State and Federal Taxes on Tourism in Australia · State and Federal Taxes on Tourism in Australia...

Sustainable Tourism Cooperative Research CentreCentre for Tourism Economics and Policy Research

State and Federal Taxes on Tourism in Australiaestimates for 2003/04

Peter Forsyth, Daniel Pambudi, Ray Spurr, Larry Dwyer, Thiep Van Ho and Serajul Hoque

Estimates for 2003/04

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Disclaimer While all reasonable efforts have been made to gather the most current and appropriate information, the Sustainable Tourism Cooperative Research Centre (STCRC) does not give any warranty as to the correctness, completeness or suitability of the information, and shall in no event be liable for any loss or damage that might be suffered as a result of reliance on this information. Please direct all enquiries to the STCRC – contact details are on the back cover. National Library of Australia Cataloguing-in-Publication Title: State and Federal taxes on tourism in Australia : estimates for 2003/04 /

authors, Peter Forsyth ... [et al.]. Publisher: Sustainable Tourism CRC, 2007. ISBN: 9781920965587 (pbk.) Notes: Bibliography. Subjects: Tourism--Taxation--Australia. Revenue sharing--Australia--Statistics. State

governments--Australia--Finance. Federal government--Australia. Other Authors/Contributors: Pambudi, Daniel. Spurr, Ray. Dwyer, Larry. Van Ho, Thiep. Hoque, Serajul. Dewey Number: 336.27833847094 Copyright © CRC for Sustainable Tourism Pty Ltd 2007 All rights reserved. Apart from fair dealing for the purposes of study, research, criticism or review as permitted under the Copyright Act, no part of this book may be reproduced by any process without written permission from the STCRC. Acknowledgements This document results from a research project undertaken by the STCRC, in conjunction with each Australian state and territory tourism authority.

Qantas Airways Limited is a major supporter of the STCRC’s Centre for Tourism Economics and Policy Research, through its sponsorship of the Qantas Chair in Travel and Tourism Economics at the University of New South Wales.

The STCRC was established and is supported under the Australian Government’s Cooperative Research Centre’s Program. First published in Australia in 2007 by CRC for Sustainable Tourism Pty Ltd. Printed in Australia (Gold Coast, Queensland). Cover designed by Sin Design.

STATE AND FEDERAL TAXES ON TOURISM IN AUSTRALIA

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ABOUT THE AUTHORS The following members of the STCRC Centre for Tourism Economics and Policy Research (CTEPR) contributed to this research:

Peter Forsyth Professor of Economics and Deputy Director, Tourism Research Unit, Monash University

Daniel Pambudi Research Fellow, CTEPR, Monash University Ray Spurr Director of CTEPR, Senior Research Fellow STCRC, School of Marketing,

University of New South Wales Larry Dwyer Qantas Professor of Travel and Tourism Economics, University of New

South Wales Thiep Van Ho Senior Economic Modeller, CTEPR, University of New South Wales Serajul Hoque Research Fellow, CTEPR, Monash University


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CONTENTS

ABOUT THE AUTHORS _________________________________________________________________III

SUMMARY_____________________________________________________________________________ VI

CHAPTER 1 INTRODUCTION AND METHOD ______________________________________________ 1 ESTIMATION OF TOURISM TAXES ___________________________________________________________ 1 STATE-BASED ESTIMATES OF TAXES ON TOURISM ______________________________________________ 2

CHAPTER 2 PRODUCTION TAXES ON TOURISM __________________________________________ 5

CHAPTER 3 COMMODITY TAXES ON TOURISM _________________________________________ 10

CHAPTER 4 TOTAL TOURISM TAXES LEVIED AND RECEIVED BY STATES/TERRITORIES _ 13

APPENDIX A: CONCEPTS, SOURCES AND METHODS USED IN DEVELOPING TAXES ON TOURISM FOR THE AUSTRALIAN STATES AND TERRITORIES ____________________________ 27 APPENDIX B: DEFINITIONS OF SELECTED TERMS USED IN THIS REPORT*________________ 35

REFERENCES __________________________________________________________________________ 36

LIST OF ABBREVIATIONS ______________________________________________________________ 37


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LIST OF TABLES

Table 1: Tourism Production Taxes, By Type of Tax, 2003/04, $M ___________________________________ 5 Table 2: Tourism Production Taxes, By Type of Industry, 2003/04, $M________________________________ 5 Table 3: State Tourism Property Taxes, By Type of Industry, 2003/04, $M _____________________________ 6 Table 4: Federal Tourism Fringe Benefits Taxes (FBT), By Type of Industry, 2003/04, $M ________________ 7 Table 5: State Tourism Payroll Taxes, By Type of Industry, 2003/04, $M ______________________________ 8 Table 6: Federal Tourism Other Production Taxes, By Type of Industry, 2003/04, $M ____________________ 9 Table 7: Tourism GST and Other Commodity Taxes Federal, Levied By State or Territory, 2003/04, $M ___ 10 Table 8: GST Revenues Generated by Tourism, By State or Territory, 2003/04, $M _____________________ 10 Table 9: Tourism GST, Revenues Distributed to States or Territories, 2003/04, $M______________________ 11 Table 10: Tourism Other Commodity Taxes (Including Subsidies), By State or Territory, 2003/04, $M ______ 11 Table 11: Tourism Fuel, Alcohol, Gambling, and Other Taxes And Subsidy, By State or Territory, 2003/04, $M_____________________________________________________________________________________ 12 Table 12: Tourism Taxes Levied and Received in NSW 2003/04 ____________________________________ 13 Table 13: Tourism Taxes Levied and Received in VIC, 2003/04_____________________________________ 14 Table 14: Tourism Taxes Levied and Received in QLD, 2003/04 ____________________________________ 15 Table 15: Tourism Taxes Levied and Received in SA, 2003/04 _____________________________________ 16 Table 16: Tourism Taxes Levied and Received in WA, 2003/04_____________________________________ 17 Table 17: Tourism Taxes Levied and Received in TAS, 2003/04 ____________________________________ 18 Table 18: Tourism Taxes Levied and Received in NT, 2003/04 _____________________________________ 19 Table 19: Tourism Taxes Levied and Received in ACT, 2003/04 ____________________________________ 20 Table 20: Tourism Taxes Levied and Received in Australia, 2003/04_________________________________ 21 Table 21: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in NSW ________________ 22 Table 22: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in VIC _________________ 22 Table 23: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in QLD_________________ 23 Table 24: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in SA __________________ 23 Table 25: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in WA _________________ 24 Table 26: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in TAS _________________ 24 Table 27: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in NT __________________ 25 Table 28: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in ACT_________________ 25 Table 29: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in Australia _____________ 26


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SUMMARY

Total net tourism taxation in Australia was $6922 million in 2003/04: • This equates to 19.6% of total tourism gross domestic product (TGDP), or • 9.1% of total tourism expenditure or consumption.

The revenues from these taxes can be divided into three categories: State taxes of $634.2 million (9.2%), Federal taxes of $1797.4 million (26.0%), and GST at $4490.4 million (64.9%).


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Tourism taxes include taxes on products (for example, GST, fuel taxes, alcohol taxes and gambling taxes) and taxes on production (for example, property taxes, payroll taxes and FBT):

• Taxes on tourism products are recorded in the ABS (national) Tourism Satellite Account (TSA)1 and STCRC’s State and Territory TSAs reports2.

• Subsidies on products (primarily in the form of government funding for urban transport) have been subtracted from this figure to provide net taxes on products.

• Taxes on production are currently incorporated within the overall estimates of tourism gross value added (TGVA) and are thus not separately identified in TSA estimates.

Tourism taxation can be further broken down into:

• State taxes on production ($869.7 million) • State taxes on products ($662.5 million) • State subsidies on products ($-898.0 million) • Federal taxes on production ($156.3 million) • Federal taxes on products ($1741.1 million) • Federal subsidies on products ($-100.0 million) • GST ($4490.4 million).

For every $100 of tourism expenditure in Australia, $9.1 is paid to federal, state or local governments in tax revenues net of any subsidies provided.

