Commonwealth Grants Commission
Report on GST Revenue Sharing Relativities—2013 Update Report
Supporting information
STATE OF THE STATES
OVERVIEW OF STATE BUDGETS
1
Figure 1 indicates the fiscal position of the States1 as a whole in 2011−12 has changed little
since 2010−11. The aggregate operating balance remained in surplus, declining $655 million
to $1.4 billion, because of small increases in the operating deficit of Queensland, South
Australia and Tasmania. Net investment in State infrastructure fell by $2.8 billion from
2010−11 to $14.7 billion.
2
Total net borrowing fell in 2011−12 because the drop in investment exceeded the increase in
net operating expenses.
Figure 1
Source:
Budget aggregates, 2000−01 to 2011−12
ABS Government Finance Statistics and State provided data.
3
Growth in aggregate State operating revenue and operating expenses has risen following a
noticeable slowdown in 2010−11. State operating revenue grew by 5.3%, compared with
3.0% in 2010−11. Growth in State operating expenses was 5.6%, again above the 2010−11
growth of 3.7%.
1
Includes the Australian Capital Territory and the Northern Territory.
1
4
Growth in State royalty revenue of 4.6% was considerably lower than the 50.2% growth in
2010−11. However, other State own-source revenue and revenue from the Commonwealth
(including GST revenue) both grew slightly faster in 2011−12 than the previous year.2
Figure 2
Note:
Source:
5
2
Average annual growth in State revenue by source, 2002−03 to 2011−12
Other Commonwealth payments include specific purpose, national partnership and national
competition payments.
ABS Government Finance Statistics and State provided data.
Figure 2 compares revenue growth in 2011−12 with the average annual growth over the
previous ten years. It highlights:

The rapid fall in the growth of mining royalties in 2011−12. Royalty revenue grew by
4.6% in 2011−12, which was more than 4 times less than the 23.7% average annual
growth over the years 2006−07 to 2010−11. Despite this fall, the importance of mining
royalties as a source of State revenue grew — they were 8% of total State revenue in
2011−12, compared with an average of 6.4% over the years 2006−07 to 2010−11.

The slowdown in the growth of GST revenue available to States in 2011−12. GST
revenue grew by only 0.3% in 2011−12, which was much lower than the 3.8% average
annual growth over the years 2006−07 to 2010−11. This is due mainly to weaker
consumption and dwelling investment in the aftermath of the global financial crisis.
State own-source revenue (excluding royalties) grew 8.9% in 2011−12 compared with 7% in 2010−11
while royalty revenue growth slowed to 4.6% from 50.2% in 2010−11. Total revenue from the
Commonwealth (including GST revenue) grew by 1.74% in 2011−12, after growing by 19% and falling
by 3.4% in 2009−10 and 2010−11 respectively.
2

6
The slowdown in the growth of Commonwealth payments to States. Commonwealth
payments grew by only 3.0% in 2011−12. This was much lower than the 14.4% average
annual increase in 2006−07 to 2010−11 (which was driven by the 27.4% and 30.5%
increases in 2008−09 and 2009−10 respectively).
Data for individual States indicate mining revenue grew rapidly from 2009−10 to 2010−11
and the vast bulk of that growth was in Western Australia. Western Australia’s royalties per
capita rose by 60.3% (or $844 per capita) in 2010−11 compared with 31.7% (or
$146 per capita) in Queensland and 21.0% (or $20 per capita) in all other States. Growth
slowed markedly in 2011−12, but per capita revenue in Western Australia remain much
higher than those in other States (see Figure 3). Western Australia collected $2 235 per capita
in mining royalties3, over 3 times more than Queensland ($613 per capita) and 18 times more
than the other 6 States collectively ($122 per capita).
Figure 3
Own-source revenue per capita, 2006−07 to 2011−12
Total own-source revenue
7 000
Mining revenue
2 500
6 000
2 000
5 000
1 500
$pc
$pc
4 000
3 000
1 000
2 000
500
1 000
0
0
2006-07
2007-08
2008-09
2009-10
2010-11
Payroll tax revenue
1 400
2006-07
2011-12
1 200
1 200
2008-09
2009-10
2010-11
2011-12
Stamp duty on conveyances revenue
1 000
1 000
800
$pc
$pc
2007-08
800
600
600
400
400
200
200
0
0
2006-07
Source:
2007-08
2008-09
2009-10
2010-11
2011-12
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
ABS Government Finance Statistics and State provided data.
7
Figure 3 also indicates the growth in mining royalties carried through to total own-source
revenue, particularly in Western Australia. Western Australia’s total own-source revenue per
capita was above the average of the other States in each of the last six years. The slowdown
in the growth of mining revenue in 2011−12 reduced the disparity between Western
Australia and Queensland (the State that generally has the second highest revenue).
3
This includes payments received from the Commonwealth in lieu of royalties on offshore production.
3
8
The strength of Western Australia’s mining industry has spread to some other parts of its
economy. Its payroll tax revenue per capita is above that of Queensland and the other six
States and growing more rapidly.
9
The property market, however, had a moderating effect on Western Australia’s revenue
growth. Its per capita revenue from conveyances was about 50% higher than Queensland’s
and the average of the other six States in 2007−08, but it collapsed to around average levels
in 2008−09. In 2011−12, Western Australia’s revenue grew faster than all other States and is
again slightly above that in all other States.
10
Queensland, the other State widely considered to have benefitted from the mining boom,
has had a somewhat different experience. Its per capita own-source revenue grew noticeably
in 2008−09, primarily because large increases in the value of coal production produced a big
increase in royalty revenue and its interest earnings recovered after a big fall in 2007−08.4
Those events more than offset the 2008−09 fall in its conveyance revenue. Queensland’s
total own−source revenue per capita fell in 2009−10 because of falls in its mining and payroll
tax revenues. Its total per capita own−source revenue grew by 9.0% in 2010−11, but the
growth in mining and conveyance revenues was constrained by the natural disasters of early
2011. Queensland’s total own-source revenue continued to grow in 2011−12 (up 15.9%) due
primarily to growth in payroll tax revenues.
11
Western Australia’s total revenue per capita has exceeded Queensland’s and the average of
the other six States in every year since 2005−06 (see Figure 4). It was $417 per capita above
Queensland and $1 575 (or 18%) above the average of the other six States in 2011−12. This
situation has persisted even though increases in Western Australia’s capacity to raise its
own-source revenue have reduced its GST revenue every year since 2007−08.
12
Figure 5 shows per capita expenses in the large, sparsely settled but fast growing States of
Queensland and Western Australia have been about 13% above the average of the other six
States since 2006−07. Per capita operating expenses in Queensland and the other six States in
2011−12 were only slightly higher than those in 2010−11. However, they increased by over
$781 (or 8.2%) in Western Australia, due to well above average increases in spending on
hospitals, health services and housing and welfare services.
4
Queensland’s interest earnings fell by $3.6 billion in 2007−08.
