 -4.5 11.5 . Delay in drawdowns by the

World Food Program of  Australian food aid.

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

GENERAL AND SCIENTIFIC  RESEARCH NEC 373 393

.  Australian Atomic  Energy Commission

30 33

. CSIRO 266 278

ADMINISTRATIVE SERVICES 1451 1632

.  Rent - civil departments 123 166

.  Net superannuation  payments  - Commonwealth  superannuation

departmental 369 409

CHANGE 1985-86 COMMENT

ON SAME BUDGETED PERIOD CHANGE LAST YEAR

$m % %

21 5.6 4.7

3 11.3 6.7 . Salary award increases.

12 4.6 3.6

181 12.5 10.2

43 34.6 39.8 . New leases are not being

finalised as early as  anticipated because of  competitive market conditions.

40 10.8 13.2 .  Increases arising from the

Carpenter Case are not  being paid until the end  of the financial year.

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

- Other 101 CR 81 CR

- Total 268 328

Taxation Administration 288 358

. Construction Services 144 155

.  Property and Management Services 88 114

.  ACT - General Administration 45 59

CHANGE 1985-86 COMMENT

ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m % %

20 19.8 -6.3

60 22.4 21.3

70 24.3 12.1

10 7.2 5.6

Lower than expected  receipt of superannuation  contributions from  Approved Authorities so

far this year due to  timing factors.

Mainly NWC decision and  increase in interest on  taxation overpayments.

Mainly NWC decision and  increases in the cost of  consultant work for  approved work projects.

27 30.5 20.5 . Mainly NWC decision and

increases in electricity  tariffs on Commonwealth  owned buildings.

14 31.1 27.8

FUNCTION/ CUMULATIVE OUTLAYS CHANGE 1985-86 COMMENT

DESCRIPTION TO ON SAME BUDGETED

PERIOD CHANGE

MAR MAR LAST YEAR

1985 1986

$m $m $m % %

PAYMENTS TO OR FOR THE STATES, NT AND LOCAL GOVERNMENT AUTHORITIES 9464 10268 805 8.5 6.9

.  Tax sharing grants/  financial assistance  and Temporary/Special grants - States 6973 7383 591 00

ft

00

Identified health  grants - States 1030 1110 80 7.8 00

State Government Loan 761 835 74 9.7 -4.6

Council Program  (excluding Housing  nominations and  offsetting Sinking Fund  Receipts

Special assistance grants  were paid in full during  June 85, whilst this year  they are being paid on a  weekly basis.

Accelerated payments were  made earlier in the year  as several States had not  then satisfied the

requirements for receiving  payments under the Housing  Nomination arrangements.  Also,  State Domestic

Raisings were not brought  to account until the end  of 1984-85.

%

FUNCTION/  DESCRIPTION

CUMULATIVE OUTLAYS  TO

MAR MAR

1985 1986

$m $m

. General revenue assistance to local government 487 535

. Tax sharing grants,   identified health  grants and debt  charges assistance/ Financial assistance  grants - Northern

Territory 412 419

. NT General Capital Assistance (excluding  Housing nominations and Repayments) 103 105

COMMENT CHANGE 1985-86  ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$m %

49 10.0 9.9

7 1.7 2.5 . Reflects the pattern of

payments for Debt Charges  Assistance in 1984-85  which were paid on an  emerging cost basis.

2 2.0 0.7 . Accelerated payments have

been made in the year to  date as the NT has only

recently commenced  receiving payments under  the Housing Nomination  arrangements.

FUNCTION/ CUMULATIVE OUTLAYS

DESCRIPTION TO

MAR MAR

1965 1986

$m $m

PUBLIC DEBT INTEREST 4151 5470

OUTLAYS SPREAD ACROSS  FUNCTIONS

. Departmental and Defence Force wages .

and salaries 4091 4531

. National Capital Development Commission (NCDC) - Construction 154 151

TOTAL OUTLAYS 46879 51591

CHANGE 1985-86 COMMENT

ON SAME BUDGETED  PERIOD CHANGE LAST YEAR

$ m  % %

1319 31.8 18.9 . Reflects, in part, changes

in the within-year pattern  of Treasury Note issue;  the cumulative percentage  increase has been  declining since December,   when it peaked at 37.9%,  and will continue to do so

as the year progresses.  Additional factors in. the  increase are that the  average yield on Note

issues to date has been  higher than estimated at  budget-time and the value  of the Australian dollar

against overseas  currencies has generally

Ã¢ÂÂ¢  been lower.

440 10.8 11.2

-3 -1.9 12.8 . Uneven pattern of payments

inherent in construction  activity.

4712 10.1 8.4

!

MINISTER FOR FINANCE

c o m m o n w e a l t h  g o v e r n m e n t  .