1 Australian Bureau of Statistics 2007 2 STCRC 2007


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Each $9.1 of net tax revenues is made up as follows: • State taxes on production ($1.1); • State taxes on products ($0.9); • State subsidies on products ($-1.2); • Federal taxes on production ($0.2); • Federal taxes on products ($2.3); • Federal subsidies on products ($-0.1); and • GST ($5.9) (see Table 20).

GST, while collected by the Commonwealth Government, is subsequently redistributed back to the states and territories. The allocation of GST redistribution is based on a formula recommended by the Commonwealth Grants Commission3 and is not directly related to individual shares of GST from tourism goods and services raised in the state or territory concerned (see Table A.8, Appendix A). The following tables summarise the breakdown of tourism taxes by state or territory. Detailed breakdowns by state and territory are provided in Chapter 4 of this report.

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Tourism Taxes Levied and Received by State or Territory, 2003/04, $m

Tourism Associated Statistics NSW VIC QLD SA WA TAS NT ACT Australia Tourism GSP/GDP 12240.9 7278.6 8111.7 2237.5 3170.1 949.8 740.6 532.7 35262.0

Tourism output 23479.3 13485.1 15193.3 3901.3 5640.1 1654.5 1382.5 906.9 65643.0

Tourism GVA 10352.1 6117.9 6633.5 1841.6 2586.3 783.6 615.7 435.3 29365.0

Tourism consumption 24201.3 15421.1 19170.7 4592.9 7154.4 2181.7 1786.8 1284.1 75798.0

Taxes Levied on Tourism NSW VIC QLD SA WA TAS NT ACT Australia

State taxes

State taxes on production 341.6 165.5 204.2 46.4 71.8 17.7 9.7 12.8 869.7

State taxes on products 210.0 133.6 182.3 36.1 56.4 19.6 14.5 10.0 662.5

State subsidies -478.5 -164.6 -135.1 -31.9 -46.4 -8.6 -23.9 -9.0 -898.0

Total 73.2 134.6 251.4 50.6 81.8 28.8 0.2 13.8 634.2

Federal taxes

Federal taxes on production

59.5 30.5 34.2 8.5 13.3 3.7 3.9 2.5 156.3

Federal taxes on products 572.1 338.9 389.3 134.1 192.2 46.9 36.8 30.8 1741.1

Federal subsidies -53.4 -15.8 -16.2 -3.4 -5.6 -1.2 -3.3 -1.2 -100.0

Total 578.2 353.6 407.2 139.2 199.9 49.5 37.5 32.2 1797.4

GST on Tourism 1424.1 896.2 1155.2 276.7 430.6 124.9 106.8 75.9 4490.4

Total taxes levied on tourism

2075.5 1384.4 1813.8 466.5 712.3 203.2 144.5 121.8 6922.0

Taxes Received on Tourism

NSW VIC QLD SA WA TAS NT ACT Australia

State taxes

State taxes on production 341.6 165.5 204.2 46.4 71.8 17.7 9.7 12.8 869.7

State taxes on products 210.0 133.6 182.3 36.1 56.4 19.6 14.5 10.0 662.5

State subsidies -478.5 -164.6 -135.1 -31.9 -46.4 -8.6 -23.9 -9.0 -898.0

Total 73.2 134.6 251.4 50.6 81.8 28.8 0.2 13.8 634.2

Federal taxes

Federal taxes on production

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Federal taxes on products 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Federal subsidies -53.4 -15.8 -16.2 -3.4 -5.6 -1.2 -3.3 -1.2 -100.0

Total -53.4 -15.8 -16.2 -3.4 -5.6 -1.2 -3.3 -1.2 -100.0

GST on Tourism 1305.4 942.0 883.7 426.2 426.2 188.4 228.8 89.7 4490.4

Total tax receipts on tourism

1325.2 1060.8 1118.8 473.4 502.3 216.0 225.7 102.3 5024.6


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Direct Tax Receipts Impact of $100m Change in Tourism Expenditure by State or Territory, 2003/04

NSW VIC QLD SA WA TAS NT ACT Australia Change in tourism consumption, $m

100 100 100 100 100 100 100 100 100

State government receipts, $m

Change in state taxes 2.3 1.9 2.0 1.8 1.8 1.7 1.4 1.8 2.0

Change in state share of GST 1.7 1.2 1.2 0.6 0.6 0.2 0.3 0.1 5.9

Change in state subsidies -2.0 -1.1 -0.7 -0.7 -0.6 -0.4 -1.3 -0.7 -1.2

Total 2.0 2.1 2.5 1.7 1.7 1.6 0.3 1.2 6.8

Federal government receipts, $m

Change in federal taxes 2.6 2.4 2.2 3.1 2.9 2.3 2.3 2.6 2.5

Change in federal subsidies -0.2 -0.1 -0.1 -0.1 -0.1 -0.1 -0.2 -0.1 -0.1

Total 2.4 2.3 2.1 3.0 2.8 2.3 2.1 2.5 2.4

Other state receipts, $m

Change in receipts to states and territories from distribution of GST revenues

4.2 4.6 4.8 5.5 5.4 5.5 5.7 5.8 0.0

Total increase in tourism taxation, $m

8.6 9.0 9.5 10.2 10.0 9.3 8.1 9.5 9.1


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Chapter 1

INTRODUCTION AND METHOD This report on the contribution of tourism taxes to the economies of the Australian states/territories has been prepared by the Centre for Tourism Economics and Policy Research, a research unit of the Sustainable Tourism Cooperative Research Centre (STCRC). The report covers each of the Australian states and territories.

Estimation of Tourism Taxes

Estimates of taxes presented in this report are consistent with the tax data presented in the national Australian Tourism Satellite Account (ATSA) as produced by the Australian Bureau of Statistics (ABS 2007). ATSA includes data on two types of taxes – taxes on production, which are included in Tourism Gross Value Added (TGVA) and taxes on products, which form the difference between TGVA and Tourism Gross Domestic Product (TGDP).

Taxes on production include state and federal taxes. The two main forms of state taxes are taxes on property and payroll taxes. Federal taxes include Fringe Benefits Tax (FBT) and other taxes. The share of these taxes in total tourism taxes on production is estimated from data on these specific taxes. Tourism’s share of each of these taxes was assumed to be proportional to tourism’s share in gross output. Specific taxes on products such as those on gambling, fuel and alcoholic beverages are estimated from ABS data on these taxes and the tourism share of these taxes is assumed to be proportional to tourism’s share of total output. The ATSA embodies estimates of subsidies to local and long distance passenger transport. Estimates of these were obtained from the ABS. The difference between the sum of these taxes and subsidies and total taxes on products was assumed to be Goods and Services Taxes (GST). GST on tourism has thus been estimated as a residual. The ATSA embodies subsidies of $998m, allocated between local and long distance passenger transport. The former includes tourism’s share of subsidies to urban passenger transport. We have been unable to determine the exact nature of the subsidies to long distance passenger transport. Given that air transport does not receive many subsidies (some state government incentives for airlines to base themselves at their airports, some subsidies for services to remote towns), we assume that most of these subsidies relate to ground transport including long distance passenger rail and coaches. Passenger trains and feeder buses do receive some subsidies. Nevertheless, the size of the estimated subsidy is much larger than expected. In its study of assistance to tourism the Productivity Commission estimated that the transport subsidy was of the order of $462m4. A narrow definition of tourism was adopted by the Productivity Commission in making this estimate. If the estimate is scaled up for the broader TSA based definition of tourism, we calculate a subsidy estimate of $629m. This is still $369m less than the ABS estimate embodied in ATSA. The higher ABS subsidy estimate has been used in this report to ensure consistency with the ATSA and STCRC TSA reports. The subsidy was then allocated between state and federal governments on the basis of $100m to the federal government and the remainder to state governments. The estimated federal subsidy was adapted from Productivity Commission exploratory estimates of assistance to tourism in passenger transport services and infrastructure for the years 2000 to 2002 suggesting that from 6% to 7% of total tourism subsidies came from the federal government5. 4 Productivity Commission 2005 5 Productivity Commission 2005


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State-Based Estimates of Taxes on Tourism

In this report we set out estimates of taxes on tourism on a state-by-state basis. There is very limited information about tourism taxation at a state level. Indeed, information on Australia-wide taxation of tourism is very limited. ATSA provides details for only two types of taxes – taxes on production, which form part of Tourism GVA, and taxes on products, which constitute the difference between Tourism GVA and Tourism GDP. These tax estimates are the net outcome of a range of taxes on tourism, as well as subsidies granted to tourism.