4
Figure 4
Note:
Source:
Figure 5
Source:
Total operating revenue, per capita 2006−07 to 2011−12
Includes all own-source revenue, GST revenue and other Commonwealth payments.
ABS Government Finance Statistics and State provided data.
Total operating expenses per capita, 2006−07 to 2011−12
ABS Government Finance Statistics and State provided data.
5
13
Growth in State investment is summarised in Figure 6. Investment per capita increased
rapidly in all States up to 2009−10. Queensland’s investment per capita exceeded that in
Western Australia and the gap widened each year up to 2009−10.5 However, Queensland’s
investment has been falling since 2009−10, while Western Australia’s rose in 2011−12.
Average per capita investment in the other six States was below that in Queensland and
Western Australia, and increased more slowly up to 2009−10.6 The higher investment in
Queensland and Western Australia, in part, reflects their above average population growth.
14
The increases in State investment in 2008−09 and the even larger increases in 2009−10 arose
because the States began spending funds paid to them by the Commonwealth under its
Building the Education Revolution, Nation Building – Roads, Rail and Social Housing programs.
The total amounts paid to the States under those 3 programs were $16.3 billion in 2009−10,
$8.3 billion in 2010−11 and $4.6 billion in 2011−12. In 2011−12 Commonwealth funds for
infrastructure fell leading to reduced investment spending in all States except Western
Australia and the ACT. These States are now funding a greater proportion of Investment from
their own sources.
15
Figure 7 shows Queensland became a substantial net borrower in 2007−08 as a result of a fall
in its operating revenues and a substantial increase in its investment spending. Western
Australia and the other six States (on average) moved to that position a year later.
Queensland’s strong own-source revenue growth in 2011−12 and a small reduction in its
investment allowed it to reduce its net borrowing in that year. For Western Australia, the
large increase in investment, primarily directed to the development of ports, schools and
roads has resulted in increased net borrowing in 2011−12 despite the slight increase in its
own-source revenue.
5
Queensland’s per capita investment in 2009−10 was 4.8 times the 2005−06 level. Western Australia’s
2009−10 per capita investment was 4.1 times the 2005−06 level.
The average growth for the other six States was affected by the relatively slow growth in New South
Wales and Victoria. Their 2009−10 investment per capita was about 1.9 times their 2006-07 figures.
Investment per capita in South Australia, Tasmania, the ACT and the Northern Territory in 2009−10 was
over 8 times the 2006-05 level, although that high growth was off a low base.
6
6
Figure 6
Source:
State investment per capita, 2006−07 to 2011−12
ABS Government Finance Statistics and State provided data.
Figure 7
State net lending per capita, 2006−07 to 2011−12
1 000
500
$pc
0
- 500
-1 000
-1 500
-2 000
2006-07
2007-08
2008-09
Qld
Source:
WA
2009-10
2010-11
2011-12
All Other States
ABS Government Finance Statistics and State provided data.
7
STATE CIRCUMSTANCES AND THE GST DISTRIBUTION
16
The GST distribution recommended by the commission reflects differences in State
demographic, economic and physical circumstances. Consequently, the year to year changes
in the GST distribution reflect changes in those circumstances. The changes in the GST
distribution in recent years, shown in Figure 8, were driven by:

the large changes in the revenue bases for mining royalties and stamp duty on
conveyances, which underlie the changes in those revenues noted in Figure 3

changes in the interstate distribution of Commonwealth SPPs and NPPs to the States.
Figure 8
Assessed GST requirements per capita, difference from the average
2 000
Difference from average ($pc)
1 500
1 000
500
0
- 500
-1 000
-1 500
-2 000
2006-07
NSW
Note:
Source:
17
2007-08
Vic
2008-09
Qld
2009-10
WA
2010-11
2011-12
All Other States
The assessed GST requirements are the amounts each State would have required to equalise its
fiscal capacity in that year, based on data for that year only. The assessed GST requirements differ
from the GST revenue actually received in each year.
Commission calculation.
Figure 9 shows the difference between the per capita mining royalties States would collect if
they applied the average rate (called assessed revenue) and the average per capita
collections. That difference has increased in recent years, especially for Western Australia.
The changes in 2011−12 are the primary reason for the changes in the GST distribution
recommended by the commission in the 2013 Update. Their effects on the GST distribution
were partially offset by the convergence towards the average in the revenue States would
collect if property conveyances were taxed at the average rate, as shown in Figure 10.
8
Figure 9
Assessed mining royalties per capita, difference from the average
2 500
Difference from average ($pc)
2 000
1 500
1 000
500
0
- 500
-1 000
2006-07
2007-08
NSW
Source:
2008-09
Vic
2009-10
Qld
WA
2010-11
2011-12
All Other States
Commission calculation.
Figure 10
Assessed stamp duties on conveyances, difference from the average
400
Difference from average ($pc)
300
200
100
0
-100
-200
2006-07
2007-08
NSW
Source:
Vic
2008-09
Qld
2009-10
WA
2010-11
2011-12
All Other States
Commission calculation.
9
18
For some States, such as South Australia, the increase in the Commonwealth SPPs and NPPs
received in 2011−12, shown in Figure 11, had a significant effect on the GST distribution
recommended for them in the 2013 Update.
Figure 11
Commonwealth SPPs and NPPs per capita, difference from the average
4 500
Difference from average ($pc)
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
- 500
-1 000
2006-07
NSW
Source:
2007-08
Vic
Qld
2008-09
2009-10
WA
SA
2010-11
Tas
2011-12
ACT
NT
ABS Government Finance Statistics.
FINANCIAL, DEMOGRAPHIC AND ECONOMIC INDICATORS FOR EACH STATE
19
The following presents information for each State.
NEW SOUTH WALES
20
Between 2007−08 and 2011−12, New South Wales experienced below average economic
growth (as measured by growth in Gross State Product (GSP)). It also had below average
annual revenue and expense growth over those years. Its GST share has grown faster than
average, partly because of the below average growth in its revenue bases.
21
Table 1 shows that the State’s investment was below average in the five years to June 2012.
This was because of below average growth each year except for 2010−11. It has had
deteriorating net lending and net debt positions on average since 2007−08. However, its net
lending position improved in 2011−12 because of reduced investment.
22
New South Wales has been a net borrower in every year because of the size of its investment
program (the 2008−09 operating deficit also contributed in that year). This increased its net
debt in each year up to 2009−10. While net debt fell in 2010−11, due to an increase in cash
10
holdings following the sale of certain electricity undertakings, it rose considerably in
2011−12. This was caused by large revaluations of superannuation assets.
