La enseñanza de la historia empieza con los grupos sociales

This chapter details the government finance module in VURM, which determines the financial position of each jurisdictional government. 25

Changes in each item of government revenue and expenditure are linked to changes in the model core through the use of relevant drivers of underlying economic activity (usually expressed in percentage change form) and, in the case of government taxes, to the relevant average tax rates. Changes in the government finance module also feedback into the model core.26 _{For example, for} the average tax rate on non-labour primary factor income used in the model core, the coefficient TGOSINC, is calculated by dividing ‘Income taxes levied on enterprises’ in the government finance module (the coefficient VGFSI_132) by ‘Non-labour primary factor income, after taxes on production‘ in the model core (the coefficient V1GOSINC_I).

The government finance module database for 2005-06 includes all nine jurisdictional governments in Australia: the eight State and Territory governments (including local government); and the Australian Government. It contains data for the reference year 2005-06 sourced from the 2008-09 editions of ABS Government Finance Statistics (Cat. no. 5512.0) and ABS Taxation Revenue Australia (Cat. no. 5506.0).27 _{The database is expressed in $ million and is detailed in tables 4.6 to 4.8 at the end of this} chapter.

The structure of the module is based on the framework used in the ABS Government Financial Statistics (GFS) (Cat. no. 5512.0), which provides standardised financial data across jurisdictional governments on a financial year basis. This ABS GFS framework is expanded to include additional taxation information from ABS Taxation Revenue Australia (Cat. no. 5506.0).

The chapter is divided into three sections: 4.1 Government revenue

4.2 Government expenditure 4.3 Government budget balances

In the module, a standard naming convention is used to identify each component of government revenue or expenditure. The prefix in each variable name denotes which of the three sections the variable relates to:

 a change in nominal government revenue is denoted by the prefix ‘d_wgfsi_’;

 a change in nominal government expenditure is denoted by the prefix ‘d_wgfse_’; and  a change in the nominal fiscal position is denoted by the prefix ‘d_wgfs’.

25 _{References to ‘regional government’ in this chapter, and in the government finance module, include local} government. Government in the government finance module relates to the ‘total public sector’ as defined by the ABS in Government Financial Statistics (Cat. no. 5512.0).

26

As it is not possible, at this stage, to reconcile the items of government revenue and expenditure in the ABS

Input-Output Tables (Cat. no. 5209.0.55.001) on which the model core is based to the detailed revenue and expenditure categories in ABS Government Finance Statistics (Cat. no. 5512.0), the government finance module cannot, at this stage, be fully integrated with data from the model core. For example, ABS Government Finance Statistics report revenue collected from federal taxes on the provision of goods and services in 2005-06 amounted to $67 882 million, whereas the ABS Input-Output Tables report that taxes, net of subsidies, on production of $79 495 million.

27 _{Other tax revenue from ABS Taxation Revenue Australia has been adjusted to align with the total from ABS} Government Finance Statistics that is net of intragovernmental transfers.

The three digit suffix in each variable name identifies the relevant component of government revenue or expenditure. The relevant three digit codes for each module are set out in tables 4.1, 4.2 and 4.3, respectively. For example the variable d_wgfsi_121(“Vic”) denotes the change in payroll tax revenue collected by the Victorian government, and the variable d_wgfse_100(“WA”) denotes the change in gross operating expenses of the Western Australian government. Suffixes ending in 0 denote the relevant sub-totals (for example, d_wgfsi_010 denotes total taxes on goods and services, d_wgfsi_011 to d_wgfsi_018). Suffixes ending in 000 denote the relevant grand totals (for example, d_wgfsi_000 denotes total GFS revenue for each jurisdictional government).28 _{Most variables in the} government finance module are defined over all jurisdictions to maintain flexibility should government financial arrangements change and to simplify processing.29

The equation names reflect the variable being determined. Each equation generally consists of two blocks:

 the first for regional governments (the equation name generally ends with an ‘A’); and  the second for the federal government (the equation name generally ends with a ‘B’).

4.1

Government revenues (E_d_wgfsi_000A to E_d_wgfsi_500B)

The government finance module separately identifies 19 individual sources of government revenue and a number of revenue aggregates (table 4.1).

Changes in each item of government revenue are linked to those in the model core through the use of relevant drivers of underlying economic activity (usually expressed in percentage change form) and, in the case of taxes, to the relevant average tax rates. The relevant drivers are set out in table 4.5 at the end of this chapter. As far as practicable, the drivers for the changes in taxation revenue in the government finance module are the changes in appropriate tax collections in the model core. This is facilitated by having commodity taxes in the model core separately identified by type: federal government non-GST, regional government non-GST, and federal government GST.

28 _{The initial levels coefficient that corresponds to each variable adopts a similar naming convention, but with a} ‘V’ replacing the ‘d_w’ in each variable name. The coefficient VGFSI_100, for example, is the levels counterpart of the variable d_wgsi_100.

29

For example, the federal government is the only source of age pension payments. However, the variable d_wgfsi_230 is defined over all jurisdictional governments for completeness. In the case of age pension payments, the elements corresponding to the regional governments are set to zero.