To obtain estimates of state taxes, it is necessary to:

• break up the tax estimates into more categories of taxes, so that state and federal taxes can be identified; and

• derive estimates of the amounts of each type of tax at the level of each state or territory. In this report, we have allocated the total amount of each category of state taxes to each state or territory. This is done on the basis of each tax having the same proportion of state tourism output. This means that they are top-down rather than bottom-up estimates. A bottom-up approach would require much more data than are currently available and would be a major research exercise. Thus, differences in some state tax rates, e.g. on gambling, will not be picked up here. Nevertheless, we believe that these tables provide a useful and generally reliable overall picture. Several of the tables provide industry-by-industry estimates of each type of tax on a state-by-state basis. However, it is the summary tables that are probably of the most interest. Tables 12 to 19 provide estimates of how much tax is raised on tourism in each of the states and of how much revenue each state receives from taxes levied on tourism. These sums are different because of the workings of the GST system. By far the largest tax on tourism is GST. This is not strictly a ‘state’ or ‘federal’ tax, since revenues from it are collected federally and then allocated to the states on a different basis from that on which it is collected. Thus the GST on tourism in Tasmania was $124.9m but the amount that Tasmania received from GST levied on tourism nationally was $188.4m. Tables 21 to 28 provide estimates of how increases in expenditure on tourism in a state impact directly on tax receipts in that state. Thus, for example, if an extra $100m is spent on tourism in Tasmania, this will lead to an additional direct impact of $9.3m in taxes. Of this, the Commonwealth government receives $2.3m and the Tasmanian state government gains an extra $1.6m in revenue, with the remaining $5.7m being GST. Because GST revenue is allocated between the states according to the Commonwealth Grants Commission Horizontal Fiscal Equalisation formula, rather than according to where the additional GST has been raised, Tasmania receives only $0.2m of the additional GST revenue and $5.5m is allocated across the remaining states and territories6 (see Table A.8, Appendix A). These estimates incorporate only direct impacts – the full impacts could be somewhat different as a result of flow-on effects across the economy generally requiring the use of a technique, such as Computable General Equilibrium (CGE) modelling. Since the larger states generate a larger share of total GST revenues, even with fiscal equalisation they still receive a larger overall share of GST redistribution. The absolute sums of additional tourism GST revenue redistributed will thus be greater to those states. However, Tasmania will also enjoy a share of additional GST receipts from tourism expenditure in other states allocated to it on the basis of the Commonwealth redistribution formula.

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The tourism taxes referred to in this report include taxes on both tourism production and on the sale of tourism products. This report thus provides additional detail on tourism taxes to that which is included in either ATSA or the State/Territory TSA developed by the STCRC. Both of these TSA frameworks include only those taxes that are levied on the sale of tourism products. The estimation of the tourism production taxes for six Australian states and two territories relies heavily on the tourism output estimates from STCRC State and Territory TSA7, and the MMRF database 2003/04 developed by the Centre of Policy Studies (CoPS) at Monash University8. This database recognises six different production taxes: payroll taxes, property taxes, FBT, agricultural-land taxes, other federal production taxes, and other state production taxes. Payroll tax, property tax, land tax, and other state production taxes are state levied taxes on production and accrue to state governments. FBT and other federal production taxes are generated in states and accrue to the federal government. Payroll tax is levied on the annual payroll of employers according to formulae which vary from one state or territory to another. Payroll tax is levied on large firms within an industry. A firm is defined as large if the sum of wages, salaries and supplements and imputed wages for that firm is above the payroll tax threshold. Each such firm pays a fraction of the amount by which its wage bill exceeds the threshold. Hence, there are differences in payroll tax rates not only between states but also as applied to the overall output of industries within a state. For examples, the rate of payroll tax paid to industry output of Food Manufacturing in New South Wales is 0.37%, in Victoria it is 0.41%, in Queensland 0.28%, in South Australia 0.38%, in Western Australia 0.42%, in Tasmania 0.35%, in Northern Territory 0.32%, and in the Australian Capital Territory it is 0.37% (see Table A.4, Appendix A).

7 STCRC 2007 8 Adams 2006


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Property taxes include taxes on immobile property and stamp duties, and are levied in proportion to the rental cost of fixed capital. In this report, property taxes, which are in fact levied by local governments, have been included with state government taxes. Other production taxes are derived from the Other Costs in the Agriculture and business service industry of the MMRF database. This has been mapped to the tourism industry data to provide taxes on motor vehicle hiring and other production taxes in agriculture, which arise from statutory levies (e.g. product marketing, research and development). Statutory levies in the agriculture industry have been excluded from the production tax estimates in this report. Note that FBT and other federal production taxes are levied by the state or territory government but accrue to the federal government, whereas the rest of production taxes accrue to the state governments. For the purposes of this report, tourism production taxes have been estimated by using STCRC state and territory tourism output data9 and tourism production tax rates. The tourism production tax rates come from the MMRF database with the mapping between the tourism and MMRF industries. Further details on the method of deriving tourism production taxes are provided in Appendix A. These data sources provide the necessary information to derive production taxes on tourism consistent with the State and Territory TSAs developed by the STCRC10, which add up to the ATSA11. The estimation of the tourism product taxes for eight Australian states/territories is derived from the STCRC State and Territory TSA estimates of net taxes on tourism products12. This report identifies three categories of taxes on tourism products: GST, other commodity taxes (state and federal), and subsidies on commodities (state and federal). State ‘other commodity’ taxes comprise alcohol taxes and gambling taxes. Federal other commodity taxes comprise fuel taxes and other taxes (taxes on imports). Again, state subsidies refer to local area and long distance passenger transportation while federal subsidies refer only to long distance passenger transportation.

9 STCRC 2007 10 STCRC 2007 11 Australian Bureau of Statistics 2007 12 STCRC 2007


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Chapter 2

PRODUCTION TAXES ON TOURISM Table 1: Tourism Production Taxes, by Type of Tax, 2003/04, $m

NSW VIC QLD SA WA TAS NT ACT AUS

State taxes

Property taxes 172.8 78.4 127.5 22.9 32.0 7.6 2.7 8.2 452.2

Payroll taxes 168.8 87.2 76.7 23.5 39.8 10.1 7.0 4.5 417.5

Total 341.6 165.5 204.2 46.4 71.8 17.7 9.7 12.8 869.7

Federal taxes

FBT 57.4 29.4 32.8 8.1 12.5 3.7 3.8 2.4 150.1

Other federal taxes 2.2 1.1 1.4 0.4 0.8 0.1 0.1 0.1 6.2

Total 59.5 30.5 34.2 8.5 13.3 3.7 3.9 2.5 156.3

Total 401.2 196.1 238.3 54.9 85.1 21.5 13.6 15.3 1026.0

Table 2: Tourism Production Taxes, by Type of Industry, 2003/04, $m NSW VIC QLD SA WA TAS NT ACT AUS