Table 1
Financial indicators, New South Wales
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
NSW
%
Aust
%
Expense
48 902
53 530
58 897
59 177
61 890
6.1
7.4
Revenue
26 883
27 874
29 637
31 834
32 990
5.3
7.2
GST
11 916
11 844
13 330
14 158
14 232
4.5
2.1
SPPs/NPPs
10 487
13 382
16 994
14 522
15 348
10.0
11.6
384
-430
1 065
1 337
680
Investment
1 931
2 378
3 672
4 250
2 704
8.8
15.3
Net lending
-1 547
-2 808
-2 607
-2 913
-2 024
Net operating balance
Net debt
4 432
8 022
9 225
7 766
14 127
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Drivers of expenses
23
The average annual growth in New South Wales State Government expenses was below the
national average. This partly reflected below average growth in spending on health,
education, welfare, justice and transport services.
24
Table 2 shows the average annual growth rates for New South Wales for several demographic
indicators and public sector average weekly earnings for the period 2007−08 to 2011−12. Its
population growth was below the average. New South Wales, along with Victoria and
Tasmania, were the only States whose population in remote areas, where the per capita costs
of delivering services are generally higher, fell in each year.
25
Other things being equal, the below average population growth would result in below
average growth in demand for government services, which partly explains its below average
growth in expenses and investment. The below average growth in wages also contributes to
that outcome.
11
Table 2
Demographic and expense indicators, New South Wales
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
NSW
%
Aust
%
6 864 255
6 983 452
7 085 785
7 168 883
7 247 669
1.4
1.8
Population 5 to 14
880 365
880 303
881 726
887 086
887 086
0.3
0.5
Population 65 and above
953 452
980 715
1 011 707
1 044 323
1 044 323
3.1
3.2
Indigenous population
205 359
206 594
207 572
208 364
208 364
0.5
1.2
3 897 214
3 971 616
4 040 397
4 087 551
4 087 551
1.6
1.7
79 644
79 233
78 723
78 092
78 092
-0.7
1.5
Population
Population in capital cities
Population in remote areas
Public sector AWE ($)
1 081
1 111
1 170
1 216
1 226
3.2
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
26
The average annual growth in own-source revenue in New South Wales from 2007−08 to
2011−12 was below the national average, reflecting its lower economic growth. This included
a below average annual growth in compensation of employees and people employed.
27
The average annual growth in the value of mining production in New South Wales was below
the national average rate, principally due to the fall in coal prices in 2009−10 and below
average growth each year since then.
28
The performance of the real estate market in New South Wales has been mixed. Annual
growth in the total value of market activity was above average in each of the last four years.
However, growth in median house prices has been below average in four of the last five
years.
29
New vehicle sales grew at an above average rate because of above average growth each year
since 2008−09.
12
Table 3
Economic indicators, New South Wales
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
NSW
%
Aust
%
Gross State Product ($m)
374 816
391 662
409 199
435 547
455 275
5.0
5.8
Comp'n of employees ($m)
195 090
196 896
203 720
216 542
230 026
4.2
5.4
3 457
3 456
3 501
3 575
3 607
1.1
1.4
Med'n house prices ($000)
540
468
595
620
527
-0.6
1.4
Value of conveyances ($m)
104 899
85 593
107 419
106 667
102 832
-0.5
-4.7
Mining value of prod'n ($m)
13 811
22 457
16 442
20 007
21 688
11.9
14.9
Capital expenditure ($m)
86 570
87 120
91 634
94 614
94 385
2.2
5.0
Total employed persons ('000)
Sales of new vehicles ('000)
324
281
309
311
329
0.4
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
VICTORIA
30
Between 2007−08 and 2011−12, Victoria experienced below average annual economic
growth (as measured by growth in total GSP). It had just below average annual growth in
expenses over those years and below average growth in own-source revenue. Its GST share
has grown faster than average.
31
Budget developments over recent years in Victoria are shown in Table 4. It achieved a net
operating surplus in each of the last five years—only Victoria, Western Australia and the
Northern Territory had this outcome. The surplus fell considerably in 2008−09, but has
improved somewhat since 2009−10. High levels of investment in the last three years
increased the State’s net borrowing and net debt.
Drivers of expenses
32
The average annual growth in Victorian Government expenses was just below average — it
was below average in all years except in 2009−10 when it was the highest of all States. The
large increases in investment were aimed at stimulating the economy and increasing health,
education and transport infrastructure.
33
Table 5 shows that the average annual growth in Victoria’s total population was about the
same as the national average. However, its population aged 65 years and over and
Indigenous population grew at below average rates, and its population in remote areas
declined. Its capital city population and population aged 5 to 14 years grew at about average
rates. Growth in public sector average weekly earnings was above the national average.
13
Table 4
Financial indicators, Victoria
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
Vic
%
Aust
%
Expense
35 858
39 023
43 935
45 510
47 311
7.2
7.4
Revenue
20 240
20 571
21 991
23 735
25 411
5.9
7.2
GST
9 249
9 315
10 047
10 736
10 341
2.8
2.1
SPPs/NPPs
7 853
9 397
12 548
11 556
12 130
11.5
11.6
Net operating balance
1 484
260
651
517
571
Investment
998
1 857
3 144
2 822
2 282
23.0
15.3
Net lending
486
-1 597
-2 493
-2 305
-1 710
Net debt
2 182
5 331
7 932
11 885
15 237
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Table 5
Demographic and expense indicators, Victoria
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
Vic
%
Aust
%
5 182 076
5 299 204
5 409 157
5 490 010
5 574 455
1.8
1.8
Population 5 to 14
647 877
650 186
651 551
657 937
657 937
0.5
0.5
Population 65 and above
708 692
729 013
751 435
774 919
774 919
3.0
3.2
46 164
46 711
47 039
47 327
47 327
0.8
1.2
3 619 669
3 701 551
3 762 468
3 802 341
3 802 341
1.7
1.7
5 430
5 421
5 374
5 296
5 296
-0.8
1.5
Population
Indigenous population
Population in capital cities
Population in remote areas
Public sector AWE ($)
959
1 032
1 073
1 099
1 151
4.7
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
34
Over the five years, the average annual growth in Victoria’s own-source revenue was below
average. That outcome arose despite the above average performance of its real estate
market. Property transfers grew at above average rates until 2011–12 when Victoria
experienced an above average fall. The growth in the value of property transfers reflects a
14
combination of high turnover overall and above average annual growth in the median price
of houses, which was the second highest growth of all States.
35
Over the years 2007−08 to 2011−12, average annual growth in compensation of employees in
Victoria was below the national average, despite growth in the number of people employed
being above the average. Victoria’s average annual growth in the value of mining production
was well below the average, but growth in 2011−12 was above average. Growth in new car
sales was above average, especially in 2007−08 and 2009−10.