STATEMENT ÃÂÃÂÂ·’  FIHANC 1AL TRANSACTIONS 1985-06  S MILLION

I

I  !  I

BUDGET MONTH OF 9 MONTHS TC 9 MONTHS TO

ESTIMATE  '  1985-36 MARCH 1986 31.3.86 31.3.35

OUTLAYS

Defence 6,535 683.9 4,658.9 4,220.1 Education 1,914 495.3 3,898.7 3,489.5 Health . 6,701 571.1 5,102.0 4,607.0 Social Security and Welfare 19,077 1,505.8 13,967.9 13,130.6 Housing Urban and Regional Development (nee) and the 1,397 154.7 1,104.7 1,059.4Environment 38 13.9 38.5 5.0 Culture and Recreation Economic Services - 849 71.6 645.5 557.1Transport and Communication 1,785 116.5 1,265.2 1,299.1 Water Supply, Electricity and Gas 55 3.2 43.2 64.8 Industry Assistance and Development 1,256 64.1 830.0 748.9 Labour and Employment .  1,102 83.5 712.2 776.4 Other Economic Services General Public Services - 144 16.8 121.1 111.5Legislative Services 325 33.1 250.6 227.9 Law,  Order and Public Safety 454 40.8 325.4 310.9 Foreign Affairs and Overseas Aid 1,332 47.9 863.7 832.6 General and Scientific Research (nec) 4 80 43.3 393.4 372.6 Administrative Services Not allocated to Function - ' 2,176 156.5 1,631.71,450.7Payments to or for the States, the Northern Territoryand Local Government Authorities (ncc) 13,531 956.3 10,268.4 9,463.8 Public Debt InterestAllowances for Prospective Wage and Salary increases 6,724 647.3 5,469.6 4,150.6(non-Dcfence)  Ã¢ÂÂ  162 - - -Total Outlays 69,067 5705.6 51590.5 46,878.5RECEIPTS .Income Tax - Individuals - Gross PAYE 28,850 2280.3 21,055.1 18,789.4 - Kc 1  unth; 2.380DR 67.0DR 2.309.1DI t 1.921.6DI- Net PAYE 26.470 2213.3 18,746.0 16,867.8 - Other 5,760 437.8 990.6 832.5- Prescribed Payments 460 '  36.2 376.0 304.4 - Companies 6,440 237.3 3,375.1 2,837.6 - Withholding Tax - Dividends/Mining 180 11.2 144.1 115.0 .  - Interest 300 25.5 256.0 172.6Sales Tax 6,000 340.8 4,171.9 3,567.1 Excise Duty - Crude Oil and LVG 4,368 145.1 3,705.1 )  6,055.1 '  - Other 4,609 369.9 3,493.1 ) Customs Duty - Imports 3,209 234.4 2,532.2 2,152.0 - Coal Exports 70 4.9 43.9 44.0 Bank Accounts Debits Tax' 200 16.0 Ã¢ÂÂ 149.5 139.8 ACT Taxes and Charges 145 9.2 120.2 101.8 Other Taxes,  Fees and Fines 416 70.6 253.6 233.6Remissions - 0.2D 0.2D tTotal Taxation Revenue 58,627 4152.1 38,357.0 33,423.1Interest, Rent and Dividends 5,519 101.9 3,282.6 2,610.5Net Receipts from Government 2 . 9DR 2.0 2.,7 Enterprise TransactionsTotal Receipts . 64,149 4253.2 41,641.7 '  36,036.2DEFICIT 4,919 1452.4_____________ _9948.9 10,842.3\. continued over

BUDGET ESTIMATE

MONTH OF  MARCH 19 8 i 9 MONTHS TO  31.3.86

I  9 MONTHS TO  31.3.85

FINANCING TRANSACTIONS

Domestic Financing Â·

Treasury Bonds - Official r -  Non-Official - Less Discounts

92.2DR  356.6  .  12.3DR

467.9DR  2,510.7  166.SDR

1,860.7  4,374.3  211.3DR

Sub-total ) 252.1 1,876.3 6,023.7

Treasury Indexed Bonds - Official .- Non-Official - Less Discounts

-

255.9 32.1DR

-

Sub-total ) - 223.8 - '

Treasury Notes - Official - Non-Official

407.2 31.9

2,777.6 .  '   4,282.0 1,590.7 2,545.3

Sub-total ) 4,919 439.1 7,059.6 4,136.0

Australian Savings Bonds ) 150.9DR 1,858.0DR 230.1DR

Other Borrowings from Reserve Bank ) - Ã¢ÂÂ  r Ã¢ÂÂ   Â· .

Use of Cash Balances ) 510-9 1,138.8, 2-92.4

Other Loans and Financing Transactions ) 94.0 272.4 . .  ,  ,1.2DR

Total Domestic Financing 1,145.0 8,712.9 10,220.8 .  j

Overseas Financing 307.1 1,235.9 .  , 621.'5. -V

'. Total Financing Transactions 4,919 1,452.4 9.948.9 10.842.3

OUTSTANDING SHORT TERM DEPT AND CASH BALANCES

$ MILLION

Other Borrowings from Reserve Bank  Treasury Notes Cash Balances with Reserve Bank - Net Public Account

- Net Other Accounts .

NIL 9954.3

125.1 CR  .  665.8

M S KEATING

Secretary to the Department of Finance  18 April 1986

PETER WALSH  Minister for Finance