Travel agency and tour operator services

2.4 1.3 1.6 0.4 0.6 0.4 0.2 0.1 7

Taxi transport 1.0 0.6 1.5 0.2 0.3 0.1 0.0 0.1 4

Air and water transport 79.1 16.8 25.3 3.8 6.0 1.1 2.3 1.7 136

Motor vehicle hiring 1.7 0.8 1.2 0.4 0.6 0.2 0.1 0.1 5

Accommodation 87.4 43.9 61.3 12.0 20.1 5.7 2.8 3.9 237

Cafés, restaurants and food outlets 12.2 6.1 8.5 1.6 2.8 0.8 0.4 0.5 33

Clubs, pubs, taverns and bars 5.9 3.0 4.1 0.8 1.4 0.4 0.2 0.3 16

Other road transport 18.8 10.9 25.0 3.6 6.2 1.9 2.3 2.3 71

Rail transport 5.8 2.4 1.3 0.3 0.1 0.0 0.0 0.0 10

Food manufacturing 11.0 7.4 6.3 1.4 2.1 0.7 0.0 0.1 29

Beverage manufacturing 3.2 1.9 2.8 1.2 0.8 0.1 0.0 0.0 10

Transport equipment manufacturing 2.1 1.5 0.6 0.4 0.3 0.0 0.0 0.0 5

Other manufacturing 12.8 11.8 7.0 1.6 2.1 0.6 0.0 0.1 36

Retail trade 65.6 30.7 36.2 8.8 13.8 4.0 1.9 2.0 163

Casinos and other gambling services 0.7 0.3 0.6 0.1 0.2 0.0 0.1 0.0 2

Libraries, museums and arts 2.5 1.2 2.0 0.3 0.5 0.2 0.2 0.1 7

Other entertainment services 8.7 4.1 6.8 0.9 1.8 0.6 0.7 0.3 24

Education 13.8 9.0 3.7 1.2 3.1 0.6 0.3 0.5 32

Ownership of dwellings 36.6 28.8 22.0 9.7 11.7 2.7 0.8 1.8 114

All other industries 29.8 13.7 20.4 6.4 10.6 1.5 1.3 1.3 85

Total 401.2 196.1 238.3 54.9 85.1 21.5 13.6 15.3 1026


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Table 3: State Tourism Property Taxes, by Type of Industry, 2003/04, $m NSW VIC QLD SA WA TAS NT ACT AUS


0.4 0.2 0.4 0.0 0.1 0.0 0.0 0.0 1.1

Taxi transport 0.6 0.3 0.9 0.1 0.1 0.1 0.0 0.1 2.2

Air and water transport 47.8 8.4 18.1 1.6 2.9 0.6 0.6 1.0 81.0

Motor vehicle hiring 0.4 0.2 0.4 0.1 0.1 0.1 0.0 0.0 1.4

Accommodation 29.2 12.3 29.2 3.3 5.2 1.3 0.4 1.9 82.9

Cafés, restaurants and food outlets 4.1 1.7 4.1 0.4 0.7 0.2 0.1 0.3 11.5

Clubs, pubs, taverns and bars 2.0 0.8 2.0 0.2 0.4 0.1 0.0 0.1 5.6

Other road transport 11.2 5.8 18.3 2.0 3.3 0.9 0.4 1.6 43.6

Rail transport 1.9 0.6 0.6 0.1 0.0 0.0 0.0 0.0 3.2

Food manufacturing 5.5 3.1 3.2 0.5 0.7 0.2 0.0 0.0 13.3

Beverage manufacturing 2.8 1.6 2.7 1.0 0.6 0.1 0.0 0.0 8.8

Transport equipment manufacturing 0.5 0.3 0.2 0.1 0.0 0.0 0.0 0.0 1.1

Other manufacturing 7.2 4.3 4.6 0.6 0.9 0.3 0.0 0.1 18.0

Retail trade 9.8 3.9 8.8 1.0 1.6 0.4 0.1 0.5 26.1

Casinos and other gambling services 0.2 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.6

Libraries, museums and arts 0.7 0.3 0.8 0.1 0.1 0.0 0.0 0.0 2.1

Other entertainment services 2.4 1.1 2.9 0.2 0.4 0.1 0.1 0.1 7.3

Education 1.7 1.1 0.7 0.3 0.4 0.1 0.0 0.1 4.3

Ownership of dwellings 36.6 28.8 22.0 9.7 11.7 2.7 0.8 1.8 114.0

All other industries 8.0 3.3 7.6 1.7 2.5 0.4 0.1 0.5 24.1

Total 172.8 78.4 127.5 22.9 32.0 7.6 2.7 8.2 452.2

Note: Property taxes include taxes on property for local government.


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Table 4: Federal Tourism Fringe Benefits Taxes (FBT), by Type of Industry, 2003/04, $m NSW VIC QLD SA WA TAS NT ACT AUS


0.4 0.3 0.3 0.1 0.1 0.1 0.1 0.0 1.3

Taxi transport 0.3 0.2 0.4 0.1 0.1 0.1 0.0 0.0 1.3



Accommodation 11.0 6.4 9.0 2.0 3.2 1.1 0.8 0.6 34.1




Rail transport 1.2 0.6 0.3 0.1 0.0 0.0 0.0 0.0 2.1





Retail trade 10.4 5.9 7.5 1.8 2.7 0.9 0.6 0.5 30.2




Education 2.2 1.8 0.8 0.2 0.6 0.1 0.1 0.1 6.0



Total 57.4 29.4 32.8 8.1 12.5 3.7 3.8 2.4 150.1


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Table 5: State Tourism Payroll Taxes, by Type of Industry, 2003/04, $m NSW VIC QLD SA WA TAS NT ACT AUS

Travel agency and tour operator services 1.7 0.9 0.9 0.3 0.4 0.2 0.1 0.1 4.6

Taxi transport 0.2 0.1 0.2 0.1 0.1 0.0 0.0 0.0 0.6



Accommodation 47.1 25.1 23.1 6.7 11.7 3.3 1.5 1.4 120.0




Rail transport 2.8 1.2 0.4 0.2 0.1 0.0 0.0 0.0 4.6





Retail trade 45.5 20.9 19.9 6.0 9.5 2.8 1.2 1.0 106.7




Education 9.9 6.1 2.2 0.7 2.1 0.4 0.2 0.2 21.7



Total 168.8 87.2 76.7 23.5 39.8 10.1 7.0 4.5 417.5


9

Table 6: Federal Tourism Other Production Taxes, by Type of Industry, 2003/04, $m NSW VIC QLD SA WA TAS NT ACT AUS


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Taxi transport 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0



Accommodation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0




Rail transport 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0





Retail trade 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0




Education 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0



Total 2.2 1.1 1.4 0.4 0.8 0.1 0.1 0.1 6.2 Note: Other Production Taxes are calculated as a residual of those production taxes not captured elsewhere. They are derived from the Other Costs in the Agriculture and Business Service Industry of the MMRF database, then mapped to the tourism industry data to provide taxes on motor vehicle hiring and other production taxes in agriculture, with agricultural levies subsequently excluded for the purposes of this report.


10

Chapter 3

COMMODITY TAXES ON TOURISM Table 7: Tourism GST and Other Commodity Taxes Federal, Levied by State or Territory, 2003/04, $m


GST 1424.1 896.2 1155.2 276.7 430.6 124.9 106.8 75.9 4490.4

State taxes

Other commodity taxes 210.0 133.6 182.3 36.1 56.4 19.6 14.5 10.0 662.5

Subsidies -478.5 -164.6 -135.1 -31.9 -46.4 -8.6 -23.9 -9.0 -898.0

Total -268.5 -31.0 47.2 4.2 10.0 11.1 -9.5 1.0 -235.5

Federal taxes

Other commodity taxes 572.1 338.9 389.3 134.1 192.2 46.9 36.8 30.8 1741.1

Subsidies -53.4 -15.8 -16.2 -3.4 -5.6 -1.2 -3.3 -1.2 -100.0

Total 518.7 323.1 373.1 130.7 186.6 45.8 33.5 29.7 1641.1

Total 1674.4 1188.3 1575.4 411.6 627.2 181.7 130.9 106.5 5896.0

Table 8: GST Revenues Generated by Tourism, by State or Territory, 2003/04, $m NSW VIC QLD SA WA TAS NT ACT AUS

Travel agency and tour operator services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Taxi fares 4.0 2.7 3.8 0.9 1.1 0.8 0.4 0.3 14.0

Long distance passenger transportation 266.5 177.3 207.5 43.8 83.8 20.7 28.3 17.0 845.0

Motor vehicle hire and lease 25.6 14.5 17.4 6.1 9.6 2.2 2.8 1.7 80.0

Accommodation services 93.9 56.7 82.4 16.7 25.7 9.3 8.5 4.8 298.0

Takeaway and restaurant meals 236.8 148.3 203.2 47.7 70.2 23.7 14.2 12.0 756.0

Shopping (including gifts and souvenirs) 287.4 188.0 240.9 57.8 82.4 24.9 16.7 13.9 912.1