Table 6
Economic indicators, Victoria
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
Vic
%
Aust
%
Gross State Product ($m)
275 631
282 945
297 399
315 571
328 595
4.5
5.8
Comp'n of employees ($m)
137 093
139 145
144 696
155 057
164 424
4.6
5.4
2 694
2 700
2 788
2 867
2 888
1.8
1.4
Med'n house prices ($000)
410
385
478
520
487
4.4
1.4
Value of conveyances ($m)
80 285
64 122
81 516
87 164
76 544
-1.2
-4.7
Mining value of prod'n ($m)
7 547
6 074
5 115
5 580
8 137
1.9
14.9
73 941
76 065
80 141
84 111
83 695
3.1
5.0
Total employed persons ('000)
Capital expenditure ($m)
Sales of new vehicles ('000)
277
243
272
269
280
0.3
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
QUEENSLAND
36
Over the period 2007−08 to 2011−12, the average annual growth in Queensland’s economy
(measured by growth in GSP) was below the national average, primarily due to a 2.5% fall in
GSP in 2009−10. While GSP growth rates slowed in all States in 2009−10, Queensland and the
Northern Territory were the only States for which GSP actually declined. Queensland’s GSP
grew in 2011−12 at a slightly above average rate.
37
Table 7 shows how Queensland’s budget has performed over the last five years. It has
borrowed heavily in that time reflecting growth in expenses (the second highest of all States)
and high levels of investment in health, transport, energy and water infrastructure to support
its above average population growth. This has reduced its negative net debt (that is, reduced
its net holdings of cash and financial investments). However, it still had -$1 296 net debt per
capita in 2011−12, well above the national average net debt of $1 305 per capita.
Queensland’s negative net debt arises mainly because funds held for long-term liabilities
(such as employee superannuation) are recorded in the general government sector. Tasmania
15
and the ACT have similar policies, but the other 5 States record similar funds in the public
financial enterprises sector.
38
Queensland’s own-source revenue grew at well above the average annual rate. This was
because of its strong mining industry and the flow on effects to other sectors.
Table 7
Financial indicators, Queensland
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
Qld
%
Aust
%
Expense
32 980
36 966
39 778
43 473
46 027
8.7
7.4
Revenue
16 390
20 017
20 045
22 218
26 207
12.4
7.2
GST
8 549
7 972
8 152
8 494
8 592
0.1
2.1
SPPs/NPPs
6 491
9 019
11 532
11 245
10 995
14.1
11.6
-1 549
42
-49
-1 516
-233
Investment
3 667
4 434
6 522
5 606
5 475
10.5
15.3
Net lending
-5 216
-4 392
-6 571
-7 122
-5 708
Net operating balance
Net debt
-22 598
-19 285
-13 347
-9 055
-5 851
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Drivers of expenses
39
Queensland’s average annual growth in expenses was above the average. Its capital
expenditure increased by 19.1% from 2010−11 to 2011−12. Rising demand for services,
arising from its high population growth and the composition of the population placed
pressure on its budget. This was reflected in above average growth in spending on education,
health, transport and welfare.
40
Table 8 shows Queensland’s average annual population growth exceeded the average — it
was second only to Western Australia. Queensland also has well above average growth in the
school age cohort. Further, its population is ageing in that the share of its population aged 65
and over increased to more than the national average share from 2007−08 to 2011−12.
16
Table 8
Demographic and expense indicators, Queensland
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
Qld
%
Aust
%
4 140 859
4 262 278
4 360 274
4 434 060
4 513 009
2.2
1.8
Population 5 to 14
563 187
570 184
575 192
583 269
583 269
1.2
0.5
Population 65 and above
513 907
533 152
555 021
577 785
577 785
4.0
3.2
Indigenous population
180 962
184 454
186 875
188 892
188 892
1.4
1.2
1 828 984
1 877 568
1 913 641
1 941 633
1 941 633
2.0
1.7
139 587
141 376
142 969
144 647
144 647
1.2
1.5
Population
Population in capital cities
Population in remote areas
Public sector AWE ($)
1 061
1 106
1 165
1 212
1 225
3.7
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
41
The average annual growth in Queensland’s own-source revenue was well above the national
average. Its revenue has grown steadily each year from 2007−08 to 2011−12 and its average
annual growth was the highest of all States.
42
Queensland’s mining industry is the second largest in the country. It accounted for about
32.5% of the national value of production in 2008−09 due to a very large increase in coal
prices in that year. However, large price falls in 2009−10 reduced its share of national
production to 24.0%. In 2010−11, its value of production rose 19.3% because price rises more
than offset the decline in production caused by natural disasters. Despite that increase, much
larger increases in the value of production in Western Australia reduced Queensland’s share
of national production to 21.8%. In 2011–12, growth in the value of production slowed
dramatically to 1.9%, due to falling prices and slightly lower coal production.
43
Queensland’s real estate market peaked in 2007−08 but fell heavily in 2008−09 due to the
global financial crisis and continued to fall until 2010−11. The real estate market fell in all
States, except the Northern Territory, in 2008–09 but Queensland’s fell by 27.1% — the
second largest fall of all States. In 2011–12, Queensland’s property market grew for the first
year since 2007–08. Western Australia was the only other State to record growth in 2011−12.
17
Table 9
Economic indicators, Queensland
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
Qld
%
Aust
%
Gross State Product ($m)
230 927
258 746
252 398
269 880
283 604
5.3
5.8
Comp'n of employees ($m)
111 160
117 272
119 828
127 817
136 402
5.2
5.4
2 227
2 251
2 295
2 323
2 337
1.2
1.4
Med'n house prices ($000)
415
399
455
460
433
1.0
1.4
Value of conveyances ($m)
95 070
69 263
66 212
54 441
55 823
-12.5
-4.7
Mining value of prod'n ($m)
28 693
50 787
31 456
37 523
38 217
7.4
14.9
Capital expenditure ($m)
81 338
85 298
78 332
81 774
97 397
4.6
5.0
Total employed persons ('000)
Sales of new vehicles ('000)
234
194
211
203
224
-1.0
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
WESTERN AUSTRALIA
44
Western Australia’s mining industry has grown strongly due to growing export demand and
prices. This has supported strong growth in the economy, business investment and
population.
45
Since 2007−08, Western Australia’s average annual economic growth of 11.4% (as measured
by growth in GSP) was the highest of all States. (The next highest was the ACT with average
GSP growth of 7.2%.) Its growth slowed in 2009−10 but in 2010−11 it grew by more than
3 times the rates in the other States and it continues to have the highest rate in 2011–12.
46
Table 10 shows how Western Australia’s budget has developed over recent years. Its
own-source revenue has grown strongly, driven by the mining industry and flow-on effects to
other sectors. This was the main reason for the decline in its GST since 2007−08.
47
Western Australia had a net operating surplus in each of the last five years — an outcome
achieved by only two other States: Victoria and the Northern Territory. There was a big fall in
the surplus in 2008−09, but it recovered in 2009−10 and almost doubled in 2010−11. The
surplus fell by almost $1 billion in 2011−12. Despite the surpluses, the State’s high levels of
investment (driven in part by above average population growth), moved it from a net lending
position in 2007−08 to net borrowing positions in each subsequent year. This has steadily
reduced its holdings of net financial assets. The State became a debtor in 2010−11 and its net
debt increased further in 2011−12.
