The Reserve Bank of Australia publishes the monthly receipts and expenditures of the Australian Government. The figures for the end of May 2010 were just released. Here are some highlights:



Annual expenditure is running at $342 Billion, in a continued uptrend, with revenues flatlining, maintaining the levels achieved in April 2008.

Revenue is projected to increase to $400 Billion by 2014, up 35% from the current level of $296 Billion.



Company Tax (red line) has declined from its $66 Billion high to $56.7 Billion. Remember that the Government was targeting around $10 Billion in collections for the new resource tax, so it was a sizeable increase in Company tax, let alone what resource companies just pay. Interestingly, Company tax is rebated through the franking credit system as a tax refund to investors such as those with retirement savings. As the new resource tax is not classed as part of the franking credit tax rebate system, investors don't get the benefit of being refunded the additional tax. In effect, it is the old double tax system.

Also you can see that total individual tax (net of refunds) (blue line) has declined from its high of $127.4 Billion to the current level of $123 Billion.



Where is a bull market when you need it?

As previously stated, the Australian Treasury Department forecasts, not the Government, is predicting to breakeven by 2014. This requires a 35% increase in GDP, which bodes well for the economy and sharemarket.

Michael Cornips

General Advice Warning