Local area passenger transportation 12.6 7.6 10.1 1.8 3.0 1.1 1.2 0.6 38.0

Repair and maintenance of motor vehicles

9.2 5.2 5.7 2.2 2.9 0.8 0.6 0.5 27.0

Fuel (petrol, diesel) 146.4 86.9 93.0 34.8 47.5 12.9 9.5 8.0 438.9

Food products 27.4 16.9 23.0 5.2 8.0 2.6 1.7 1.3 86.1

Alcoholic beverages and other beverages

101.9 63.0 86.4 19.8 30.0 9.8 6.2 5.1 322.1

Motor vehicles, caravans, boats, etc. 15.9 9.8 10.3 3.4 4.8 1.4 1.0 0.8 47.5

Recreational, cultural and sports services

61.3 39.1 59.4 8.1 13.6 6.2 6.3 3.1 197.0

Gambling and betting services 28.8 19.4 26.1 3.6 6.2 2.6 2.5 1.2 90.4

Education 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Actual and imputed rent on holiday houses

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other tourism goods and services 106.5 60.8 85.8 24.7 41.9 6.1 6.9 5.7 338.4

Total 1424.1 896.2 1155.2 276.7 430.6 124.9 106.8 75.9 4490.4


11

Table 9: Tourism GST, Revenues Distributed to States or Territories, 2003/04, $m


Total tourism GST, generated (1)

1424.1 896.2 1155.2 276.7 430.6 124.9 106.8 75.9 4490.4

Total tourism GST, received (2)

1305.4 942.0 883.7 426.2 426.2 188.4 228.8 89.7 4490.4

Balance on tourism GST (1-2)

118.8 -45.9 271.4 -149.5 4.4 -63.5 -122.0 -13.8 0.0

Note: The Balance of tourism GST (1-2) shows disparity between total GST generated and received where the nationally based redistribution formula is not related to the state or territory in which the tourism GST has been collected.

Table 10: Tourism Other Commodity Taxes (Including Subsidies), by State or Territory, 2003/04, $m



0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Taxi fares 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Long distance passenger transportation

-440.8 -130.2 -134.1 -27.9 -46.6 -9.7 -27.1 -9.6 -826.0

Motor vehicle hire and lease 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Accommodation services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Takeaway and restaurant meals

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Shopping (including gifts and souvenirs)

27.7 18.1 23.2 5.6 7.9 2.4 1.6 1.3 87.9

Local area passenger transportation

-91.1 -50.1 -17.2 -7.4 -5.4 -0.1 -0.1 -0.6 -172.0


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Fuel (petrol, diesel) 423.0 251.2 268.7 100.4 137.1 37.4 27.4 23.0 1268.1

Food products 2.2 1.4 1.8 0.4 0.6 0.2 0.1 0.1 6.9


141.0 87.2 119.6 27.4 41.5 13.5 8.5 7.1 445.9

Motor vehicles, caravans, boats, etc.

3.5 2.2 2.3 0.8 1.1 0.3 0.2 0.2 10.5


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gambling and betting services 69.0 46.5 62.7 8.7 14.9 6.1 5.9 2.9 216.6

Education 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other tourism goods and services

115.7 66.0 93.3 26.9 45.5 6.6 7.5 6.2 367.6

Total 250.2 292.1 420.3 134.9 196.6 56.8 24.1 30.6 1405.6


12

Table 11: Tourism Fuel, Alcohol, Gambling & Other Taxes & Subsidy, by State or Territory, 2003/04, $m


State taxes

Alcohol taxes 141.0 87.2 119.6 27.4 41.5 13.5 8.5 7.1 445.9

Gambling taxes 69.0 46.5 62.7 8.7 14.9 6.1 5.9 2.9 216.6

Subsidies -478.5 -164.6 -135.1 -31.9 -46.4 -8.6 -23.9 -9.0 -898.0

Total -268.5 -31.0 47.2 4.2 10.0 11.1 -9.5 1.0 -235.5

Federal taxes

Fuel taxes 423.0 251.2 268.7 100.4 137.1 37.4 27.4 23.0 1268.1

Other taxes 149.1 87.7 120.6 33.6 55.1 9.6 9.5 7.8 473.0

Subsidies -53.4 -15.8 -16.2 -3.4 -5.6 -1.2 -3.3 -1.2 -100.0

Total 518.7 323.1 373.1 130.7 186.6 45.8 33.5 29.7 1641.1

Total 250.2 292.1 420.3 134.9 196.6 56.8 24.1 30.6 1405.6

Note: State ‘subsidies’ refer to local area and long distance passenger transportation while federal subsidies refer only to long distance passenger transportation. Federal ‘other taxes’ are import tariffs imposed on Shopping (including gifts and souvenirs), Food products, Motor vehicles, caravans, boats, etc, and Other tourism goods and services.