18
Table 10
Financial indicators, Western Australia
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
WA
%
Aust
%
Expense
16 712
18 882
21 075
22 066
24 571
10.1
7.4
Revenue
10 978
10 700
11 705
14 329
15 462
8.9
7.2
GST
3 984
3 594
3 550
3 236
3 511
-3.1
2.1
SPPs/NPPs
4 320
5 106
6 658
6 103
6 247
9.7
11.6
Net operating balance
2 570
518
838
1 602
649
Investment
1 239
1 316
1 901
1 879
2 227
15.8
15.3
Net lending
1 331
-798
-1 063
-277
-1 578
Net debt
-3 409
-2 618
-1 076
236
2 050
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Drivers of expenses
48
The average annual growth in Western Australian government expenses was above average.
A rapidly growing population (Table 11) fuelled this growth. It had the fastest population
growth of all the States over the years 2007−08 to 2011−12.
49
In recent budgets, the government boosted spending on health and support for economic
infrastructure projects. In 2011−12, it had the second highest growth in capital expenditure
of 25.6%, which was well above the average of 9.9%. Growth in public sector average weekly
earnings contributed to expense growth and may reflect wage pressure from a tight labour
market. Its 18.5% growth in investment in 2011−12 was the greatest of all States. The rapidly
growing investment has, most recently, been directed to new port developments, schools,
roads and regional development.
50
Table 11 shows the above average growth in total population extends to all population
sub-groups: the young, the aged, Indigenous, remote and city populations. Above average
growth in population has resulted in above average spending on justice, schools, health and
welfare.
19
Table 11
Demographic and expense indicators, Western Australia
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
WA
%
Aust
%
2 143 947
2 216 553
2 270 205
2 319 931
2 387 232
2.7
1.8
Population 5 to 14
284 148
287 833
289 949
294 561
294 561
1.2
0.5
Population 65 and above
257 144
265 970
275 083
285 221
285 221
3.5
3.2
81 438
83 913
85 951
88 276
88 276
2.7
1.2
1 385 138
1 423 271
1 448 728
1 479 143
1 479 143
2.2
1.7
140 527
146 008
150 913
156 326
156 326
3.6
1.5
Population
Indigenous population
Population in capital cities
Population in remote areas
Public sector AWE ($)
972
1 019
1 132
1 175
1 230
6.0
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
51
The State’s annual average growth in own-source revenue was above the average. While
Western Australia, along with the ACT, suffered a decline in own-source revenue in 2008−09,
it bounced back strongly in 2009−10 and continued improving to 2011−12. Western
Australia’s own-source revenue grew by 22.4% in 2010−11. The next highest growth of 10.8%
was in Queensland.
52
The State’s mining industry accounted for 49.0% of national production in 2007−08. Well
above average annual growth in Western Australia’s value of mining production since then
increased its share of national production to 58.8% in 2011−12. This produced strong job
growth across many sectors of the economy as indicated by above average growth in the
number of people employed and nearly twice the national annual average growth in
compensation of employees.
53
The onset of the global financial crisis in 2008−09 had a marked impact across its economy.
Median house prices, property sales and new vehicle sales fell in 2008−09 compared with
2007−08, negatively affecting the State’s revenue collections. All those activities rebounded
in 2009−10, but the value of property sales fell again in 2010−11. In 2011–12, Western
Australia and Queensland were the only States to record an increase in conveyances.
20
Table 12
Economic indicators, Western Australia
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
WA
%
Aust
%
154 840
176 143
181 566
221 574
238 870
11.4
5.8
61 277
68 146
71 023
80 753
91 894
10.7
5.4
1 163
1 175
1 205
1 241
1 296
2.8
1.4
Med'n house prices ($000)
480
425
505
500
482
0.1
1.4
Value of conveyances ($m)
48 134
36 481
43 738
34 687
38 862
-5.2
-4.7
Mining value of prod'n ($m)
56 035
67 869
69 848
98 623
117 135
20.2
14.9
Capital expenditure ($m)
59 090
65 413
66 706
70 799
88 895
10.7
5.0
Gross State Product ($m)
Comp'n of employees ($m)
Total employed persons ('000)
Sales of new vehicles ('000)
123
105
110
112
118
-1.0
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
SOUTH AUSTRALIA
54
Over the five years 2007−08 to 2011−12, the South Australian economy (measured by growth
in GSP) grew more slowly than the Australian average. It had the second slowest GSP growth
at 4.3%, with Tasmania having the slowest at 2.5%.
55
Budget developments over recent years in South Australia are shown in Table 13. It had
below average growth in State expenses and revenue. The average annual growth in State
government investment was well above average, due to the large increases in investment in
2008−09 and 2009−10. This reflected the State’s increased spending on transport, health and
education infrastructure, which was partly funded by Commonwealth stimulus measures.
That investment, together with the operating deficits in 2008−09, 2010−11 and 2011−12, has
turned the State into a net borrower.
Drivers of expenses
56
The average annual growth in the State’s expenses over the last five years was below
average, but annual spending on schools, health and welfare was above average.
57
Table 14 suggests the below average growth in expenses partly reflected below average
growth in State population. South Australia’s population growth has been consistently below
average since 2007−08. Its population in each major population sub-group also grew at below
average rates. South Australia’s population in the 5 to 14 age-group has been declining, while
its population aged 65 and over and its remote area and capital city populations grew at well
below average rates.
21
Table 13
Financial indicators, South Australia
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
SA
%
Aust
%
Expense
12 417
13 753
15 338
15 062
16 164
6.8
7.4
Revenue
6 401
6 440
6 847
6 980
7 597
4.4
7.2
GST
3 914
3 786
4 055
4 337
4 286
2.3
2.1
SPPs/NPPs
2 565
3 305
4 632
3 699
4 022
11.9
11.6
Net operating balance
462
-222
196
-46
-259
Investment
260
626
1 289
1 369
839
34.0
15.3
Net lending
202
-848
-1 093
-1 415
-1 098
Net debt
984
-192
678
2 251
4 165
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Table 14
Demographic and expense indicators, South Australia
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
SA
%
Aust
%
1 575 676
1 595 279
1 616 401
1 631 178
1 645 040
1.1
1.8
Population 5 to 14
193 236
192 583
191 929
191 762
191 762
-0.3
0.5
Population 65 and above
242 559
247 642
253 969
260 586
260 586
2.4
3.2
36 393
36 792
37 235
37 392
37 392
0.9
1.2
1 095 644
1 109 829
1 123 625
1 133 005
1 133 005
1.1
1.7
39 165
39 481
39 824
39 895
39 895
0.6
1.5
Population
Indigenous population
Population in capital cities
Population in remote areas
Public sector AWE ($)
997
1 040
1 093
1 112
1 178
4.3
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
58
The State’s growth in own-source revenue was well above average in 2007−08. However, it
fell well below average in 2008−09 and 2010−11, which contributed to the average annual
growth being below the national average. Table 15 shows some economic indicators for the
South Australian economy.
