The state budget is projecting continued rapid growth in mining royalties and property revenue in 2006-07.
The state budget is projecting continued rapid growth in mining royalties and property revenue in 2006-07.
Total tax revenue is expected to increased by 18.2 per cent in 2005-06 and is projected to decline by 0.3 per cent in 2006-07.
The decline largely reflects previously announced tax cuts and the distorting effect of a large one-off stamp duty assessments in 2005-06.
The latter is believed to include a $160 million stamp duty assessment relating to Alcoa's sale of the Worseley Alumina refinery, which is being contested.
Adjusting for these factors, revenue is expected to rise by 5.5 per cent in 2006-07.
Mining royalties grew by about 50 per cent in 2005-06 to $1.27 billion and are projected to increase by another 14 per cent in 2006-07 to $1.50 billion.
The biggest contributor to both increases was the iron ore sector, which has experienced higher prices and larger production volumes and is projected to pay $1.0 billion in royalties in 2006-07.
The gold sector is also making a bigger contribution, with royalties projected to reach $125 million.
The revenue projections have also been substantially affected by Treasury's decision to assume a sharply higher oil price of US$67.90, based on current futures market prices.
It had previously assumed an oil price of US$45 in 2006-07 and US$40 in future years.
Payroll tax is expected to grow by 5.7 per cent to $1.43 billion, about half the growth rate in the current year.
This largely reflects the impact of slower employment growth (two per cent) partly offset by 5.25 per cent growth in average weekly earrnings.
The booming property market has underpinned an expected 29 per cent increase in revenue from property and financial institutions taxes to $2.4 billion.
Adjusting for tax cuts and one-off conveyance duty assessments, this revenue is projected to grow by six per cent in 2006-07.
Treasury was previously assuming a downturn in property market activity but now expects 10 per cent growth in housing prices and a five per cent decline in dwelling sales volumes.