13

Chapter 4

TOTAL TOURISM TAXES LEVIED AND RECEIVED BY STATES/TERRITORIES

Table 12: Tourism Taxes Levied and Received in NSW, 2003/04

Tourism GSP and Consumption $m

Tourism GSP 12240.9

Tourism consumption 24201.3

Taxes Levied on Tourism in NSW $m % of tourism GSP

% of tourism consumption

State taxes

State taxes on production 341.6 2.8 1.4

State taxes on products 210.0 1.7 0.9

State subsidies -478.5 -3.9 -2.0

Total 73.2 0.6 0.3

Federal taxes

Federal taxes on production 59.5 0.5 0.2

Federal taxes on products 572.1 4.7 2.4

Federal subsidies -53.4 -0.4 -0.2

Total 578.2 4.7 2.4

GST on Tourism 1424.1 11.6 5.9

Total Taxes Levied on Tourism 2075.5 17.0 8.6

Tax Revenues Received on Tourism in NSW $m % of tourism GSP


State taxes




Total 73.2 0.6 0.3

Federal taxes




Total -53.4 -0.4 -0.2

Distribution from GST raised on tourism nationally 1305.4 10.7 5.4

Total Tax Receipts on Tourism 1325.2 10.8 5.5


14

Table 13: Tourism Taxes Levied and Received in VIC, 2003/04


Tourism GSP 7278.6


Taxes Levied on Tourism in VIC $m % of tourism GSP


State taxes




Total 134.6 1.8 0.9

Federal taxes




Total 353.6 4.9 2.3



Tax Revenues Received on Tourism in VIC $m % of tourism GSP


State taxes




Total 134.6 1.8 0.9

Federal taxes




Total -15.8 -0.2 -0.1




15

Table 14: Tourism Taxes Levied and Received in QLD, 2003/04


Tourism GSP 8111.7


Taxes Levied on Tourism in QLD $m % of tourism GSP


State taxes




Total 251.4 3.1 1.3

Federal taxes




Total 407.2 5.0 2.1



Tax Revenues Received on Tourism in QLD $m % of tourism GSP


State taxes




Total 251.4 3.1 1.3

Federal taxes




Total -16.2 -0.2 -0.1




16

Table 15: Tourism Taxes Levied and Received in SA, 2003/04


Tourism GSP 2237.5


Taxes Levied on Tourism in SA $m % of tourism GSP


State taxes




Total 50.6 2.3 1.1

Federal taxes




Total 139.2 6.2 3.0


Total taxes Levied on Tourism 466.5 20.8 10.2

Tax Revenues Received on Tourism in SA $m % of tourism GSP


State taxes




Total 50.6 2.3 1.1

Federal taxes




Total -3.4 -0.2 -0.1




17

Table 16: Tourism Taxes Levied and Received in WA, 2003/04


Tourism GSP 3170.1


Taxes Levied on Tourism in WA $m % of tourism GSP


State taxes




Total 81.8 2.6 1.1

Federal taxes




Total 199.9 6.3 2.8



Tax Revenues Received on Tourism in WA $m % of tourism GSP


State taxes




Total 81.8 2.6 1.1

Federal taxes




Total -5.6 -0.2 -0.1




18

Table 17: Tourism Taxes Levied and Received in TAS, 2003/04


Tourism GSP 949.7


Taxes levied on tourism in TAS $m % of tourism GSP


State taxes




Total 28.8 3.0 1.3

Federal taxes




Total 49.5 5.2 2.3



Tax Revenues Received on Tourism in TAS $m % of tourism GSP


State taxes




Total 28.8 3.0 1.3

Federal taxes




Total -1.2 -0.1 -0.1


Total tax receipts on tourism 216.0 22.7 9.9


19

Table 18: Tourism Taxes Levied and Received in NT, 2003/04


Tourism GSP 740.6


Taxes levied on tourism in NT $m % of tourism GSP


State taxes




Total 0.2 0.0 0.0

Federal taxes




Total 37.5 5.1 2.1



Tax Revenues Received on Tourism in NT $m % of tourism GSP


State taxes




Total 0.2 0.0 0.0

Federal taxes




Total -3.3 -0.4 -0.2




20

Table 19: Tourism Taxes Levied and Received in ACT, 2003/04


Tourism GSP 532.7


Taxes Levied on Tourism in ACT $m % of tourism GSP


State taxes




Total 13.8 2.6 1.1

Federal taxes




Total 32.2 6.0 2.5



Tax Revenues Received on Tourism in ACT $m % of tourism GSP


State taxes




Total 13.8 2.6 1.1

Federal taxes




Total -1.2 -0.2 -0.1




21

Table 20: Tourism Taxes Levied and Received in Australia, 2003/04

Tourism GDP and Consumption $m

Tourism GDP 35262.0


Taxes Levied on Tourism in Australia $m % of tourism GDP


State taxes




Total 634.2 1.8 0.8

Federal taxes




Total 1797.4 5.1 2.4



Tax Revenues Received on Tourism in Australia $m % of tourism GDP


State taxes




Total 634.2 1.8 0.8

Federal taxes




Total -100.0 -0.3 -0.1




22

Table 21: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in NSW

$m

Change in tourism consumption 100.0

State government receipts

Change in state taxes 2.3

Change in state share of GST 1.7

Change in state subsidies -2.0

Total 2.0

Federal government receipts

Change in federal taxes 2.6

Change in federal subsidies -0.2

Total 2.4

Other state receipts

Change in receipts to states/territories other than NSW from distribution of GST revenues 4.2

Total Increase in Tourism Taxation 8.6

Table 22: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in VIC

$m






Total 2.1




Total 2.3


Change in receipts to states/territories other than VIC from distribution of GST revenues 4.6



23

Table 23: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in QLD

$m






Total 2.5




Total 2.1


Change in receipts to states/territories other than QLD from distribution of GST revenues 4.8


Table 24: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in SA

$m






Total 1.7




Total 3.0


Change in receipts to states/territories other than SA from distribution of GST revenues 5.5



24

Table 25: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in WA

$m






Total 1.7




Total 2.8


Change in receipts to states/territories other than WA from distribution of GST revenues 5.4

Total increase in tourism taxation 10.0

Table 26: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in TAS

$m






Total 1.6




Total 2.3


Change in receipts to states/territories other than TAS from distribution of GST revenues 5.5



25

Table 27: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in NT

$m






Total 0.3




Total 2.1


Change in receipts to states/territories other than NT from distribution of GST revenues 5.7


Table 28: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in ACT

$m






Total 1.2




Total 2.5


Change in receipts to states/territories other than ACT from distribution of GST revenues 5.8



26

Table 29: Direct Tax Receipts Impact of $100m Change in Tourism Expenditure in Australia

$m






Total 6.8




Total 2.4



27

APPENDIX A: CONCEPTS, SOURCES AND METHODS USED IN DEVELOPING TAXES ON TOURISM FOR THE AUSTRALIAN STATES AND TERRITORIES

Derivation of Taxes on Production This Appendix explains the derivation of tourism production taxes, which can be used as a template for all states and territories. For illustrative purposes we use South Australia tourism industry output and MMRF production tax rates to derive South Australia tourism production taxes. The basic framework is the Tourism Satellite Account developed for South Australia13. Tourism output, South Australia TSA Table A.1 is taken from South Australia TSA 2003/04 showing tourism output for South Australia. This table indicates total tourism output, which is composed of direct output and interstate trade. It should be noted that industry output includes production taxes. The next step is to estimate the production taxes from industry output using MMRF production tax rates.

Table A.1: South Australia, Tourism output, 2003/04, $m

Tourism characteristic industries Travel agency and tour operator services 133.5

Taxi transport 39.8

Air and water transport 371.4

Motor vehicle hiring 63.9

Accommodation 443.4

Cafes, restaurants and food outlets 500.8

Total tourism characteristic industries 1552.6

Tourism connected industries Clubs, pubs, taverns and bars 126.5

Other road transport 148.5

Rail transport 38.2

Food manufacturing 181.8

Beverage manufacturing 257.3

Transport equipment manufacturing 56.4

Other manufacturing 212.5

Retail trade 487.7

Casinos and other gambling services 12.5

Libraries, museums and arts 37.6

Other entertainment services 69.8

Education 74.0

Ownership of dwellings 154.3

Total tourism connected industries 1857.1 All other industries 491.5

Total 3901.3

13 STCRC 2007


28

Production tax rates using the MMRF database Table A.2 shows the production tax rate of the MMRF database14. MMRF recognises 6 different production taxes: Property tax, Fringe Benefits tax (FBT), Payroll tax, Agricultural-land tax, Other state production tax and Other federal production tax. Payroll tax, property tax, land tax, and other state production tax are state taxes on production. These are levied by, and accrue to, the state government. FBT and other federal production taxes are levied at the state level but accrue to the federal government. Payroll tax is levied on the annual payroll of employers. Property tax is levied in proportion to the rental cost of fixed capital. Other federal production taxes are largely comprised of statutory levies collected by the Commonwealth in relation to agriculture and business services.15

Table A.2: Production Tax Rates, South Australia, MMRF, %

Property Tax FBT Payroll Tax

Other Production

Tax, Federal 1 Agriculture animal 0.309 0.121 0.000 2.209

2 Agriculture other 0.339 0.173 0.000 2.273

3 Forestry 0.189 0.270 0.000 0.000

4 Fishing 0.321 0.175 0.567 0.000

5 Coal 0.537 0.002 0.024 0.000

6 Oil 1.183 0.014 0.056 0.000

7 Gas 0.263 0.000 0.168 0.000

8 Iron ore 0.991 0.045 0.173 0.000

9 Other metal ore 0.741 0.064 0.186 0.000

10 Other mining 0.739 0.065 0.210 0.000

11 Food animal 0.202 0.094 0.347 0.000

12 Food other 0.342 0.114 0.400 0.000

13 Drink 0.633 0.018 0.063 0.000

14 TCF 0.125 0.155 0.631 0.000

15 Wood products 0.408 0.171 0.581 0.000

16 Paper products 0.450 0.142 0.583 0.000

17 Manufacturing other 0.354 0.173 0.662 0.000

18 Petrol refinery 0.000 0.000 0.000 0.000

19 Chemical products 0.337 0.077 0.261 0.000

20 Plastic rubber products 0.304 0.154 0.731 0.000

21 Non metal mineral products 0.473 0.156 0.652 0.000

22 Cement 0.365 0.099 0.326 0.000

23 Iron steel 0.378 0.129 0.994 0.000

24 Aluminium 0.000 0.000 0.000 0.000

25 Metal products 0.330 0.139 0.414 0.000

26 Transport equipments 0.452 0.088 0.292 0.000

27 Other equipments 0.139 0.177 0.613 0.000

14 Adams 2006 15 Adams 2000


29

Property Tax FBT Payroll Tax

Other Production

Tax, Federal 36 Gas supply 1.063 0.116 0.442 0.000

37 Water supply 1.320 0.024 0.085 0.000

38 Construction 0.191 0.286 0.762 0.000

39 Trade 0.138 0.242 0.819 0.000

40 Hotels cafes 0.301 0.185 0.619 0.000

41 Road transport 0.285 0.239 0.138 0.000

42 Rail transport 0.285 0.283 0.539 0.000

43 Water transport 0.514 0.082 0.157 0.000

44 Air transport 0.247 0.243 0.141 0.000

45 Transport other 0.968 0.191 0.621 0.000

46 Communication 0.853 0.175 0.575 0.000

47 Finance services 8.500 0.218 0.742 0.000

48 Owner dwelling 11.067 0.000 0.000 0.000

49 Business services 0.451 0.304 1.219 0.304

50 Government administration defence 1.074 0.376 1.202 0.000

51 Education 0.842 0.625 1.999 0.000

52 Health 0.247 0.657 2.101 0.000

53 Government other 0.706 0.399 1.276 0.000

54 Services other 0.361 0.329 0.997 0.000

55 Private transport service 0.000 0.000 0.000 0.000

Note: The tourism production tax rate is the ratio of tourism production taxes to the cost of tourism output.