22
59
Activity in South Australia’s real estate market has been mixed, with above average annual
growth in median house prices and below average annual growth in the value of property
conveyances. House prices and overall market activity fell in 2008−09, but by less than the
national average. These indicators rebounded in 2009−10, but also by less than the average.
60
While South Australia has a comparatively small mining industry, the average annual growth
in its value of mining production was above average. Growth was well above the national rate
in 2009−10 and 2010−11. In 2010−11, it had the second highest rate of growth of all the
States, behind Western Australia, and has continued to grow in 2011−12.
Table 15
Economic indicators, South Australia
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
SA
%
Aust
%
Gross State Product ($m)
77 762
79 998
83 401
89 322
91 928
4.3
5.8
Comp'n of employees ($m)
37 696
38 823
39 557
41 614
44 324
4.1
5.4
Total employed persons ('000)
791
797
807
820
814
0.7
1.4
Med'n house prices ($000)
358
355
399
410
385
1.8
1.4
Value of conveyances ($m)
21 374
17 444
17 889
16 925
15 238
-8.1
-4.7
Mining value of prod'n ($m)
3 651
3 629
4 222
5 843
6 426
15.2
14.9
17 972
19 597
21 526
21 733
22 246
5.5
5.0
Capital expenditure ($m)
Sales of new vehicles ('000)
65
59
66
63
65
0.3
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
TASMANIA
61
Average annual growth in Tasmania’s GSP from 2007−08 to 2011−12 was the lowest in the
nation. Tasmania’s overall growth outcomes are largely driven by its very low population
growth. When viewed in per capita terms, Tasmania’s average annual growth in GSP since
2007−08 was still the lowest of all States. Tasmania was the only state to have a fall in GSP in
2011-12.
62
Table 16 shows Tasmania’s financial position over the last five years. It had below average
growth in State expenses and well below average growth in State revenue during that time.
Its receipts from SPPs and NPPs grew at an above average rate, which partly accounted for its
below average increase in GST revenue.
63
The net lending (saving) outcome in 2007−08 arose mostly because capital expenditure was
below depreciation provisions. A large increase in investment in 2009−10 (the highest
23
increase of all States at 1 376.2%) was financed through net borrowing and the small
operating surplus. Investment grew again in 2010−11, but it fell in 2011−12. Tasmania
maintained a net borrowing and net debt position in 2011−12.
Table 16
Financial indicators, Tasmania
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
Tas
%
Aust
%
Expense
3 948
4 364
4 584
4 790
4 876
5.4
7.4
Revenue
1 573
1 583
1 494
1 586
1 673
1.6
7.2
GST
1 665
1 595
1 630
1 688
1 678
0.2
2.1
748
1 109
1 478
1 494
1 339
15.7
11.6
38
-78
18
-22
-186
Investment
-50
21
310
421
76
..
15.3
Net lending
88
-99
-292
-443
-262
SPPs/NPPs
Net operating balance
Net debt
-1 031
-982
-748
-416
-409
Note:
.. signifies an average annual rate of growth could not be calculated.
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Drivers of expenses
64
Table 17 shows the average annual growth rates for Tasmania for a number of demographic
indicators and public sector average weekly earnings. Between 2007−08 and 2011−12,
Tasmania had the slowest population growth of any State. Its population in each major
population sub-group also grew at below average rates. Its population aged 5 to 14 years,
Indigenous population, population living in capital cities and population living in remote areas
fell, more so than in any other State.
65
Other things being equal, the below average growth in government expenses in Tasmania
would, in part, reflect its below average rates of population growth.
24
Table 17
Demographic and expense indicators, Tasmania
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
Tas
%
Aust
%
496 185
501 585
505 936
509 606
511 718
0.8
1.8
Population 5 to 14
64 979
64 439
63 836
63 616
63 616
-0.7
0.5
Population 65 and above
74 964
77 149
79 448
82 050
82 050
3.1
3.2
Indigenous population
24 068
24 165
24 204
24 155
24 155
0.1
1.2
163 444
164 701
166 184
167 248
167 248
0.8
1.7
2 695
2 653
2 628
2 581
2 581
-1.4
1.5
Population
Population in capital cities
Population in remote areas
Public sector AWE ($)
940
979
1 038
1 065
1 103
4.1
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
66
Tasmania’s relatively small industrial base, high proportion of small businesses, lower wages,
lower property values and very low share of mining activity mean it is less able to raise
revenue from payroll tax, land tax, stamp duty, mining revenue and insurance tax.
67
Tasmania experienced below average growth in many of the economic indicators in Table 18,
including compensation of employees, the number of people employed, the value of
conveyances and sales of new vehicles. It was the only State where the average movement in
total employed persons was negative. Tasmania had above average annual growth in median
house prices in 2008−09 and in 2011−12, which contributed to its above average annual
growth in this area. Its annual average growth in new vehicle sales was below average, largely
due to well below average sales in 2011−12. Tasmania was the lowest of all States in this area
in 2011−12 and the only State to experience a fall.
68
While Tasmania has a very low share of mining activity, its annual average value of mining
production has grown more than the national average since 2007−08. This is largely due to
significantly above average growth in 2011−12, higher than any other State.
25
Table 18
Economic indicators, Tasmania
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
Tas
%
Aust
%
Gross State Product ($m)
21 913
22 095
23 490
24 218
24 175
2.5
5.8
Comp'n of employees ($m)
10 921
11 288
11 856
11 981
12 088
2.6
5.4
Total employed persons ('000)
238
235
237
237
232
-0.6
1.4
Med'n house prices ($000)
310
300
350
345
340
2.3
1.4
Value of conveyances ($m)
6 359
4 595
5 195
4 589
4 014
-10.9
-4.7
581
670
536
621
1 374
24.0
14.9
5 624
6 189
5 956
6 248
6 241
2.6
5.0
Mining value of prod'n ($m)
Capital expenditure ($m)
Sales of new vehicles ('000)
20
18
19
18
16
-5.2
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
THE AUSTRALIAN CAPITAL TERRITORY
69
The average annual growth in the ACT’s GSP over the years 2007−08 to 2011−12 was above
the national average and second to Western Australia. The annual growth in the ACT’s GSP
exceeded the average in each of those years except 2010−11. It also had above average
outcomes for almost every other economic indicator.
70
Table 19 shows how the ACT’s budget has performed over recent years. It achieved operating
surpluses in each year, except 2008−09. Like all other States, the ACT was a net borrower in
2011−12. The ACT’s borrowing has increased since 2008−09 concurrent with increases to its
investment. However, the ACT, along with Queensland and Tasmania, has maintained a
negative net debt position every year from 2007−08 to 2011−12 — that is, it has net holdings
of cash and financial investments.