Mapping between TSA and MMRF industries Since the industry data sets provided by the TSA and MMRF are different, the two data sets must be mapped to apply the MMRF production tax rates to the SA TSA tourism output. We apply MMRF production tax rates to the following mapping as in Table A.3.

Table A.3: Mapping Between TSA and MMRF Industries

TSA Industries MMRF Industries Travel agency and tour operator services Road transport Taxi transport Road transport Air and water transport Water transport Air transport Motor vehicle hiring Business services Accommodation Hotels cafes Cafes, restaurants and food outlets Hotels cafes Clubs, pubs, taverns and bars Hotels cafes Other road transport Road transport Rail transport Rail transport Food manufacturing Food animal


30

TSA Industries MMRF Industries Food other Beverage manufacturing Drink Transport equipment manufacturing Transport equipments Other manufacturing Textile clothing footwear (TCF) Wood products Paper products Chemical products Non metal mineral products Retail trade Trade Casinos and other gambling services Services other Libraries, museums and arts Services other Other entertainment services Services other Education Education Ownership of dwellings Ownership dwelling All other industries

Since one industry in the TSA generally corresponds to several industries in the MMRF, it is necessary to disaggregate industry cost shares to derive production taxes as shown in the following example:

Tourism Payroll taxes of Air and Water Transport = {Total output of Air and Water transport * [Cost of Air transport / (Cost of Air Transport+ Cost of Water transport)] * Payroll tax rate of Air transport} + {Total output of Air and Water transport * [Cost of Water Transport / ( Cost of Air Transport + Cost of Water Transport)] * Payroll tax rate of Water Transport}

Air and Water Transport in the TSA data set is comprised of Air Transport and Water Transport in the MMRF data set. On the other hand, Retail Trade in the TSA set is mapped to Trade in the MMRF set where the latter is the more aggregated industry. Trade is composed by Retail Trade and Wholesale. However, the estimation problem is minimal as both industries have similar production tax rates. The disaggregation of All other industries in the TSA data set refers to Other tourism goods and services from Appendix 1: Tourism Product Concordance, ABS TSA 2003/04 which include, for example, Pharmaceutical products, Medical and dental services, Hospital services, Telecommunication services, Accident and health insurance services, and Administrative services of the government. Again, to derive the production tax rate for all other industries in the TSA set we use similar formulae to those applied in deriving Air and Water Transport production tax. For example, Chemical is mapped to Pharmaceutical, Communication to Telecommunication Service, and Government Defence Services to Administrative Services of the Government. To ease the comparison of production tax rates after the mapping, Table A.4 shows tourism payroll tax rates by states and by type of industry as a result of the mapping in the previous step. The same steps are applied to obtain tourism property taxes, FBT, and other federal production taxes.

Table A.4: Tourism Payroll Tax Rates by State and by Type of Industry, 2003/04, %

NSW VIC QLD SA WA TAS NT ACT

Tourism characteristic industries

Travel agency and tour operator services 1.306 0.985 0.760 0.819 0.951 0.866 0.622 0.559

Taxi transport 0.134 0.074 0.109 0.138 0.166 0.012 0.000 0.090

Air and water transport 0.128 0.077 0.100 0.142 0.151 0.068 0.083 0.083

Motor vehicle hiring 1.152 0.941 0.894 1.219 1.094 1.294 0.971 0.770


31

NSW VIC QLD SA WA TAS NT ACT

Accommodation 0.845 0.726 0.477 0.619 0.726 0.578 0.386 0.509

Cafes, restaurants and food outlets 0.845 0.726 0.477 0.619 0.726 0.578 0.386 0.509

Tourism connected industries

Clubs, pubs, taverns and bars 0.845 0.726 0.477 0.619 0.726 0.578 0.386 0.509

Other road transport 0.929 0.787 0.527 0.621 0.749 0.562 1.358 0.623

Rail transport 0.755 0.596 0.633 0.539 0.335 0.542 0.889 0.423

Food manufacturing 0.367 0.406 0.277 0.376 0.422 0.345 0.315 0.371

Beverage manufacturing 0.133 0.084 0.057 0.063 0.126 0.031 0.000 0.000

Transport equipment manufacturing 0.777 0.754 0.478 0.613 0.722 0.511 0.413 0.372

Other manufacturing 0.373 0.591 0.308 0.464 0.432 0.353 0.107 0.500

Retail trade 1.306 0.985 0.760 0.819 0.951 0.866 0.622 0.559

Casinos and other gambling services 1.379 1.007 0.795 0.997 1.048 1.059 1.421 0.706

Libraries, museums and arts 1.379 1.007 0.795 0.997 1.048 1.059 1.421 0.706

Other entertainment services 1.379 1.007 0.795 0.997 1.048 1.059 1.421 0.706

Education 2.714 2.076 1.556 1.999 2.136 1.864 1.524 2.057

Ownership of dwellings 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

All other industries 1.282 1.005 0.856 1.200 1.177 1.097 0.912 0.817

South Australia production taxes The derivation of tourism production taxes for South Australia is shown in Table A.5.

Table A.5: Tourism Production taxes, South Australia, 2003/04, $m

Tourism Industries Property taxes FBT Payroll

taxes

Other Federal

taxes Total

Tourism characteristic industries

Travel agency and tour operator services 0.0 0.1 0.3 0.0 0.4

Taxi transport 0.1 0.1 0.1 0.0 0.2

Air and water transport 1.6 1.3 0.8 0.0 3.8

Motor vehicle hiring 0.1 0.0 0.2 0.0 0.4

Accommodation 3.3 2.0 6.7 0.0 12.0

Cafes, restaurants and food outlets 0.4 0.3 0.9 0.0 1.6

Total tourism characteristic industries 5.6 3.8 9.0 0.0 18.4

Tourism connected industries

Clubs, pubs, taverns and bars 0.2 0.1 0.4 0.0 0.8

Other road transport 2.0 0.4 1.3 0.0 3.6

Rail transport 0.1 0.1 0.2 0.0 0.3

Food manufacturing 0.5 0.2 0.7 0.0 1.4


32

Tourism Industries Property taxes FBT Payroll

taxes

Other Federal

taxes Total

Beverage manufacturing 1.0 0.0 0.1 0.0 1.2

Transport equipment manufacturing 0.1 0.1 0.3 0.0 0.4

Other manufacturing 0.6 0.2 0.8 0.0 1.6

Retail trade 1.0 1.8 6.0 0.0 8.8

Casinos and other gambling services 0.0 0.0 0.0 0.0 0.1

Libraries, museums and arts 0.1 0.1 0.2 0.0 0.3

Other entertainment services 0.2 0.2 0.5 0.0 0.9

Education 0.3 0.2 0.7 0.0 1.2

Ownership of dwellings 9.7 0.0 0.0 0.0 9.7

Total tourism connected industries 15.7 3.3 11.1 0.0 30.1

All other industries 1.7 1.0 3.4 0.4 6.4

Total 22.9 8.1 23.5 0.4 54.9

Derivation of Taxes on Products Table A.6 is based on Table 8: Tourism Supply in ATSA 2003/0416 which decomposes tourism supply (purchaser’s prices). Tourism supply is split into tourism product output (basic prices), tourism margins, imports purchased in Australia by tourists, and net taxes on tourism products. Specific taxes such as those on gambling, fuel and alcoholic beverages are estimated from ABS data on these taxes, and state tourism shares of these taxes is assumed to be proportional to tourism’s share of total output. The GST on tourism is estimated as a residual. ATSA embodies estimates of local and long distance passenger transport obtained from the ABS. The difference between the sum of these taxes and subsidies and total taxes on products was assumed to be GST. ATSA embodies subsidies of $998m, allocated between local and long distance passenger transport. The former includes tourism’s share of subsidies to urban passenger transport. In allocating this subsidy between state and federal governments we have allocated $100m to the federal government and the remainder to state governments. This distribution is adapted from the exploratory estimates of assistance to tourism in passenger transport services and infrastructure referring from year 2000 to 200217 that the federal government subsidised between 6% and 7% of the total subsidy of passenger transport services and infrastructure.

16 Australian Bureau of Statistics 2007 17 Department of Communications, Information technology and the Arts 2004


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Table A.6: Tourism Supply, by Type of Product, $m

Imports GST Taxes Other tax Subsidy Total

Basic + Margin

Fuel Alcohol Gambling


2183 0 0 0 0 0 0 0 2183

Taxi fares 558 0 14 0 0 0 0 0 572

Long distance passenger transportation

12831 0 845 0 0 0 0 -826 12850

Motor vehicle hire and lease

915 8 80 0 0 0 0 0 1003

Accommodation services

7024 0 298 0 0 0 0 0 7322

Takeaway and restaurant meals

10506 0 756 0 0 0 0 0 11262


7932 3081 912 0 0 0 88 0 12013

Local area passenger transportation

577 0 38 0 0 0 0 -172 443


386 20 27 0 0 0 0 0 433

Fuel (petrol, diesel) 3002 119 439 1268 0 0 0 0 4828

Food products 5708 386 86 0 0 0 7 0 6187


2638 136 322 0 446 0 0 0 3542

Motor vehicles, caravans, boats, etc.

789 350 47 0 0 0 11 0 1197


2582 3 197 0 0 0 0 0 2782

Gambling and betting services

689 0 90 0 0 217 0 0 996

Education 2307 67 0 0 0 0 0 0 2374


2091 0 0 0 0 0 0 0 2091

Other tourism goods and services

2924 91 338 0 0 0 368 0 3721

Total 65642 4261 4490 1268 446 217 473 -998 75799 Tourism’s share of total output by state is used to distribute national taxes on products. Other taxes include duties on Shopping (including gifts and souvenirs), Food products, and Motor vehicle, caravan, boats, etc. Taxes on products in Table A.6 are distributed by state according to the share of consumption by states. Using South Australia taxes on products as an example, we obtain taxes on product of South Australia as in Table A.7.


34

Table A.7: Taxes on Products, South Australia, $m

GST Taxes Other taxes Subsidy Total

Fuel Alcohol Gambling


0 0 0 0 0 0 0

Taxi fares 0.9 0 0 0 0 0 0.9

Long distance passenger transportation 43.8 0 0 0 0 -27.9 16

Motor vehicle hire and lease 6.1 0 0 0 0 0 6.1

Accommodation services 16.7 0 0 0 0 0 16.7

Takeaway and restaurant meals 47.7 0 0 0 0 0 47.7


57.8 0 0 0 5.6 0 63.4

Local area passenger transportation 1.8 0 0 0 0 -7.4 -5.6


2.2 0 0 0 0 0 2.2

Fuel (petrol, diesel) 34.8 100 0 0 0 0 135.2

Food products 5.2 0 0 0 0.4 0 5.7


19.8 0 27.4 0 0 0 47.2

Motor vehicles, caravans, boats, etc. 3.4 0 0 0 0.8 0 4.2


8.1 0 0 0 0 0 8.1

Gambling and betting services 3.6 0 0 8.7 0 0 12.4

Education 0 0 0 0 0 0 0


0 0 0 0 0 0 0

Other tourism goods and services 24.7 0 0 0 26.9 0 51.6

Total 277 100 27.4 8.7 33.6 -35.3 411.6

Because GST revenues are redistributed back to the states and territories by the federal government on the basis of a nationally based redistribution formula, which is not related to tourism GST collected in the state or territory concerned, separate formulae have been used to calculate the state/territory revenue outcomes from GST redistribution. This is based on the Final Budget Outcome formula. The tourism GST distribution in this report is based upon the share of distribution of total GST revenue as in Table A.8. South Australia for example receives 9.5% of total GST and is therefore assumed to receive 9.5% of national tourism GST revenue.

Table A.8: GST Revenue Provision to the States and Territories, Final Budget Outcome 2003/04


Distribution of GST revenue, $m

9667.1 6961.0 6552.8 3146.4 3157.9 1394.5 1680.9 658.1 33218.7

Share (%) 29.1 21.0 19.7 9.5 9.5 4.2 5.1 2.0 100.0


35

APPENDIX B: DEFINITIONS OF SELECTED TERMS USED IN THIS REPORT*

Tourism Output

Tourism output is measured at ‘basic prices’, that is before any taxes on tourism product are added (or any subsidies on tourism products are deducted). Output consists of those goods and services that are produced within an establishment that become available for use outside that establishment, plus any goods and services produced for own final use.

Tourism Consumption

Tourism consumption measures the total consumption made by a visitor or on behalf of a visitor for and during his/her trip and stay at the destination at ‘purchasers’ price’. Consumption consists of output (including production taxes), imports, margins, and net taxes on tourism products.

Tourism Gross Value Added (TGVA)

Tourism GVA measures the value of tourism gross output at basic prices by all industries which supply tourism products, less the value of the inputs used in producing these tourism products. TGVA is directly comparable with the value added of 'conventional' industries such as mining and manufacturing and should also be used for comparisons across countries or regions.

Tourism Gross Domestic Product (TGDP) or Tourism Gross State Product (TGSP)

Tourism GDP is TGVA plus taxes paid less subsidies received on tourism related products as these are reflected in prices that visitors actually pay. Taxes on tourism products include the Goods and Services Tax (GST), wholesale taxes and excise duties on goods supplied to visitors. TGDP and TGSP will generally have a higher value than tourism value added. TGDP and TGSP are a satellite account construct to enable a direct comparison with the most widely recognised national accounting aggregates, GDP at the national level, and GSP at the state or territory level. While it can be useful in this context, TGVA is normally used when making comparisons with other industries or between countries or regions. * These definitions are based on the Explanatory Notes to ABS TSA, Australian National Account, 5249.0, 2005/06, with adjustment where necessary to reflect the state/territory focus of this report.


36

REFERENCES Adams, P.D. (2006). MMRF Database 2003-2004, Centre of Policy Studies, Monash University, Australia. Adams, P.D., J.M. Horridge and B.R. Parmenter (2000). ‘MMRF-GREEN: Dynamic, Multi-Sectoral, Multi-

Regional Model of Australia’, Preliminary Working Paper No. OP-94, Centre of Policy Studies, Monash University, Melbourne, available at http://www.monash.edu.au/policy/ftp/workpapr/op-94.pdf accessed 20/09/07.

Australian Bureau of Statistics (2007). Tourism Satellite Account, Australian National Accounts 1997-98 to 2005/06, (Cat. No. 5249.0), Canberra, www.abs.gov.au.

Department of Communications, Information Technology and the Arts (2004). Final Budget Outcome 2003/04, Canberra, www.budget.gov.au.

Productivity Commission (2005). Assistance to Tourism: Exploratory Estimates, Commission Research Paper, Canberra, April.

Sustainable Tourism Cooperative Research Centre (2007). Tourism Satellite Account Victoria 2003/04 (October 2007) (and related reports for other states and territories), Gold Coast, Queensland.


37

LIST OF ABBREVIATIONS ABS Australian Bureau of Statistics

ACT Australian Capital Territory

ANZSIC Australian and New Zealand Standard Industrial Classification

ATSA Australian Tourism Satellite Account

AUS Australia

CoPS Centre of Policy Studies, Monash University

CTEPR STCRC Centre for Tourism Economics and Policy Research

FBT Fringe Benefits Tax

GDP Gross Domestic Product

GSP Gross State Product

GST Goods and Services Tax

GVA Gross Value Added

NSW New South Wales

NT Northern Territory

QLD Queensland

SA South Australia

STCRC Sustainable Tourism Cooperative Research Centre

TAS Tasmania

TCF Textile Clothing Footwear

TSA Tourism Satellite Account

TGDP Tourism Gross Domestic Product

TGSP Tourism Gross State Product

TGVA Tourism Gross Value Added

TSA Tourism Satellite Account

VIC Victoria

WA Western Australia

CRC for Sustainable Tourism Pty Ltd ABN 53 077 407 286

Gold Coast Campus Griffith University QLD 4222 Australia

Telephone: +61 7 5552 8172 Facsimile: +61 7 5552 8171

Website: www.crctourism.com.au

Bookshop: www.crctourism.com.au/bookshop

Email: [email protected]

*11

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