26
Table 19
Financial indicators, Australian Capital Territory
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
ACT
%
Aust
%
Expense
3 115
3 388
3 730
3 853
4 076
7.0
7.4
Revenue
2 072
1 890
2 119
2 301
2 514
4.9
7.2
GST
846
835
896
853
849
0.1
2.1
SPPs/NPPs
447
595
800
727
755
14.0
11.6
Net operating balance
251
-68
85
28
42
Investment
107
86
287
339
379
37.2
15.3
Net lending
144
-154
-202
-311
-337
Net debt
-2 957
-2 804
-2 962
-2 987
-1 617
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Drivers of expenses
71
The average annual growth in ACT Government expenses between 2007−08 and 2011−12
was below the national average, mainly due to slower economic growth in the last 2 years
and despite above average population growth.
72
Table 20 shows the average annual growth rate for the ACT’s total population was slightly
above the average, and for the 5 to 14 year old sub-group was about the average. Its
population was ageing faster than the nation as a whole. The growth of its Indigenous
population was also above average.
73
The table also shows that the growth in public sector average weekly earnings in the ACT was
above the national average, although the available data do not enable us to determine
whether this higher growth was caused by Commonwealth or ACT government employees.
27
Table 20
Demographic and expense indicators, Australian Capital Territory
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
ACT
%
Aust
%
344 448
350 951
357 286
364 318
370 729
1.9
1.8
Population 5 to 14
41 856
41 883
41 829
42 428
42 428
0.5
0.5
Population 65 and above
34 391
35 607
37 041
38 683
38 683
4.0
3.2
5 723
5 842
5 995
6 162
6 162
2.5
1.2
342 746
348 266
352 965
356 851
356 851
1.4
1.7
0
0
0
0
0
..
1.5
Population
Indigenous population
Population in capital cities
Population in remote areas
Public sector AWE ($)
1 293
1 359
1 463
1 479
1 538
4.4
4.1
Note:
.. signifies an average annual rate of growth could not be calculated.
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
74
The average annual growth in the ACT’s own-source revenue was below the national average
between 2007−08 and 2011−12. This is largely because the ACT has no mining industry.
75
Compensation of employees grew faster than the national average. Motor vehicle sales were
on average constant, which was better than the national average fall.
76
The ACT’s real estate market performed strongly compared to other States on average over
the past five years. Despite an above average fall in 2011–12, the ACT’s annual average
growth in property transfers was the highest of all States, due to its above average growth
from 2007−08 to 2010−11. A below average fall in the total value of property transfers in
2008−09 was followed by a much stronger than average recovery in 2009−10 and a below
average fall in 2010−11. The ACT had the second highest average growth in median house
prices of all States since 2007−08.
28
Table 21
Economic indicators, Australian Capital Territory
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
ACT
%
Aust
%
Gross State Product ($m)
24 337
26 078
28 582
30 455
32 197
7.2
5.8
Comp'n of employees ($m)
15 064
16 585
18 104
19 528
20 867
8.5
5.4
Total employed persons ('000)
198
196
203
204
209
1.3
1.4
Med'n house prices ($000)
468
450
509
535
530
3.2
1.4
Value of conveyances ($m)
5 759
4 808
6 684
6 494
5 657
-0.4
-4.7
0
0
0
0
0
..
14.9
6 513
6 718
7 519
8 099
8 614
7.2
5.0
Mining value of prod'n ($m)
Capital expenditure ($m)
Sales of new vehicles ('000)
17
15
16
16
17
0.0
-0.2
Note:
.. signifies an average annual rate of growth could not be calculated.
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
THE NORTHERN TERRITORY
77
The Northern Territory’s average annual economic growth (as measured by growth in GSP)
was below the national average between 2007−08 and 2011−12. It was one of the three
fastest growing States in 2007−08 and 2008−09, but it was one of only two States whose GSP
declined in 2009−10. That decline mainly reflected a fall in construction activity after several
major mining related projects were completed. Growth remained below average until
2011−12, when it was second only to Western Australia.
78
Table 22 shows that the Territory achieved a net operating surplus in each of the last five
years — an outcome achieved only by it, Victoria and Western Australia. It recorded its
highest surplus for the five years in 2009−10, due to the increase in GST and other
Commonwealth payments. The Territory has been a net borrower since 2008−09 due to large
increases in investment. Its level of debt increased substantially in 2010−11 and its net debt
per person of $7 028 as at 30 June 2012 was the highest of all States. The next highest was
Victoria with $2 733 per person.
29
Table 22
Financial indicators, Northern Territory
Average annual
rate of growth
2007-08
$m
2008-09
$m
2009-10
$m
2010-11
$m
2011-12
$m
NT
%
Aust
%
Expense
3 527
3 997
4 111
4 527
4 733
7.6
7.4
Revenue
892
953
934
935
922
0.8
7.2
2 207
2 248
2 380
2 385
2 552
3.7
2.1
SPPs/NPPs
770
987
1 338
1 402
1 434
16.8
11.6
Net operating balance
342
190
541
195
176
Investment
143
212
582
745
688
48.1
15.3
Net lending
199
-22
-41
-550
-513
GST
Net debt
887
837
719
1 172
1 633
Source: ABS Government Finance Statistics for 2007–08 to 2010–11; State provided data for 2011–12.
Drivers of expenses
79
Between 2007−08 and 2011−12, the average annual growth in Northern Territory
government expenses was above the national average. Its annual growth in 2007−08,
2008−09 and 2010-11 was the highest of all States, but was the lowest in 2009−10.
80
The increase in the Territory’s operating expenses was partly driven by the increased
Commonwealth funding for education, community health, welfare and housing, Indigenous
community development and justice services.
81
The Territory’s annual growth in investment has exceeded the national average in each year
since 2007−08. Funding received under the Commonwealth’s economic stimulus measures,
the Northern Territory Emergency Response, Closing the Gap and Remote Indigenous
housing programs contributed to the large increase in the Territory’s infrastructure
investment, especially on housing and roads.
82
Table 23 shows the average annual growth rates for the Northern Territory’s population. The
growth in its 65 year old and above population was above the national average and its
population in capital cities grew at about the average rate. Its 65 years and above population
recorded the highest average annual growth of all States. These indicators implied extra
pressure on Territory spending. However, overall, the Northern Territory’s population grew
more slowly than the national average, in particular, its Indigenous population, population in
remote areas and population aged 5 to 14. Its population aged 5 to 14 declined, as did that of
South Australia and Tasmania.
30
Table 23
Demographic and expense indicators, Northern Territory
Average annual
rate of growth
2007-08
No.
2008-09
No.
2009-10
No.
2010-11
No.
2011-12
No.
NT
%
Aust
%
218 435
223 867
228 692
230 593
232 365
1.6
1.8
Population 5 to 14
34 140
34 212
33 975
33 882
33 882
-0.3
0.5
Population 65 and above
10 908
11 486
12 145
12 813
12 813
5.5
3.2
Indigenous population
66 749
67 952
68 603
68 902
68 902
1.1
1.2
Population in capital cities
102 271
105 532
107 566
107 702
107 702
1.7
1.7
Population in remote areas
85 248
86 732
87 386
87 398
87 398
0.8
1.5
Population
Public sector AWE ($)
1 138
1 134
1 164
1 333
1 343
4.2
4.1
Note:
Total State population is Estimated Resident Population (ERP) as at 31 December, in the middle of
each financial year. Disaggregated State population data are based on disaggregated ERP as at
30 June, the end of each financial year. Average growth rates cover only the years for which data
are available. Data from the penultimate year is used for population 5 to 14 through to population
in remote areas for 2011−12.
Source: ABS, Population by Age and Sex, Australian States and Territories, Cat No 3201.0, Jun 2010; ABS,
Experimental Estimates and Projections, Aboriginal and Torres Strait Islander Australians, Cat No
3238.0, Sep 2010; and ABS, Average Weekly Earnings, Cat No 6302.0, Aug 2011.
Drivers of revenues
83
Between 2007−08 and 2011−12, the average annual growth in the Northern Territory’s
own-source revenue was well below the national average and the lowest of all the States. It
was the only State whose own-source revenue fell in 2011−12.
84
The Northern Territory has the second highest value of mining production per person, after
Western Australia. However, its value of production fell in 2009−10. The Northern Territory’s
mining industry recovered well in 2010−11 and it had the second highest growth of all States
in 2011−12.
85
The Northern Territory’s real estate market strengthened from 2007−08 to 2011−12. It was
the only State where the median house prices grew every year between 2007−08 and
2010−11 — every other State experienced a decline in 2008−09. The growth in the value of
property transfers was below average in 2007−08, 2009−10 and 2010−11, which contributed
to the fall in total own-source revenue.
86
Commonwealth support received by the Northern Territory in the form of GST revenue, SPPs
and NPPs represents about 81.2% of its total revenue (well above the national average of
46.6%). This revenue grew at an above average rate due to the Territory’s declining relative
fiscal capacity as measured by the commission, and its relatively large share of SPPs relating
to Indigenous people.
31
Table 24
Economic indicators, Northern Territory
Average annual
rate of growth
2007-08
2008-09
2009-10
2010-11
2011-12
NT
%
Aust
%
15 095
16 625
16 280
17 322
18 583
5.3
5.8
6 280
6 729
7 333
7 558
8 116
6.6
5.4
Total employed persons ('000)
114
121
121
119
124
2.1
1.4
Med'n house prices ($000)
419
445
520
545
505
4.8
1.4
Value of conveyances ($m)
2 737
3 019
2 943
2 344
2 323
-4.0
-4.7
Mining value of prod'n ($m)
4 136
4 709
3 438
4 209
6 223
10.8
14.9
Capital expenditure ($m)
5 311
6 717
5 584
5 057
7 753
9.9
5.0
Gross State Product ($m)
Comp'n of employees ($m)
Sales of new vehicles ('000)
10
9
10
10
11
1.0
-0.2
Source: ABS, National Accounts, State Accounts 2011−12, Cat No 5220.0; ABS, Labour Force, Australia, Cat
No 6202.0, Dec 2012; ABS, House Price Indexes, Cat No 6416.0, Sep 2012; Conveyance data were
provided by States; Mining data from ABS, Australian Industry, 2010−11, Cat No 8155.0, 2011−12,
except data for 2011−12 were provided by States; ABS, Sales of New Motor Vehicles, Australia, Cat
No 9314.0, Dec 2012.
SUMMARY
87
The following three tables summarise the State and Australian average annual growth rates
for the financial, demographic and economic indicators discussed in the preceding sections.
32
Table 25
Average annual rate of growth in State budget indicators, 2007−08 to 2011−12
NSW
Vic
Qld
WA
SA
Tas
ACT
NT
Average
%
%
%
%
%
%
%
%
%
Expense
6.1
7.2
8.7
10.1
6.8
5.4
7.0
7.6
7.4
Revenue
5.3
5.9
12.4
8.9
4.4
1.6
4.9
0.8
7.2
GST
4.5
2.8
0.1
-3.1
2.3
0.2
0.1
3.7
2.1
10.0
11.5
14.1
9.7
11.9
15.7
14.0
16.8
11.6
Investment
8.8
23.0 10.5 15.8
34.0
..
Note:
.. signifies an average annual rate of growth could not be calculated.
Source: Commission calculation.
37.2
48.1
15.3
SPPs/NPPs
Table 26
Average annual rate of growth in State demographic and expense indicators,
2007−08 to 2011−12
NSW
Vic
Qld
WA
SA
Tas
ACT
NT
Average
%
%
%
%
%
%
%
%
%
Population
1.4
1.8
2.2
2.7
1.1
0.8
1.9
1.6
1.8
Population 5 to 14
0.3
0.5
1.2
1.2
-0.3
-0.7
0.5
-0.3
0.5
Population 65 and above
3.1
3.0
4.0
3.5
2.4
3.1
4.0
5.5
3.2
Indigenous population
0.5
0.8
1.4
2.7
0.9
0.1
2.5
1.1
1.2
Population in capital cities
1.6
1.7
2.0
2.2
1.1
0.8
1.4
1.7
1.7
Population in remote areas
-0.7
-0.8
1.2
3.6
0.6
-1.4
..
0.8
1.5
Public sector AWE
3.2
4.7
3.7
6.0
4.3
4.1
4.4
4.2
Note:
.. signifies an average annual rate of growth could not be calculated. Annual growth rates for
disaggregated population groups cover 2007−08 to 2010−11 only.
Source: Commission calculation.
Table 27
4.1
Average annual rate of growth in State economic indicators, 2007−08 to
2011‐12
NSW
Vic
Qld
WA
SA
Tas
ACT
NT
Average
%
%
%
%
%
%
%
%
%
Gross State Product
5.0
4.5
5.3
11.4
4.3
2.5
7.2
5.3
5.8
Comp'n of employees
4.2
4.6
5.2
10.7
4.1
2.6
8.5
6.6
5.4
Total employed persons
1.1
1.8
1.2
2.8
0.7
-0.6
1.3
2.1
1.4
Med'n house prices
-0.6
4.4
1.0
0.1
1.8
2.3
3.2
4.8
1.4
Value of conveyances
-0.5
-1.2
-12.5
-5.2
-8.1
-10.9
-0.4
-4.0
-4.7
Mining value of prod'n
11.9
1.9
7.4
20.2
15.2
24.0
..
10.8
14.9
2.2
3.1
4.6
10.7
5.5
2.6
7.2
9.9
5.0
Sales of new vehicles
0.4
0.3
-1.0
-1.0
0.3
-5.2
Note:
.. signifies an average annual rate of growth could not be calculated.
Source: Commission calculation.
0.0
1.0
-0.2
Capital expenditure
33